NECA, MAN reject new Customs, NPA port charges hike

NECA, MAN reject new Customs levy, NPA port charges

 

The introduction of a fresh four per cent administrative charge on Free-on-Board (FOB) value of imports by the Nigeria Customs Service (NCS) as well as the proposed 15 per cent increase in port charges by the Nigerian Ports Authority (NPA) have drawn the anger of employers of labour and manufacturers among other critical stakeholders.

They kicked against the new charges, warning that the move to raise government revenue target would have dire consequences on operations cost, employment capacity and prices of goods and services passed by the final consumers.

Last week, the NCS in a statement,  said the directive to implement the four per cent charge  was in line with the provisions of the Nigeria Customs Service Act (NCSA) 2023.

It explained that the FOB charge, which is calculated based on the value of imported goods, including the cost of goods and transportation expenses incurred up to the port of loading, is essential for driving the effective operation of the service.

It urged all stakeholders to comply with the directive, which it said was conceived after extensive consultation with relevant stakeholders.

But the Nigeria Employers’ Consultative Association (NECA), Manufacturers Association of Nigeria (MAN) have come out to criticise the new policies, which they noted as  ill-timed and therefore called for a halt to their implementation.

For instance, NECA described the introduction of the four per cent levy by the NCS as a desperate attempt to meet its N10 trillion revenue target contained in the 2025 proposed national budget.

It said the new charges would squeeze N2.84 trillion from private businesses and increase duty paid by industries by 80 per cent.

MAN, on its part, urged the NPA to shelve the proposed 15 per cent increase in port charges, noting that it was ill-advised and signalled a departure from the Federal Government’s commitment to improving the country’s ease of doing business.

Director General of NECA, Mr. Adewale-Smatt Oyerinde, said in a statement that the new charges contradicted the ongoing tax reform efforts led by the Presidential Fiscal Policy and Tax Reforms Committee, chaired by Mr. Taiwo Oyedele,  aimed at harmonising taxes and supporting business sustainability.

Oyerinde said, “With a revenue target of N10 trillion 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.”

The NECA leader also criticised the NCS for prioritising revenue generation over its core mandate of trade facilitation and economic development. According to him, this approach is counterproductive and directly contradicts the government’s ‘Ease of Doing Business’ agenda.

NECA called for an immediate reversal of the levy and urged 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,” NECA said.

In his reaction to the NPA’s proposed increase of port charges by 15 per cent, Director General of MAN, Mr. Segun Ajayi-Kadir, in a statement kicked against the hike.

He said, “Nigeria’s current economic climate is characterised by rising inflation, foreign exchange challenges, and declining industrial capacity utilisation.

“Many businesses are experiencing a worrying downturn due to unsustainable operating costs. Increasing port tariffs is therefore ill-timed and could signal a departure from the government’s avowed efforts and commitment to the ease of doing business.

“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.”

The manufacturers’ association suggested that reducing turnaround time for vessels and improving cargo clearing processes could significantly boost revenue instead of increasing port charges.

It also advised the government to address bureaucratic bottlenecks that delay cargo clearance in order to ensure faster throughput and more efficient revenue collection, adding that improving port infrastructure would enhance operational efficiency and attract more business, leading to natural revenue growth.