The Manufacturers Association of Nigeria has raised alarm over the Nigeria Customs Service’s reported plan to reinstate a 4% Free-On-Board levy, labeling it a potential catalyst for de-industrialization.

In a statement Tuesday, MAN’s Director-General, Segun Ajayi-Kadir, described the move as “unfortunate and retrogressive,” arguing it disregards the interests of manufacturers and other key stakeholders.

MAN cautioned that the levy’s reintroduction could devastate Nigeria’s already strained manufacturing sector, which it says is “stretched beyond its resilience capacity.”

The association warned of broader negative impacts on the business community and Nigerian citizens, predicting severe economic fallout.

The statement urged the NCS to reconsider the .policy to avert catastrophic consequences for the sector and the nation’s economy.

Ajayi-Kadir stated, “It is imperative to warn that the Nigerian manufacturing sector is increasingly being burdened beyond its well-known resilience thresholds. The results of our quarterly manufacturers CEO confidence index has continued to show less optimism about the outlook of the sector. De-industrialisation stares us in the face.

“We should not be heading in a different direction when most governments across the world are aggressively promoting their industrialisation agenda and pushing highly nationalist agenda to grow their domestic production.”

He argued that bringing back the FOB policy would place an extra financial burden on manufacturers, who are already paying a one per cent Comprehensive Import Supervision Scheme fee.

The MAN DG said, “It is equally worrisome that this is coming at a time when there is still a looming danger of the unwarranted 15 per cent hike in port charges; our members are struggling with the astronomical increase in the effective import duty calculations rate and contending with unprecedented rise in the cost of energy.

“Already high cost of importation due to the prevailing exchange rate used in calculating the customs duty will further escalate. This is evident in the cost, which had earlier jumped by over 118 per cent, from N2.07 trillion in the first nine months of 2023 to N4.53 trillion in the same period of 2024.”

MAN expressed hope that the NCS would ultimately reverse its plan to introduce the widely unpopular and poorly timed FOB levy.

It warned that the policy should be dropped before it escalates into a serious economic crisis.

Ajayi-Kadir emphasized that the focus should instead be on enhancing trade facilitation measures to address the existing challenges hindering the full potential of Nigeria’s productive sector.

He stated that the FOB levy would severely disrupt the supply chain, lead to raw material shortages for many manufacturers, result in higher demurrage costs, increase the already large volume of unsold inventory, and further undermine the competitiveness of Nigerian manufacturers.