The Nigeria Customs Service (NCS) has announced the suspension of the implementation of a 4% Free-on-Board (FOB) charge on imports, as outlined in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023.
This decision, contained in a statement issued and signed by the Assistant Comptroller of Customs National Public Relations Officer, Abdullahi Maiwada, followed extensive consultations with the Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, along with other key stakeholders.
According to a statement released by the NCS, the suspension is intended to allow for broader engagement with stakeholders regarding the framework for implementing the new charge.
The timing of this decision coincides with the termination of the contract agreements with service providers, including Webb Fontaine, which were previously funded through the 1% Comprehensive Import Supervision Scheme (CISS).
According to the statement, this development provides an opportunity for a holistic review of the NCS revenue structure.
Before the introduction of the NCSA 2023, customs operations were funded through separate allocations—1% from CISS and a 7% cost of collection.
However, this arrangement resulted in inefficiencies and funding shortfalls for modernisation efforts. The new Act consolidates funding by allocating “not less than 4% of the Free-on-Board value of imports” to ensure sustainable financial support for critical customs operations and modernisation initiatives.
Furthermore, the Act grants the NCS the authority to modernise its operations through various technological advancements. Section 28 of the NCSA 2023 mandates the development and maintenance of electronic systems for seamless information exchange between the NCS, other government agencies, and traders. As part of these efforts, the service has already introduced the B’Odogwu clearance system, which has improved clearance times and enhanced transparency.
Additionally, other digital solutions backed by the Act include the implementation of a Single Window system (Section 33), risk management systems (Section 32), non-intrusive inspection equipment (Section 59), and electronic data exchange facilities (Section 33(3)).
While the suspension remains in effect, the NCS has assured stakeholders that the implementation of the 4% FOB charge will be reviewed in line with ongoing consultations. The service also reaffirmed its commitment to executing the provisions of the NCSA 2023 in a way that balances revenue generation with trade facilitation.
“The NCS remains dedicated to implementing this Act in a manner that best serves our stakeholders while fulfilling our revenue generation and trade facilitation mandate. We will communicate a revised implementation timeline once stakeholder consultations are concluded,” the statement read.
The statement partly read: “Under the previous funding arrangement repealed by the NCSA 2023, separating the 1% CISS and 7% cost of collection created operational inefficiencies and funding gaps in customs modernisation efforts. The new Act addresses these challenges by consolidating “not less than 4% of the Free-on-Board value of imports,” designed to ensure sustainable funding for critical customs operations and modernisation initiatives. This transition period will allow the Service to optimise the management of these frameworks to serve our stakeholders and the nation’s interests better.”
“The Act further empowers the Service to modernise its operations through various technological innovations. Specifically, Section 28 of the NCSA 2023 authorises developing and maintaining electronic systems for information exchange between the Service, Other Government Agencies, and traders. The Service is already implementing several digital solutions, including the recently deployed B’Odogwu clearance system, which stakeholders are benefiting from through faster clearance times and improved transparency. Other innovative solutions authorised by the Act include; Single Window implementation (Section 33), Risk management systems (Section 32), Non-intrusive inspection equipment (Section 59) and Electronic dataexchange facilities (Section 33(3)).”
