The Nigeria Customs Service (NCS) has announced strategic exemptions from the 4% Free-on-Board (FOB) levy for key sectors, including MAN members, commercial airlines, healthcare goods, and government projects with Import Duty Exemption Certificates (IDEC). This development marks a notable step toward bolstering Nigeria’s industrial growth, reducing compliance costs, and improving trade facilitation.

• Targeted exemptions: The 4% FOB charge will be waived for several critical sectors:
  • Manufacturers: Importers of raw materials, spares, and machinery that fall under concessions in Chapters 98 and 99 of the Customs Tariff are immediately exempt.
  • Onboarding for others: Manufacturers whose imported items are not yet on Chapters 98 or 99 will be onboarded to enjoy the same exemptions. A tripartite consultation involving the Federal Ministry of Finance, NCS, and MAN will expedite this process.
  • Credit for prior payments: Manufacturers already paying 4% FOB but not yet onboarded will receive credit for future customs transactions.
  • Commercial airlines: Importation of spare parts for commercial airlines is now exempt.
  • Healthcare: Goods imported under the Presidential Initiative for unlocking the Healthcare value chain are exempt.
  • Humanitarian and government projects: Goods for humanitarian, life-saving, and related purposes, as well as government projects with IDEC, are exempt.
• Policy intent: The exemptions aim to support manufacturing operations, reduce cost pressures, and strengthen Nigeria’s economic transformation agenda. The move follows guidance from the Ministry of Finance and reflects ongoing efforts to streamline trade processes.

 Matters;;

• Cost reduction for manufacturers: By removing the 4% FOB levy on essential inputs, manufacturers can lower production costs, potentially leading to better pricing, competitiveness, and job preservation.
• Trade facilitation: The exemptions, alongside broader trade facilitation initiatives, are designed to reduce bureaucratic bottlenecks and accelerate legitimate trade.
• Strategic sectors supported: Airlines, healthcare, and humanitarian/government projects stand to benefit significantly, ensuring continuity of critical services and operations.

Next Steps;;

• Onboarding and consultations: A three-way collaboration among the Federal Ministry of Finance, NCS, and MAN will facilitate onboarding for items not currently covered by Chapters 98 and 99.
• Digital and process improvements: The NCS is pursuing technology-driven initiatives, including one-stop shop frameworks, reduced checkpoints, real-time clearance capabilities, and automated risk assessment systems, to further lower compliance costs.

• MAN President, Francis Meshioye: Emphasized the operational challenges faced by manufacturers and highlighted commitments from the NCS to enhance trade facilitation.
• NCS leadership: Stressed ongoing collaboration with MAN and the broader private sector to ensure policy developments are responsive and beneficial to Nigerian industry.

This development represents a meaningful policy shift designed to support Nigeria’s manufacturing base, critical transport and healthcare sectors, and government-driven projects. As these exemptions roll out, stakeholders can expect a more predictable and cost-efficient import landscape, with ongoing dialogues to refine and expand the exemptions as needed.

If you’re a manufacturer, airline operator, healthcare importer, or involved in humanitarian or government projects, this news may translate into substantial savings and smoother import processes. Stay tuned for official guidance on onboarding timelines and documentation requirements, and consider participating in the announced tripartite consultations to ensure your items are captured under the exemptions.