Customs’ N12t revenue target ill-advised and may cripple businesses, says APFFLON President

As the National President, Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Otunba Frank Ogunojemite, is marking his birthday today, he has stated that the N12 trillion revenue target of the Nigeria Customs Service for 2025 is ill-advised and may further cripple businesses and cause inflation to soar higher than 2024.

Otunba Frank Ogunojemite made this observation in his birthday message from the US and pointed out several consequences of the ill-advised revenue target.

Ogunojemite said “my observation in port business is that high customs duty in Nigeria leads to increased cost of imported goods, hinders business growth, discourages foreign investment, promotes smuggling activities, and potentially impacts the overall economy by raising inflation and reducing purchasing power.”

In the birthday message, the APFFLON President analysed the consequences of the unrealistic Customs targets and high Customs duties thus:
Higher consumer prices:
When customs duties are high, the cost of imported goods increases significantly, which is passed on to consumers in the form of higher prices, impacting affordability, particularly for essential items.

Discourages business investment:
High import duties can make it difficult for businesses to import necessary raw materials and equipment, leading to higher production costs and discouraging foreign investment in the country.

Smuggling activities:
Nigeria Customs Service (NCS) has performed admirably in curbing smuggling but a closer look at the menace, according to experts, can be traced to to high customs duties that incentives smuggling. Several honest businesses and individuals try to circumvent customs regulations to avoid paying high taxes, impacting government revenue.

Reduced competitiveness:
Amidst Nigeria’s optimism to benefit in the regional trade under African Continental Free Trade Area (AfCFTA) agreement, the pressure to generate huge revenue at ports and high import duties can make Nigerian businesses less competitive in the global market, as their products may be more expensive compared to imported goods.

Impact on economic growth:
By raising the cost of imports and discouraging trade, high customs duties can negatively affect overall economic growth and development.

Job losses:
If businesses are unable to operate efficiently due to high import costs, it can lead to job losses in the affected sectors.

“As the National President of Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), I am celebrating my birthday today in far away United States of America; but my heart, my love and birthday message are dedicated to saving the Nigerian economy from crisis occasioned by needless financial targets.

“The recent N12trillion revenue target for 2025 given to the Nigeria Customs Service (NCS) is an ill-advised recommendation and I enjoin the National Assembly to note that beyond the huge revenue generation by Customs which increases year-on-year, several Nigerian businesses are being crippled while the ordinary citizens suffer from inflated costs of services and products which have been imported and mandated to pay high Customs duties.

“In light of skyrocketing customs duty rates and a staggering 150% increase in asset prices over the past year, the prospect of acquiring new assets appears daunting. While potential relief may come from the Senate’s consideration of a bill to stabilize exchange rates for customs duties, the immediate reality remains challenging. Businesses are already grappling with the financial strain worsened by overzealous Customs activities in a bid to meet financial targets.

“As businesses struggle to navigate economic uncertainties more effectively, preserving capital and maintaining operational agility, amidst these turbulent times, the smart choice is for the National Assembly to inspire Customs to tilt towards trade facilitation rather than revenue generation anchored on import duties,” said the celebrant.

It would be recalled that the National Assembly through its Joint Committee on Finance significantly increased the 2025 revenue projections for the Nigeria Customs Service (NCS) during a budget defence session in Abuja. The committee raised the NCS’s initial revenue target from N6.5 trillion to a bold N12 trillion.

The Comptroller-General of the Nigeria Customs Service, Bashir Adewale Adeniyi, had earlier presented a projection of N6.5 trillion for 2025, following a robust performance in 2024, where NCS generated N6.1 trillion.

However, the committee, led by Senator Sani Musa and Hon. James Faleke, deemed the projection insufficient given the NCS’s potential.