The recent tariff hike in the nation’s marítime sector has been linked to the N14.260 trillion revenue targets slammed on the various agencies in the sector by the National Assembly.
LEADERSHIP Weekend reports that the National Assembly Joint Committee on Finance increased the revenue projection of the Nigeria Customs Service (NCS) from N6.5 trillion to N12 trillion for 2025.
The committee also raised the Nigerian Ports Authority (NPA) 2025 revenue from N997 billion to N1.75 trillion, while the Nigerian Marítime Administration and Safety Agency (NIMASA) projected a revenue target of N560 billion.
The Joint Committee on Finance is chaired by Senator Sani Musa and Hon. James Faleke of the House of Representatives.
However, since the announcement of the increase in the revenue target, the concerned agencies have either introduced a new surcharge or reviewed their tariff upward.
For instance, the Nigeria Customs Service. Introduced the 4% Free on Board (FoB), fee on importers and clearing agents as contained in the Nigeria Customs Service Act, 2023. Also, the NPA reviewed its tariff by 15 per cent.
However, stakeholders described tariff increase and introduction of levy by customs as a fallout of the agency’s revenue targets by the National Assembly.
They argued that the NASS’s upward review of revenue targets for Marítime agencies could cripple the Nigerian economy, causing higher inflation, deeper poverty and a weakened investment climate.
They said though, the government may achieve its revenue goals but with severe consequences of higher costs of goods, business closures, rising unemployment, and worsening economic hardship for millions of citizens.
According to the Nigeria Employers’ Consultative Association (NECA), with Nigeria’s annual imports estimated at N71 trillion, the newly introduced levy will impose an additional N2.84 trillion in costs on importers and businesses.
While, for industries that rely on imported raw materials, the charge will drive duty payments up by 80 per cent, significantly inflating production costs and eroding competitiveness.
However, speaking exclusively to LEADERSHIP, the National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Otunba Frank Ogunojemite, stated that the ambitious revenue target given to the agencies will cripple businesses and citizens will suffer from the inflated cost of services and products.
“The recent N12trillion revenue target for 2025 given to the Nigeria Customs Service (NCS) is an ill-advised recommendation and I enjoin the National Assembly to note that beyond the huge revenue generation by Customs which increases year-on-year, several Nigerian businesses are being crippled while the ordinary citizens suffer from inflated costs of services and products which have been imported and mandated to pay high Customs duties.”
“The smart choice is for the National Assembly to inspire Customs to tilt towards trade facilitation rather than revenue generation anchored on import duties because high customs duty can lead to several negative consequences, including increased cost of imported goods for consumers, hindering business growth, discouraging foreign investment, promoting smuggling activities, and potentially impacting the overall economy by raising inflation and reducing purchasing power.”
Also speaking, the Nigeria Employers’ Consultative Association (NECA) said the timing is insensitive as it will further impoverish Nigerians.
The association said that imposing the 4% FOB levy amid prevailing economic hardships is ill-timed and detrimental to businesses and Nigerians.
The director general of NECA, Adewale-Smart Oyerinde, said with the introduction of the FOB levy, import-dependent businesses will escalate production costs which will fuel inflation and threaten jobs.
Oyerinde stated, “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 further strangulate them. These additional financial import-dependent businesses will escalate production costs, fuel inflation, and threaten jobs. Ultimately, consumers will suffer from higher prices, worsening an already challenging economic climate.”
Oyerinde said prioritising revenue generation over its core mandate of trade facilitation and economic development.
“With a revenue target of N12 trillion set for the Nigeria Customs Service 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.
He further noted that the new charge contradicts ongoing tax reform efforts led by the Presidential Fiscal Policy and Tax Reforms Committee, chaired by Taiwo Oyedele, which aims to harmonise taxes and support business sustainability.
“At a time when businesses are calling for a streamlined tax system, this levy undermines reform efforts and sends a negative signal to investors,” he warned.
Also speaking, the head of Research, the Sea Empowerment and Research Center (SEREC), Frwd Eugene Nweke, condemned the N12 trillion revenue target given to the Nigeria Customs Service (NCS) by NASS.
Nweke told LEADERSHIP, that the N12 trillion revenue target for the Nigeria Customs Service in 2025 is quite ambitious and a stretch, considering the current state of the economy.
According to Nweke, the revenue is ambitious in the face of heightened trade policy uncertainties, dwindling import and export activities, low ship calls to ports, and lower cargo throughputs impacting import volumes.
He also disclosed that an unstable foreign exchange regime and a harsh trading environment are additional hurdles that could hinder the service progress from achieving the N12 trillion revenue target.
“The SEREC wish to strongly opine that yearly revenue targets are not just mere figures to be given or pronounced under the euphoria of prevailing excitements; rather, revenue targets are given or pronounced after so many variables and indices duly putting in the right perspectives.
“Such variables or indices may include, weighing the impact of the previous year’s revenue generated on the trading environment, the economy in real-time effects of inflation rate analysis, performance graphs for local production inhibited by imported products, the direct impact to the lives of the citizens in general, with regards to consumers price index and poverty level indicators, etc.
“Against this background, the SEREC is bold to state that the Nigeria Customs Service’s revenue target of N12 trillion for 2025 is quite ambitious and a stretch, considering the current state of the economy. Especially in the face of heightened trade policy uncertainties, leading to dwindling import and export activities, low ship calls to ports, and lower cargo throughputs impacting import volumes, etc. Indeed, it is crucial to project how the NCS intends to achieve this target.
“Take note that the ever-increasing foreign exchange regime and harsh trading environment are additional hurdles that could hinder the NCS progress.
“It’s worth noting that, ahead of schedule, the NCS did achieve a significant milestone in 2024, generating a revenue of N5.07 trillion and at the dying minute reported as closing it up to N6.105 trillion,” Nweke stated
The former president of the National Association of Government Approved Freight Forwarders (NAGAFF) said for the service to meet the new target, they would need to significantly scale up their efforts and find ways to mitigate the challenges posed by the current economic environment.
“However, this milestone was largely due to the NCS strategic engagements and collaborative efforts with stakeholders, as well as improved processes and modernised systems.
“To reach the new target, they would need to significantly scale up their efforts and find ways to mitigate the challenges posed by the current economic environment, in addition to blocking leakages via the deployment of technology.
“The aggressive pursuit of this revenue target in the year 2025 could hurt the trade environment and the economy as a whole. It may lead to increased scrutiny and harassment of importers and exporters, which could further discourage trade and investment, especially where the compliance level is at a single-digit increase.
“Additionally, the focus on revenue generation could divert attention away from other important aspects of customs operations, such as trade facilitation and enforcement of customs regulations.
“Overall, while the NCS’s revenue target is ambitious, it’s essential to consider the potential consequences of aggressively pursuing it. A more balanced approach that takes into account the current economic realities and the need for trade facilitation and enforcement would be more effective in the long run.
“In conclusion, the SEREC wish to offer a word of advice to the government, by reminding and calling its understanding to the effect that, the NCS actions and inactions touch every sphere of our socio-economic life of the citizens, who are already down, poverty-wise, with inflation rate hitting at 34.8 in December, 2024.
“Finally, the SEREC therefore calls on the coordinating minister Finance and Budgeting, who doubles as the chairman board of Customs, to be deliberate and real to his ministerial obligation to the nation in the context of the matter under consideration.”
