The Nigeria Employers’ Consultative Association (NECA) has raised alarm over the newly introduced four per cent Free On-Board (FOB) valuation charge on imports, warning that it could cripple businesses and worsen economic hardship for Nigerians.
NECA’s Director-General, Adewale Oyerinde, in a statement on Sunday, stressed that the levy, which is projected to add N2.84 trillion in costs to businesses, could destabilize industries dependent on imported raw materials, push inflation higher, and exacerbate the already struggling economy.
“With Nigeria’s annual imports estimated at N71tn, the newly introduced levy will impose an additional N2.84tn in costs. For industries that rely on imported raw materials, this charge will drive duty payments up by 80 per cent, significantly inflating production cost and eroding competitiveness.
“The ripple effects will be severe higher inflation, deeper poverty, and a weakened investment climate,” Oyerinde stated.
Beyond its financial burden, NECA warned that the policy contradicts the government’s stated commitment to economic reforms and investment-friendly policies. Oyerinde noted that at a time when businesses are grappling with multiple taxation and economic volatility, imposing additional levies could lead to more company closures and job losses.
“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 strangulate them,” he remarked.
NECA further criticized the Nigeria Customs Service (NCS) for prioritizing revenue collection over trade facilitation, arguing that the charge contradicts Nigeria’s Ease of Doing Business agenda. The association described the move as a desperate attempt to meet the NCS’s N10 trillion revenue target for 2025, warning that the unintended consequences would be severe.
“This approach is counterproductive and directly contradicts the Government’s Ease of Doing Business agenda. With a revenue target of N10tn set for the NCS 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,” Oyerinde said.
NECA called for the immediate suspension of the levy and urged the government to engage stakeholders in finding more sustainable ways to improve revenue without stifling economic growth.
“Government must take urgent steps to ease the financial burden on businesses and citizens, rather than implementing policies that will worsen economic hardship,” Oyerinde concluded.
