The federal government has suspended the implementation of the new four per cent Free On Board (FOB) levy on imported goods amid concern that it would add trillions of naira annually to importation costs.

In a statement released by the Ministry of Finance on Monday, the Nigerian government said it became necessary to pause the enforcement of the charge by the Nigerian Customs Service because it has become clear that the policy poses a significant threat to the country’s economy.

“Pursuant to the powers vested upon the Honourable Minister of Finance and the Coordinating Minister of the Economy under Part III, Section 12 of the Nigeria Customs Service Act, 2023 as the Chairman of the Board of Nigeria Customs Services, I write to direct the immediate suspension of the implementation of the collection of four per cent Free on Board (FOB) recently levied by the Nigeria Customs Service on all imported goods,” a part of the statement said.

The statement added, “Following extensive consultations with industry stakeholders, trade experts, and relevant government officials, it has become clear that the implementation of the four per cent FOB charge poses significant challenges to the Nigerian trade facilitation, environment and economic stability. Many importers and businesses have raised concerns about the increased financial burden this levy imposes, with potential adverse effects on inflation, trade competitiveness, and the overall business climate in Nigeria.”

The decision came after several stakeholders, including the Importers Association of Nigeria, voiced against any attempt by the President Bola Tinubu administration to proceed with the plan, arguing that the FOB levy is estimated to add N4 trillion annually to freight costs, a burden that would be transferred directly to consumers.

“This is what IMAN in the South-West zone is fighting to ensure that the Nigerian Customs Service, NCS, do not implement such dangerous economic policy. The IMAN estimates that the levy could add 3-4 trillion annually to freight costs, a burden that will be transferred directly to consumers,” the national president/Board of Trustees chairman, Gilbert Obi, told Vanguard at the union’s executive meeting.

Amid ongoing intensive revenue overhaul by Mr Tinubu to boost transparency, the four per cent FOB levy was set to replace the existing per cent Comprehensive Import Supervision Scheme (CISS) and the seven per cent cost of collection levied on importers.

Meanwhile, the ministry said the suspension will enable the government to engage with relevant stakeholders and provide a chance for a thorough review of the levy’s framework and its broader economic implications.