Customs-, import- and export regulations of Nigeria - Overview
The customs and excise tariff of the Nigerian Customs Service (NCS) is based on the nomenclature of the Customs Cooperation Council (CCCN). Customs duties are either specific or ad valorem, depending on the goods, and are payable in Nigerian Naira on entry. Import duties are non-preferential and apply equally to all countries outside the Economic Community of West African States (ECOWAS). A local insurance company must insure all imported goods. A special duty may be imposed on imported goods if the government believes that these goods are being dumped or unfairly subsidised, threatening established or potential domestic industries.
Duties already paid on abandoned, re-exported, damaged or destroyed goods can be refunded. However, an application must be made before the goods leave the customs area. To obtain a refund of duties paid on subsequently destroyed goods, a certificate of destruction must be presented by a customs officer. On presentation of a customs certificate attesting to the landing of goods in another country, duties paid on those goods in Nigeria will be refunded.
Nigeria uses non-tariff trade barriers to become self-sufficient in certain commodity markets. As part of the government's action plan to transform the agricultural sector, it has introduced a scheme that allows millers to replace up to 40% of the wheat flour produced in the country with cassava flour. To protect the local industry, the import of some products (including food) is banned, while incentives have been introduced to promote local products.
Inspections
Nigeria has abandoned its pre-shipment inspection policy in favour of a destination inspection policy for imports. Under this policy, all imports are inspected upon arrival in Nigeria. The Nigeria Customs Service (NCS) is currently in the initial stages of procuring scanning equipment that will inspect containers in a more accurate and timely manner.
Customs regulations
Customs clearance is carried out via the electronic customs clearance system NICIS (Nigeria Integrated Customs Information System), which has been expanded to become the Nigeria Single Window for Trade. The online portal offers a lot of helpful information and allows import and export documents and permits to be viewed and processed via a common interface by the authorities and institutions involved. The use of NICIS for customs clearance requires registration.
Business people in Nigeria must register with the Corporate Affairs Commissionand the Federal Inland Revenue Service to obtain a Tax Identification Number (TIN).
Pre-registration
The shipping company is obliged to notify the Nigerian Port Authority of the arrival of ships with an electronic Ship Entry Notice (eSEN).
Normally, incoming sea cargo shipments have to be pre-notified electronically (Advance Cargo Declaration/Cargo Tracking Note). Currently (2021) this is suspended, but the Nigerian government is said to intend to reintroduce it.
Sea cargo shipments must be declared before leaving the last port of call, air cargo shipments must be declared summarily within 24 hours of arrival via the Nigerian Single Window for Trade using an e-manifest.
When importing motor vehicles, the chassis number, car make, model and year of manufacture must be entered on the manifest, and when importing electrical and electronic equipment, the NESREA registration number of the environmental authority must be provided.
Customs tariff, duties and taxes on imports
Customs taxes on imports are on average 11.2%.
Nigeria applies the Common External Tariff (CET) of the Economic Community of West African States (ECOWAS) to third countries with which no preferential agreement exists. The tariff is based on the Harmonised Commodity Description and Coding System (HS) 2017 international commodity nomenclature. Ad valorem duties ranging from zero to 35 per cent are levied on the following categories of goods:
- Staple goods – 0%
- Raw materials and capital goods – 5%
- Intermediate goods – 10%
- Finished goods– 20%
- Sensitive products whose local production is protected, luxury goods – 35%
Customs duties are calculated on the basis of the customs value of the imported goods. In the context of a purchase transaction, this is usually the transaction value, i.e. the price actually paid or payable based on the CIF (cost, insurance and freight) of the international delivery terms.
From 2020, the application of the uniform tariff rates is mandatory. However, Nigeria continues to apply additional tariffs on certain products.
The latest tax policy measures adopted by the government in 2019 currently consist of:
- a list of 177 goods subject to an additional import adjustment tax (Import Adjustment Tax List).
- a list of 101 goods or groups of goods subject to lower tariffs than the ECOWAS external tariffs (National List).
- a list of 26 groups of goods that may not be imported (Import Prohibition List - Trade).
From 1 January 2021, the Nigerian government will reduce the import duty on tractors from 35 to 5 per cent and that on vehicles transporting more than 10 persons and trucks from 35 to 10 per cent. Passenger cars will be subject to a reduced duty rate from 30 to 5 per cent. Completely knocked down kits (ckd) for motor vehicles continue to be duty free to encourage the development of a local assembly industry.
The Nigerian second-hand tariff with VAT, excise duty and import countervailing duty can be found here.
Import procedure
On 1 January 2006, the country introduced a Destination Inspection (DI) system.
Any person wishing to import physical goods into Nigeria must first have the so-called electronic 'M' form (Form M; Import application) validated by an approved bank via the Nigeria Single Window for Trade.
