FOB Fallout: Finance Ministry, Customs At Loggerhead?

BY FUNMI ALUKO

In a dramatic wist that has sent ripples through Nigeria’s trade and logistics sector, the Federal Ministry of Finance, has ordered the Nigeria Customs Service (NCS) to immediately suspend the controversial 4% Free on Board (FOB) levy on imports—again.

The directive, issued via a memo signed by the Ministry’s Permanent Secretary, Raymond Omachi and dated September 15, cites concerns over inflation, trade competitiveness, and economic stability. Finance Minister, Wale Edun, wielding his authority under the Nigeria Customs Service Act, 2023, emphasized that the levy posed “significant challenges” and called for broader stakeholder engagement before any future implementation.

But the real drama lies beneath the surface as speculation spreads that the Ministry may be playing a script.

Sources within the clearing and forwarding community say the Customs Service was blindsided by the memo, with insiders claiming the agency had no prior knowledge of the suspension order. This revelation has sparked speculation of a possible rift between the NCS and its supervisory ministry.

The 4% FOB levy reintroduced by Customs in August to replace the 1% Comprehensive Import Supervision Scheme (CISS) and the 7% port duty charge was touted as a modernization tool. But critics have argued it would hike import costs by up to 186% for certain goods, adding an estimated ₦4 trillion annually to freight costs.

Importers, customs brokers, freight forwarders, and trade associations like have long opposed the levy, warning it would cripple businesses and worsen inflation. Their pressure led to its initial suspension late last year. Customs, however, revived it recently with both defiant and conciliatory tone, which reportedly unnerved port traders, not knowing what to do.

Now, with the Finance Ministry pulling the brakes once more, questions swirl: Is this a policy tug-of-war or a deeper institutional disconnect?

Observers say the lack of coordination between the two bodies could undermine investor confidence and disrupt Nigeria’s fragile trade ecosystem. Others wonder if the Finance Ministry’s memo was a strategic move to reassert control—or a subtle rebuke of Customs’ action the Ministry may have plotted to push as “unilateralism”?

As stakeholders await clarity, one thing is certain: the FOB levy saga is far from over, and the next chapter may well define the future of Nigeria’s import policy.