The Manufacturers Association of Nigeria (MAN) has expressed strong opposition to the introduction of a 4% Free-on-Board Levy by the Nigeria Customs Service (NCS), citing its potential to exacerbate the already high cost of doing business in Nigeria.
In a statement, MAN Director General Segun Ajayi-Kadir emphasized that the levy’s implementation would have far-reaching consequences, including increased production costs, reduced competitiveness, and higher unemployment rates.
He noted that the levy contradicts the government’s economic reform agenda, which aims to streamline fiscal policies and create a business-friendly tax regime.
MAN listed several reasons for its opposition to the levy, including:
1. Escalating production costs: The levy will increase the cost of imported raw materials, which has already risen by 118% from ₦2.07 trillion in 2023 to ₦4.53 trillion in 2024.
2. Disrupting supply chains*: The levy will cause heavy disruptions in supply chains, trigger raw material stock-outs, and inflict higher demurrage costs.
3. Exacerbating inflation: The levy will worsen the already high inflation rate of 34.8%, affecting the disposable income of Nigerians.
4. Undermining government revenue: The levy will incentivize smuggling, trade diversion, and under-declaration of duty, ultimately undermining government revenue.
MAN urged the Federal Government to direct the NCS to halt the implementation of the levy and instead engage with stakeholders to align with the government’s economic reform agenda.
