The federal government’s decision to suspend the recently introduced four percent Free on Board (FOB) customs levy is a welcome relief for Nigeria’s fragile economy. The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun’s directive reflects not only responsiveness to public outcry but also recognition of the levy’s potential to worsen an already difficult business environment. Yet, while this decision provides temporary relief, we do understand that it also raises a more fundamental question: why do we keep making policies that threaten to strangle growth before they even take root?
When the Nigeria Customs Service (NCS) introduced the levy last month, importers, manufacturers, and traders immediately sounded the alarm. Their argument was simple and accurate: at a time when inflation is running high, the naira is under pressure, and businesses are still reeling from forex scarcity, adding a fresh four percent surcharge on all imports was nothing short of economic self-sabotage. The inevitable outcome would have been steeper prices, higher operating costs, and further erosion of Nigeria’s competitiveness in global trade.
Mr. Edun, in announcing the suspension, admitted as much, acknowledging that the levy’s implementation posed “significant challenges to trade facilitation, the business environment, and economic stability.” The candour is commendable, and the suspension is wise. But the episode exposes a troubling pattern of reactive policymaking: decisions are rolled out without thorough impact analysis, only to be withdrawn under pressure when the damage-or the backlash-becomes obvious.
For us, this is not just about a levy. It is about predictability in governance. Businesses thrive on stability, not surprises. Investors are more willing to commit funds where they can clearly see long-term rules of the game, not a regulatory landscape that shifts like sand under their feet. Every policy misstep deepens uncertainty, and in Nigeria, uncertainty is one of the most expensive taxes businesses pay.
The bigger picture is that Nigeria desperately needs to expand its revenue base. Oil receipts alone can no longer sustain national finances, and customs duties have become an attractive revenue stream. But expanding revenue must not come at the expense of stifling the very commerce and industry that should generate that revenue in the first place. It is a case of killing the goose that lays the golden egg.
The government now has a chance to do things differently. The “comprehensive review” promised by the Ministry of Finance must not be cosmetic. It should involve genuine consultation with the private sector, trade economists, and even consumer groups. A smarter approach would be to design a revenue structure that is equitable, transparent, and efficient-one that broadens the tax net without deepening the burden on struggling enterprises.
Nigeria does not lack policy ideas; it often lacks the discipline to align revenue ambitions with economic realities. The suspension of the four percent customs levy is a reprieve. But unless the government learns the lesson of foresight-testing the waters before diving in, weighing economic costs before raising fiscal targets-we will be here again in a few months, debating another ill-fated policy rolled out in haste.
Our position is that for now, Mr. Edun deserves credit for listening. The real test, however, lies ahead: can the government demonstrate the maturity to design tax and trade policies that fuel growth rather than choke it? The answer to that question will determine whether Nigeria’s economy can finally turn the corner from fragility to resilience.