The fully completed e-Form M must be accompanied by the following:
- A detailed proforma invoice from the exporter
- Transport insurance certificate from an insurance company registered in Nigeria
- SONCAP product certificate or other import permits or certificates required for the goods issued by the relevant authorities
A validated e-Form M is required to apply for the foreign exchange needed for payment. It is valid for 360 days for trade goods and 720 days for capital goods. An extension is possible in any case upon request. Requests for extension must be addressed to the Director of Trade and Foreign Exchange, Central Bank of Nigeria.
The supporting documents must be clearly marked "valid for Forex / Not valid for Forex" depending on the situation.
All applications relating to goods subject to inspection at destination must be marked "BA" in the prefix of the numbering system of Form "M" and those exempted must be marked "CB".
The "M" form and the proforma invoice (valid for three months) must contain a clear description of the imported goods to facilitate price verification, including:
- The class designation of the product (type, category)
- The brand name, if applicable
- The name of the model and/or the reference number, if applicable
- A description of the characteristics, specificity, capacity, size, function, etc.
- The quantity and packaging
Documents relating to each import transaction must include the name of the product, country of origin, specifications, date of production, batch number and the standards to which the goods were manufactured. All goods to be imported into the country must be labelled in English in addition to any other transaction language, otherwise they will be confiscated.
Items subject to health or environmental restrictions (food, medicines, etc.) must have expiry or best-before dates and indicate the active ingredients, if applicable.
Since 2017, the required accompanying documents for customs clearance are the following eight accompanying documents, which must be presented in English:
- Freight documents (bill of lading or air waybill)
- Certificate of origin (instead of the previously required customs invoice C 16 / CCVO)
- Commercial Invoice
- Exit note
- Form M
- Packing list
- Customs declaration (Single Goods Declaration (SGD) / Customs Import Declaration)
- Product Certificate (SONCAP)
Depending on the commodity, additional certificates and attestations may be required under Nigerian regulations on prohibitions and restrictions, e.g. health certificates for agricultural products, certificates of analysis or manufacturer's certificates indicating the standards used in the manufacture of the goods.
Customs declaration
The customs declaration is an application for the clearance of goods for a specific customs procedure. It is submitted by the importer, who can also use a Nigerian customs agent with the appropriate licence. The customs declaration is submitted electronically via private or public so-called Direct Trader Inputs (DTI). DTIs are installed in the offices of importers and customs agents as well as in licensed cafés and are connected to the customs clearance system NICIS. Upon transmission of the fully completed customs declaration (SGD), an assessment notice is issued with the import duties to be paid. After confirmation of payment by the authorised bank, the importer can apply to Customs via the DTI for release of his consignment.
After registration of the validated e-Form M and receipt of all documents, Customs is instructed to prepare a Pre Arrival Assessment Report (PAAR) within six hours. This report indicates the nature and extent of the physical inspection to be carried out. The green channel means a direct release, the blue channel a subsequent check. The yellow channel requires a documentary check, the red channel a scanning or physical check of the goods. After successful inspection and release by customs, the importer can handle the goods without further restrictions.
Customs warehouse
Goods may be stored under customs supervision in public and private customs warehouses without import duties being levied before they are placed under a further customs procedure or released for free circulation. Under customs supervision, operations such as sorting, packing, repacking as well as processing (mixing of spirits, oils) can be carried out on the goods.
Refinement
The refinement procedure provides for a refund of duties paid following an approved application. Under the Manufacturer-In-Bond Scheme (MIBS), which requires authorisation, exporting producers can import raw materials and intermediate goods needed for production duty-free against a security provided by an approved bank or insurance company.
Duty-free zones, promotion of industry and investment
There are currently about 20 free zones and export processing zones in Nigeria. The supply of goods to the free zones for further processing, assembly and manufacture of finished goods is exempt from all import duties and taxes. Up to 100 per cent of the production manufactured there can be sold in the Nigerian customs territory after payment of import duties. Only the import duty applicable to the foreign input materials is levied. For more information, visit the Nigeria Export Processing Zones Authority (NEPZA) website.
To support economic diversification, the Nigerian government offers a number of incentives for certain industries (including assembly/installation), including tax incentives for companies. The central point of contact for potential investors is the government investment promotion agency Nigerian Investment Promotion Commission (NIPC).
Importing samples
The importation of samples can be made duty-free by depositing a bond or deposit in the amount of the duties due on the importation of the respective goods. The deposit will be cancelled and/or refunded when the samples are re-exported.
