The Nigeria Customs Service (NCS)?s licensing fee for agents and freight forwarders will increase 20-fold to N10 million, BusinessDay can confirm.

An internal Customs memo seen by BusinessDay shows that customs agents and freight forwarders applying for new licences will pay N10 million, rather than the current N515,000 charge.

Renewal fees will rise from N215,000 to N4 million, while importers and exporters will also need to obtain bank bonds of up to N20 million, from the current N350,000, as a financial guarantee.

For bonded warehouses, licence fee will skyrocket from N60, 000 to N20 million.

Renewals will cost N10 million from the current N60, 000. Terminals will be required to obtain bank bonds of N500 million, a 900 percent increase from the N50 million currently required.

Ship chandlers are not exempted. The document shows that ship chandlers, currently paying N515 for licences, will pay a new fee of N2 million.

Renewal will cost half of the cost of a new fee at N1 million, and bank bond requirements are also set for massive hikes, from N350,000 to N2 million.

The last time fees were reviewed was in 2002, when the federal government increased the licensing fee for new customs clearing agents from N20,000 to N500,000, while annual renewal was put at N200,000.00, from N10,000.00.

Customs? position

Customs says the review is intended to ?reflect prevailing economic realities, including the value of exchange rates, address operational demands,? in line with Sections 103 and 107 of the Nigerian Customs Service Act 2023, which suggest that individuals who wish to transact business with the Service ?shall have fulfilled all the licensing requirements imposed by this Act or regulations made under this Act.?

Though the latter section states that ?the Service shall hold consultations with customs representatives together with the traders,? an inland bonded terminal in Lagos, also affected by the new fees, told BusinessDay that they ?just found out about it yesterday,? despite reports that discussions had begun since late August.

If the current proposed rates stand, the domino effect will be felt throughout the sector, which is already grappling with high costs.

Frank Onyebu, an importer and past chairman of the Manufacturers Association of Nigeria, Apapa, told BusinessDay that he expects clearing agents to consequently raise their charges if the Customs succeeds with their proposal.

?The agents have to recover whatever they are paying to the government. So, it will start to trickle down to whoever their clients are. That includes all importers and manufacturers,? he said. ?It?s going to get back to the importers and then eventually going to get back to the consumers.?

The discussions come barely a week after the Nigerian government formally introduced a four percent free on board (FoB) charge on imports into the country to replace the one percent Comprehensive Import Supervision Scheme (CISS).

Onyebu noted that the Service is racing to meet revenue targets without regard to economic peculiarities.

Another trader, who spoke to BusinessDay, described the government?s recent sporadic reforms as ?commendable? yet ?overzealous? and ?counterproductive.?

?We have to be careful that we?re not breaking the back of those that want to try and endure with these numbers of extremely high reforms,? said George Coleman, whose company supplies cables to infrastructure and industrial projects within West Africa.

He noted that the Customs? introduction of the FoB charge while simultaneously increasing fees on agents will not ?make them any more efficient,? but only ?create a bigger hole into the system? that leads to reform fatigue.

?And if you get reform fatigue, it will be counterproductive to what the gains of the reforms would be,? he said. ?Nobody is objecting to reforms. What people are saying is that the pace and speed of reforms need to be calculated against the ability of the economy itself to take the hit.?

The NCS said compliance with the reviewed licence qualifies agents for ?premium perks? that include ?priority processing, better engagement channels with Customs officers, and deeper integration with upgraded digital platforms.?

But discussions might be far from over as clearing agents, who have met with the Service in closed-door meetings, are not having it.

?It?s a shame. There is no reason for it. If the economy is bad, we feel it more than the Customs. Agents pay duties to Customs daily,? Sulaiman Ayokunle, a clearing agent and executive member of the Association of Nigeria Licensed Customs Agents, told BusinessDay. (Business Day)

Update news