The Nigeria Customs Service (NCS) has announced the suspension of the implementation of the 4% Free-on-Board (FOB) value charge on imports, as stipulated in Section 18(1)(a) of the Nigeria Customs Service Act (NCSA) 2023.
This decision, communicated through a press release signed by Assistant Comptroller of Customs and National Public Relations Officer, Abdullahi Maiwada, on Tuesday, follows extensive consultations with the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, alongside other key stakeholders.
The suspension aims to facilitate comprehensive engagement with relevant stakeholders to refine the framework for implementing the Act.
The timing of this policy shift coincides with the expiration of the contract agreements with Service providers such as Webb Fontaine, who were previously financed through the 1% Comprehensive Import Supervision Scheme (CISS).
Addressing Funding and Operational Challenges
Under the previous system, the separation of the 1% CISS and the 7% cost of collection created inefficiencies and funding gaps in the modernisation of customs operations. The NCSA 2023 was designed to address these shortcomings by consolidating the funding structure under a provision that allows “not less than 4% of the Free-on-Board value of imports.”
This framework is expected to provide a more sustainable funding mechanism for critical customs operations, technological advancements, and modernisation initiatives.
NCS says during the suspension period, the NCS will focus on optimising the management of this new revenue framework while ensuring that its implementation aligns with national economic interests and trade facilitation objectives.
Technology-Driven Modernisation and Trade Facilitation
The NCSA 2023 empowers the Nigeria Customs Service to drive modernisation through various technological innovations. Section 28 of the Act mandates the development and maintenance of electronic systems to facilitate seamless information exchange between the NCS, other government agencies, and traders.
As part of its digital transformation agenda, the Service has already implemented several innovative solutions, including the recently deployed B’Odogwu clearance system. This system has significantly improved clearance times and enhanced transparency within the import process.
Other key modernisation initiatives outlined in the Act include:
- Single Window Implementation (Section 33): A centralised digital platform to streamline trade facilitation and reduce bureaucratic bottlenecks.
- Risk Management Systems (Section 32): Leveraging data analytics and artificial intelligence to improve risk profiling and enhance security at entry points.
- Non-Intrusive Inspection Equipment (Section 59): Deployment of scanning technologies to expedite cargo clearance while minimising physical inspections.
- Electronic Data Exchange Facilities (Section 33(3)): Enhancing interoperability and real-time data sharing among trade stakeholders.
These advancements are expected to bolster Nigeria’s trade competitiveness, improve customs efficiency, and strengthen anti-smuggling measures.
