The Manufacturers Association of Nigeria (MAN) has expressed concerns over the proposed 15 percent increase in port-related charges by the Nigerian Ports Authority (NPA).
This is even as the Nigeria Employers’ Consultative Association, NECA, has rejected the recent introduction of the 4 percent Customs Administration Charge on Free on Board (FOB) value by the Nigeria Customs Service (NCS) as contained in the Nigeria Customs Service Act, 2023.
The Director General of MAN, Mr Segun Ajayi-Kadir, in a statement on Sunday in Lagos, noted that the manufacturing sector was already beguiled by many challenges.
Recall that the NPA on Thursday, disclosed its decision to begin review of its tariff across rates and dues to ensure it met current demands in port operations.
The authority cited infrastructural development and all round competitiveness as reasons for the review which was its first since 1993
However, the MAN director general stated that the timing was inimical, particularly as businesses struggled with the rising cost of operations, high rate of foreign exchange among general economic uncertainties.
Ajayi-Kadir added that Nigeria’s current economic climate is characterised by rising inflation, foreign exchange challenges, and declining industrial capacity utilisation.
He noted that ports as the gateway to international trade, played a crucial role in the efficiency and cost-effectiveness of business operations.
“According to the United Nations Conference on Trade and Development (UNCTAD), 80 percent of Nigeria’s traded goods are transported by sea, with 70 per cent of total imports and exports in West and Central Africa destined for Nigeria.
“This underscores the critical role Nigerian ports play in facilitating trade and industrial productivity. For manufacturers, port-related charges constitute significant indirect costs, as most raw materials and industrial machinery are imported through these ports.
“Any increase in charges will have a ripple effect, leading to higher production costs, increased inflationary pressures, and reduced competitiveness of locally manufactured goods.”
The MAN director general stated that many businesses are experiencing a worrying downturn due to unsustainable operating costs.
He said that increasing port tariffs was ill-timed and could signal a departure from the government’s avowed efforts and commitment to the ease of doing business.
According to him, it is inevitable that this additional strain on industrial activities will ultimately lead to reduced capacity utilisation and possibly job losses.
“Furthermore, Nigeria must remain competitive in regional trade. Neighbouring countries with more efficient and cost-effective ports will become far more attractive alternatives, leading to increased cargo diversion. This will not only reduce revenue for the Nigerian government but will encourage smuggling and other untoward trade practices that weaken our economy,” he said.
Ajayi-Kadir said that alternative approaches to port revenue generation such as reducing turnaround time for vessels, improving cargo clearing processes, tackling bottlenecks and infrastructural development were critical.
“While we acknowledge the need for revenue generation, increasing port tariffs can be counterproductive in the long run. MAN implores the NPA to shelve the proposed 15 per cent tariff increase and instead, collaborate with stakeholders to explore sustainable alternatives for revenue generation,” he stated
Also, the Nigeria Employers’ Consultative Association, NECA, has rejected the recent introduction of the 4 percent Customs Administration Charge on Free on Board (FOB) value by the Nigeria Customs Service (NCS) as contained in the Nigeria Customs Service Act, 2023.
According to NECA, the timing is not only insensitive, but will further worsen the economic situation of Nigerians, lamenting that “the Nigerian business environment is already burdened with multiple taxes, unpredictable policies, and economic challenges.”
The umbrella body for employers and voice of businesses in Nigeria, contended that “while revenue generation remains a priority for the Government, imposing this levy amid prevailing economic hardships is ill-timed and detrimental to businesses and Nigerians.”
Speaking through its Director-General, Adewale-Smatt Oyerinde, NECA said, “The Nigerian business environment is already burdened with multiple taxes, unpredictable policies, and economic challenges. With rising unsold inventories and growing unemployment, policies should support businesses and not further strangulate them.
“This additional financial import-dependent business will escalate production costs, fuel inflation, and threaten jobs. Ultimately, consumers will suffer from higher prices, worsening an already challenging economic climate.”
The body criticised NCS for prioritising revenue generation over its core mandate of trade facilitation and economic development, noting that “This approach is counterproductive and directly contradicts the Government’s Ease of Doing Business agenda.
“With a revenue target of N10 trillion set for the Nigeria Customs Service in the 2025 Budget by the National Assembly, this levy appears to be a desperate attempt to meet revenue projections at the expense of businesses and ordinary Nigerians.
“While the Government may achieve its revenue goals, the unintended consequences will be severe—higher costs of goods, business closures, rising unemployment, and worsening economic hardship for millions of citizens.
“The new charge contradicts ongoing tax reform efforts led by the Presidential Fiscal Policy and Tax Reforms Committee, chaired by Taiwo Oyedele, which aims to harmonise taxes and support business sustainability. At a time when businesses are calling for a streamlined tax system, this levy undermines reform efforts and sends a negative signal to investors.
“With Nigeria’s annual imports estimated at N71 trillion, the newly introduced levy will impose an additional N2.84 trillion in costs. For industries that rely on imported raw materials, this charge will drive duty payments up by 80 percent, significantly inflating production cost and eroding competitiveness. The ripple effects will be severe—higher inflation, deeper poverty, and a weakened investment climate.
“NECA, therefore, calls for an immediate reversal of this levy and urges the government to engage with stakeholders to develop a more sustainable and business-friendly approach to revenue generation. Government must take urgent steps to ease the financial burden on businesses and citizens, rather than implementing policies that will worsen economic hardship and stifle business growth.”
Meanwhile, Nigeria’s former senate president, Bukola Saraki has called on the federal government to reconsider plans to implement the 4 percent free-on-board (FOB) levy initiated by the Nigeria Customs Service (NCS).
Saraki, in a post on X, formerly Twitter, over the weekend criticised the development, stressing that it would add to the burden of many Nigerians who are already reeling from a cost-of-living crisis.
The former senate leader also knocked the NCS for its rising operational costs which he estimated at “over $1.5 billion annually” in a country where 129 million are living below the poverty line amid harsh economic conditions.
“Importers will inevitably pass these costs on to consumers, further straining the budgets of millions of struggling households,” Saraki said.
“This new fee of 4% is not even restricted to luxury goods but across all imports, so even for industries that import their raw materials whose duties are only 5%, the customs agency will now charge importers an extra 80% of the duty amount as administrative fees,” he added.
Saraki noted that with Nigeria’s annual imports estimated at N71 trillion, the new 4 percent customs administration charge on FOB value will come to N2.84 trillion.
“Does this mean that the Customs Service requires an additional N2.84 trillion annually to do its job?” he questioned, adding that the agency already has a budget and gets an incentive percentage on total customs duties collected.
The NCS had on February 5 stated that it would begin to implement the new 4 percent FOB levy on value imports, noting that its actions are in line with the provisions of the Nigeria Customs Service Act (NCSA) 2023.
But the former Senate president is worried that the policy may stoke prices and dampen the government’s efforts in making Nigeria top investment destination in the world by improving its ease of doing business index.
“How can this make sense or support the government’s policy of promoting the ease of doing business?”
