Financial experts have warned that implementing the four per cent Free-On-Board (FOB) levy on imports would exacerbate inflation in the country.
The Nigeria Customs Service (NCS) on February 5 announced its introduction of the FOB levy on imports.
According to Abdullahi Maiwada, the service’s spokesman, the introduction of the levy was in line with the provisions of the Nigeria Customs Service Act (NCSA) 2023.
“The FOB charge, which is calculated based on the value of imported goods, including the cost of goods and transportation expenses incurred up to the port of loading, is essential to driving the effective operation of the service,” he said.
However, Wale Adegbite, former chairman of the Manufacturers Association of Nigeria (MAN), Ogun chapter, and Evans Osabuohien, a professor of economics, said the levy would worsen the nation’s inflation rate.
In separate interviews with journalists on Monday in Ota, Ogun, Messrs Adegbite and Osabuohien said the policy would negatively impact the economy.
The former MAN chairman said the four per cent levy by the NCS “is a disaster and will worsen an already bad situation with multiple devastating effects on the economy.
” Why would the government inflict more hardship on the population as this new policy will certainly lead to more price increases, thus further increasing the country’s inflation rate?
“In addition, the masses will suffer more because of the impending price increase without any corresponding increase in income.”
Also, Mr Osabuohien said that though the new FOB policy by the NCS was meant to generate more revenue for the federal government, it would negatively impact the economy.
He said the NCS action would increase the cost of living of households.
The economist explained further that the development would increase the cost of operations of small and medium enterprises (SMEs), especially companies that depend on imported raw materials for production.
“This additional cost to be incurred through the four per cent increase in FOB would be transferred to the consumers, and it would automatically trigger an increase in the nation’s inflation rate,” Mr Osabuohien said.
(NAN)
