Nigeria Customs and Manufacturers Association Agree on 4% FoB Exemptions to Support Manufacturing

What's Happening?

The Nigeria Customs Service (NCS) and the Manufacturers Association of Nigeria (MAN) have reached an agreement to implement strategic exemptions from the four percent Free on Board (FoB) charge. This decision was made during a joint consultative meeting in Lagos, following the directive of the Minister of Finance to temporarily suspend the levy. The exemptions aim to protect critical sectors, particularly manufacturing, while ensuring efficient revenue collection. The agreement includes exemptions for the importation of raw materials, spares, and machines by manufacturers benefiting from concessions in chapters 98 and 99 of the Customs Tariff. The NCS, MAN, and the Federal Ministry of Finance will collaborate to expedite the onboarding of manufacturers not currently included in these chapters.

Why It's Important?

This development is significant for Nigeria's manufacturing sector as it aims to reduce production costs and enhance industrial competitiveness. By exempting certain imports from the FoB charge, the government is demonstrating its commitment to supporting the manufacturing industry, which is crucial for economic growth and job creation. The exemptions are expected to alleviate some of the operational challenges faced by manufacturers, such as multiple checkpoints and alerts in the clearance system. This move could lead to increased investment in the sector and improved collaboration between the government and industry stakeholders.

What's Next?

The NCS and MAN plan to continue their collaboration to further develop trade facilitation infrastructure and implement technology solutions that reduce compliance costs. They will also work on creating a one-stop-shop framework to cut bureaucracy and periodically review customs policies to better reflect the needs of the manufacturing sector. An immediate tripartite consultation will be held to finalize the modalities for onboarding manufacturers to the relevant tariff chapters, ensuring that the exemptions are effectively implemented.