Suspension of Import Levy Saves Nigeria from Price Hike

The Manufacturers Association of Nigeria has welcomed the government’s decision to suspend the 4 percent Free-on-Board import levy, describing it as a timely intervention that spared the country from another round of price increases. For manufacturers and ordinary Nigerians already struggling with inflation at 21.88 percent, the relief could not have come at a better time.

Segun Ajayi-Kadir, the Director General of MAN, explained that the levy, which was reintroduced in early August, posed a real threat to both the manufacturing sector and the wider economy. Most raw materials, machinery, and spare parts that keep factories running are still imported, and an extra charge would have instantly raised production costs. That burden would have been passed on to consumers, making everyday goods even more expensive. In a country where many households are already stretched thin, the impact could have been severe.

He described the suspension as a move that saved the economy from self-inflicted pain. According to him, it helped preserve the stability and policy direction the government has been working toward. The association had carried out a technical review and held consultations across its 2,500 members in 10 different sectors. The conclusion was clear: the levy was unsustainable.

The problem was not just the percentage itself but the way it piled on top of other existing charges. Manufacturers already pay a 7 percent surcharge and a 1 percent Comprehensive Import Supervision Scheme fee at the ports. Adding another 4 percent would have pushed costs beyond tolerable levels. Nigerian products would have become less competitive compared to those from neighboring countries, creating an uneven playing field in the regional market.

Beyond higher costs, MAN warned that the levy could have produced unintended consequences. Importers might have diverted cargo to other ports in West Africa, depriving Nigeria of revenue. Others might have resorted to under-declaring goods or using informal cross-border trade to avoid the charge. In the end, government could have lost more revenue than it hoped to gain, while legitimate businesses bore the brunt.

That is why MAN commended the Finance Minister and the Coordinating Minister for the Economy for paying attention to stakeholder concerns. The association urged the government to make consultation a standard practice when shaping revenue policies that affect trade. It recommended an independent review of existing port charges, arguing that the current system already weighs heavily on industry players. According to Ajayi-Kadir, government must strike a balance between raising revenue and supporting industrial growth, especially in line with recent tax reforms and efforts to diversify the economy.

He stressed that protecting local manufacturing should remain a priority. Predictable and competitive trade charges, he said, are essential if Nigeria wants to achieve sustainable growth, create jobs, and secure the well-being of its more than 230 million people. He added that suspending the levy was more than just a relief for manufacturers. It was a sign of responsiveness—a demonstration that government was willing to listen, engage, and act in the best interest of the productive sector.

The backstory provides context. On Monday, the Federal Government officially suspended the levy through a directive signed by the Permanent Secretary of the Federal Ministry of Finance, Special Duties Department. The suspension came after consultations with industry experts, trade specialists, and various stakeholders who raised red flags. Their concern was that the levy would increase costs for importers, reduce competitiveness in trade, and worsen inflationary pressures. The government’s decision to halt the policy showed that those concerns were taken seriously.

For manufacturers, the suspension brings immediate breathing space. With cost pressures already high from energy prices, foreign exchange volatility, and logistics bottlenecks, avoiding an additional levy means companies can focus more on productivity and less on survival. For consumers, it means the prices of everyday goods are less likely to spike in the short term. For the wider economy, it signals a government willing to weigh the bigger picture rather than pursue short-term revenue at the expense of long-term growth.

In many ways, the decision also highlights a growing shift in the policy approach of the current administration. Instead of sticking rigidly to unpopular measures, officials have shown a readiness to review, adjust, and consult. That shift may prove important in building trust between the private sector and policymakers, a relationship that is critical for sustainable industrial growth.

Nigeria’s economy remains under pressure from high inflation, weak purchasing power, and a difficult global environment. But decisions like this suggest that with collaboration and careful planning, some of the pressure can be eased. For now, manufacturers see the suspension of the levy not only as a reprieve but also as a message of hope that government understands the importance of keeping industry alive and competitive in tough times.