What's Happening?
The Nigeria Customs Service (NCS) and the Manufacturers Association of Nigeria (MAN) have reached an agreement on strategic exemptions from the recently suspended four percent Free on Board (FoB) charge. This decision was made during a joint consultative meeting in Lagos, aimed at easing manufacturing operations and strengthening Nigeria's industrial growth. The exemptions are part of a broader initiative to balance the NCS's revenue mandate with trade facilitation objectives, reflecting the government's commitment to protecting critical sectors like manufacturing. The exemptions include 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 include manufacturers not currently on these chapters, with immediate consultations planned to expedite this process.
Why It's Important?
This agreement is significant as it aims to reduce production costs and improve industrial competitiveness in Nigeria. By exempting certain manufacturing imports from the FoB charge, the initiative supports the growth of the manufacturing sector, which is crucial for economic development. The collaboration between NCS, MAN, and the Ministry of Finance highlights a commitment to fostering a conducive environment for industrial growth. This move is expected to alleviate operational challenges faced by manufacturers, such as multiple checkpoints and clearance system glitches, thereby enhancing efficiency and reducing compliance costs.
What's Next?
The immediate next steps involve tripartite consultations to work out the modalities for onboarding manufacturers onto chapters 98 and 99. Additionally, the NCS has committed to ongoing consultations with manufacturing stakeholders to develop trade facilitation infrastructure and technology solutions that support industrial growth. Regular briefings on policy developments will be provided to ensure manufacturers are informed and can adapt to changes effectively.
