Why Importation in Nigeria Could Get a Whole Lot More Expensive

I was scrolling through my Twitter yesterday afternoon (I humbly decline to refer to it as X), and a tweet by a user called Oloye (@ol0ye) caught my eye. It was something about car prices shooting up—again—and becoming more and more out of reach for the average Nigerian.

Usually I would nod my head in exasperation and scroll past this, but I recognized the account. Oloye isn’t just any guy tweeting complaints from his sofa; he’s actually a car dealer, and a fairly prominent one in Twitter Circles, and so I texted a trusted client of mine who is a car dealer himself, and he didn’t mince words: “Mide, dealers are now struggling to clear cars.”

I saw the same sentiment re-echoed as I scrolled through my social media, and that got me curious. What’s changed? Why are cars becoming luxury items overnight? And perhaps more importantly, will I be able to buy a car in the near future, or do I go looking for a bicycle instead?

I decided to go looking for the answer and spent yesterday evening and the early hours of this morning doing just that.

What’s the 4% FOB Levy, and Why Are Importers Upset?

On paper, it’s simple. The Nigerian Customs now charges an additional 4% FOB (Free on Board) levy on all imported items. That is, 4% of the value of the item before shipping or insurance is added.

Now, that wouldn’t be so controversial if Customs used your invoice to determine value. But that’s not how it works.

Instead, Customs has the discretion to decide what your imported item is really worth. They might look at international databases, similar shipments, or… quite frankly, they might just slap on a figure. And that’s where the problem lies.

Let’s say you import a car for $10,000. Your paperwork shows $10k. But Customs decides, “No, we think this car is worth $14,000.” Suddenly, your 4% levy is calculated on $14,000, not $10,000. And guess what? So are your duties, VAT, ETLS, and everything else.

That’s how cars, and pretty much everything else, could become unaffordable, and fast.

Per Oloye, “Cars are not becoming more expensive because of 4% FOB. Cars are becoming expensive because the valuation of cars/goods is no longer set by their invoices. They’ll be arbitrarily set by customs. You’ll pay duties, levies, VAT, and FOB based on arbitrary upward revaluations.”

And this isn’t limited to cars. You could import a $200 laptop, and Customs might revalue it to $600. Suddenly, you’re paying 3x more in duties.

Why Would Customs Do This?

Here’s a clue: the Nigerian Senate just raised Customs’ revenue target to ₦10 trillion, up from ₦6 trillion.

Customs has KPIs now. Like a sales team. Only instead of selling, they’re collecting. That “₦10 trillion” needs to come from somewhere, and you and I are the easiest targets.

This isn’t me speculating in isolation. Back in 2015, TheCable published an undercover investigation that detailed bribery, forgery, and all the institutional rot in Nigeria’s Customs. It hasn’t gotten better. If anything, it’s just gotten smarter.

Why This Matters to You

If you think this is just an importer’s problem, think again. Every car, every laptop, every spoon, every pillow, and basically any other item imported into Nigeria goes through this system. When clearing becomes harder and more expensive, who else do dealers transfer the cost to but you, the buyer?

The odds that you can escape this are also pretty low. Chances are, you’re using an imported phone right now. Or perhaps you’re wearing imported jewelry, or maybe you’re reading this while eating imported spaghetti.

Even honest importers can’t win. Because the system isn’t designed to reward honesty, it rewards leverage.

Perhaps you and I import the same ₦40m equipment. Customs revalue yours to ₦50m. Mine? ₦70m. Who runs out of business first?

That’s another one of my concerns: the fact that this could easily be used as a political tool to benefit some more than others.

But Is There Any Value in Customs Revaluation?

Yes, there is. In theory, at least. It’s true that some importers under-declare values to avoid taxes.

An importer could bring in, say, a phone for $300 and declare it to be worth half that to get a significant reduction on the ad valorem levy

Customs is supposed to verify prices to stop that; it’s supposed to be about fairness, but it stops being fair when that verification is arbitrary, inconsistent, and unchecked.

It stops being fair when one officer can make or break your business because of a number he picked from some dusty Excel sheet.

So, What Can Be Done?

Acknowledging and addressing the problem is just half of solving it. I believe Customs can be more transparent and fair if certain tighter controls are implemented:

1. Mandate Published Valuation Benchmarks: Create a public, regularly updated database of standard FOB values for common imports. If my car’s value doesn’t match what’s online, I should at least know why.

2. Establishment of an Independent Oversight Body: Customs’ valuation decisions should be reviewable by an independent committee, not just internally. Importers need a real channel for appeal and not a “go and come back” desk.

3. Enforce Digital Documentation Only: Eliminate discretion by requiring all invoices, shipping manifests, and valuation steps to be submitted and reviewed digitally, with no side conversations or brown envelopes.

   
   

Final Word

Contrary to what a number of people think, I don’t think the 4% FOB levy is the real villain here. The problem is discretion. It’s the unchecked ability of Customs to assign whatever value they like to your goods and make you pay accordingly.

In a system like that, fairness becomes optional. And eventually, business becomes unsustainable.

In the end, I don’t think the primary role of Customs should be to generate excessive revenue. That may sound naive, but I believe its core duty is to facilitate trade, protect national borders, and ensure compliance, not to function like a tax collector.

When policies become centered purely on squeezing money out of citizens, you stop building a system and start bleeding it dry.

Until Customs is held to tighter standards, Nigerians will keep paying the price.

Literally.