Economists, shippers express worry over Customs’ N12tr revenue target

•Criticise NASS’ detachment from challenges of declining trade

Some economists, shippers, and importers have condemned the National Assembly’s proposed N12 trillion revenue target for the Nigeria Customs Service (NCS) in 2025, warning of devastating consequences for international trade, local industries, and consumers.

They argued that the target, double the initial N6.5 trillion proposal, could stifle economic activity, drive importers out of business, and worsen hyperinflation.

Stakeholders caution that the ambitious goal would raise import costs, compounding the struggles of businesses already burdened by high operational expenses and an unstable economy.

The National Assembly Joint Committee on Finance announced the new revenue target on Tuesday, with Chairmen Senators Sani Musa and James Faleke instructing the Comptroller-General of Customs, Bashir Adeniyi to achieve the N12 trillion projection in the 2025 appropriation bill.

The Head of the Customs and Trade Facilitation Committee at the Importers Association of Nigeria (IMAN), Ajanonwu Vincent, expressed disappointment over the lack of attention to Nigeria’s declining international trade. He criticised the National Assembly for prioritising revenue generation over economic realities.

“The National Assembly members are not importers, who feel the blunt effects. They are not part of the masses, who bear the pains of high tariffs and over-taxation. Their focus seems to be on perpetuating squandermania,” Vincent stated.

He highlighted the cascading effects of high tariffs, which discourage trade, stifle local industries, and push importers out of business. Vincent lamented that shipping companies are downsizing, agents are jobless, and many importers have shut down, while the masses are starving to death.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, warned that the higher revenue target would exacerbate the financial strain on businesses.

He said clearing costs are already high due to the exchange rate used to calculate import duties, noting that increasing the revenue target now would be unfair to the business community.

Yusuf emphasised the inflationary impact of the policy, as businesses would pass on the additional costs to consumers, who are already grappling with economic hardships.

Yusuf also noted that many importers are diverting goods to neighbouring countries with lower import costs, posing risks to Nigeria’s maritime sector. He warned that declining cargo volumes would significantly impact terminal operators, bonded terminal operators, clearing agents, and the Nigerian Ports Authority (NPA), resulting in financial losses for investors.

Former President of the Shippers Association of Lagos (SAL), Jonathan Nicol, explained that customs revenue depends on cargo availability, which has been declining due to rising costs and unfavourable business conditions.

“If the cargo is there, shippers will gladly pay duties. Without cargo, how can N12 trillion be achieved?” Nicol questioned. He outlined the cumulative costs faced by shippers, warning that additional levies would drive businesses to more competitive ports in neighbouring countries.

Nicol also criticised the government’s lack of collaboration with shippers, calling for their inclusion in policy-making processes.