Abuja, Nigeria – The Federal Government has suspended the implementation of the 4% Free-on-Board (FOB) charge on imports, as outlined in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023.
The Nigeria Customs Service (NCS) announced the suspension in a statement issued on Tuesday by its National Public Relations Officer, Assistant Comptroller Abdullahi Maiwada. The decision follows extensive consultations with the Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, along with other key stakeholders.
Reason for the Suspension
According to the NCS, the suspension will allow for further engagement with relevant stakeholders to refine the implementation framework of the Act. The timing also coincides with the expiration of contract agreements with service providers such as Webb Fontaine, who were previously funded through the 1% Comprehensive Import Supervision Scheme (CISS).
The new funding structure under the NCSA 2023 seeks to address inefficiencies and financial gaps by consolidating revenue sources, replacing the previous separation of the 1% CISS and the 7% cost of collection. Under the Act, the NCS is entitled to “not less than 4% of the Free-on-Board value of imports,” which is expected to create a more sustainable funding mechanism for customs operations and modernization efforts.
During the suspension period, the NCS will focus on optimizing the management of the new revenue framework to ensure alignment with national economic interests and trade facilitation goals.
Customs Modernization and Technological Advancements
The NCSA 2023 grants the NCS the authority to drive modernization through technological innovations aimed at improving efficiency and trade facilitation. Section 28 of the Act mandates the development of electronic systems for seamless information exchange between customs, government agencies, and traders.
As part of its digital transformation strategy, the NCS has already implemented several initiatives, including the B’Odogwu clearance system, which has enhanced transparency and reduced clearance times.
Other key modernization efforts under the Act include:
- Single Window Implementation (Section 33): A centralized digital platform to streamline trade processes and reduce bureaucratic delays.
- Risk Management Systems (Section 32): Use of artificial intelligence and data analytics for better risk profiling and security at entry points.
- Non-Intrusive Inspection Equipment (Section 59): Deployment of scanning technology to expedite cargo clearance and minimize physical inspections.
- Electronic Data Exchange Facilities (Section 33(3)): Enhancing interoperability and real-time data sharing among trade stakeholders.
These reforms are expected to strengthen Nigeria’s trade competitiveness, improve customs efficiency, and bolster anti-smuggling measures.
For now, stakeholders await further discussions on the implementation of the FOB charge as the government refines its approach to trade facilitation and revenue generation.
Join our Channel...