The Nigeria Customs Service

The Customs trade-off

Every naira the Customs Service collects at Apapa, Tin Can, Onne, PTML, Calabar or Seme is a naira the federation can spend on roads, salaries and debt service. In 2024 NCS remitted ₦6.1 trillion — more than three times the entire federally-collected revenue of the year 2000. That is the side of the ledger every Finance Minister wants to talk about.

But the same naira is also a tax on the Nigerian who buys the imported good. A used car landed at Tin Can with a CIF value of ₦10 million attracts ₦3.5m in duty, a ₦3.5m levy and 7.5% VAT on the new value. A 50kg bag of milled rice that the importer paid ₦40,000 for becomes ₦68,000 at the gate before the trader's margin. This is the tariff wedge — and it is the second, quieter mandate of NCS: to discourage imports by making them expensive.

The contradiction is structural. The more successful NCS is at raising revenue from imports, the more it depends on Nigerians continuing to import. The more successful it is at protecting domestic industry, the less revenue it collects. The August 2019 partial land-border closure is the cleanest case study: revenue per shipment rose, total revenue stagnated, and food inflation hit a 15-year high. NCS cannot be optimised for both at once.

The 2023 NCS Act re-enacted the Service with a new governance structure (a Board chaired by the Minister of Finance) and a clearer statutory share of the duties it collects (4% of non-oil revenue for cost-of-collection). What the Act did not do — and could not do — was resolve the trade-off itself. That is a question for the Tariff Review Board, the Common External Tariff, and ultimately the National Assembly.