Import prohibitions Nigeria
Nigeria has import bans based on trade policy as well as general import bans. The list of trade-based import bans is revised frequently and currently includes the following product groups:
- live and dead birds including frozen poultry
- meat of pigs and beef
- Birds' eggs, except hatching eggs
- certain refined vegetable oils and fats, except refined linseed oil, castor oil and olive oil (crude vegetable oil may be imported)
- certain cane and beet sugars, chemically pure sucrose
- Certain cocoa products
- Pasta products
- Peeled tomatoes and tomato concentrate put up for retail sale
- Fruit juice in retail packings
- Tomato ketchup and other tomato sauces
- Waters, including mineral waters and aerated waters, whether or not containing added sugar or other sweetening matter or flavoured, other non-alcoholic beverages (not including health or energy drinks), beer and stout, whether bottled, canned or otherwise packaged
- Cement in bags
- Medicaments ex HS headings 3003 and 3004 such as paracetamol, chloroquine, vitamin tablets, aspirin, intravenous liquids (dextrose, saline)
- pharmaceutical waste
- mineral or chemical fertilisers containing two or three of the fertilising substances nitrogen, phosphorus and potassium, except organic fertilisers
- soaps and detergents in retail packaging
- mosquito repellent fumigators
- certain retreaded or used pneumatic tyres
- Corrugated paper and paperboard, boxes and cartons thereof, toilet paper, handkerchiefs, napkins and similar products, except babies' nappies, incontinence pads and exercise books
- Telephone recharge and voucher cards
- carpets
- Shoes, bags and suitcases - excluding safety, sports and canvas shoes and completely knocked down (ckd) and shoe parts
- hollow glass bottles with more than 150 ml content for beverages
- Used compressors and used air-conditioning, refrigeration and freezing equipment
- motor vehicles older than 15 years
- Ballpoint pens and parts, except ballpoint pen tips.
The list of goods whose importation is absolutely prohibited includes goods that may not be imported into Nigeria for the protection of public order, security, health and the environment. These include counterfeit and pirated goods, beads made of flammable celluloid or similar materials, blank tickets, betting slips, cowries, religiously and morally offensive material, matches with white phosphorus, expired and inedible foodstuffs, used clothing, hazardous waste and various spirits.
Export regulations - Export from the EU
EU export regulations state that all goods exported to a non-EU country must be cleared through customs.
Export from the EU - Restrictions
The cross-border movement of goods and services is principally free. However, restrictions are imposed on certain goods, countries or persons for various reasons. Special regulations may also apply to the movement of capital and payments.
Restrictions have been imposed on certain countries for foreign or security policy reasons, which in some cases significantly restrict economic trade with the country concerned.
Restrictions can generally be divided into 3 following embargo measures:
- Arms embargo - prohibits the export of military equipment to the country concerned, usually results from §§ 74 ff. Foreign Trade and Payments Ordinance (AWV)
- Partial embargo - certain prohibitions and restrictions on trade with the country concerned, regulated by EU regulations.
- Total embargo - prohibition of all economic transactions with the country concerned (currently non-existent), regulated by EU regulations.
None of these embargoes currently affect Nigeria. The list of affected countries can be found here.
In addition, the EU has taken measures to help combat terrorism and restrict economic transactions with persons considered responsible or liable for the political situation in an embargoed country.
These restrictions apply, amongst others, to ISIL (Da'esh), Al-Qaida, Taliban and other suspected terrorist individuals and entities, as well as individuals, groups and entities associated with them.
A list of the persons and entities concerned can be found here.
There are also restrictions and bans on the export of certain groups of goods. A list of the goods this affects can be found here.
Capital and payment transactions with foreign countries are also principally free. However, there are restrictions and reporting requirements in certain cases. More information on capital and payment transactions can be found here.
Export from the EU - Export duties
Export duties can be levied on the export of goods from the customs territory of the EU. Since it is usually in the EU's interest to export goods to third countries and thereby generate revenue, export duties are rarely levied. However, if world market prices for a product that is in short supply on the EU market are higher than the prices on the EU market itself, export duties are also levied to make exporting this product less attractive.
Export from the EU - EORI number
The EORI number (Economic Operators Registration and Identification number) is used to register and identify economic operators throughout the European Union.
If your company does not yet have an EORI number, you should apply for one particularly in good time before lodging a customs declaration or an entry or exit summary declaration for the first time.
Export from the EU - Customs concessions
For developing countries, the EU has developed a Generalised Scheme of Preferences (GSP). The aim is to focus tariff preferences on countries that are most in need of them. These include the least developed countries (LDCs) and countries that have no other preferential access to the EU market.
For the actual level of tariff preferences, the GSP scheme distinguishes between three groups of countries and territories. Nigeria is one of the so-called "other beneficiary countries" (OBCs). The list of OBC beneficiary countries can be found here.
Annex 2 of Regulation (EU) No 978/2012 lists the countries that are beneficiaries under the general GSP scheme. This includes Nigeria.
Goods originating in these countries and territories are classified as 'sensitive' or 'non-sensitive'. Non-sensitive goods are duty-free, with the exception of agricultural components. Sensitive goods are subject to a duty reduction (Art. 7).
The classification of the individual product groups can be found in Annex V of Regulation (EU) No 978/2012.
Export from the EU - Customs costs
The administrative action of the customs authorities is usually free of charge. However, if the customs authorities provide special services, they may charge fees or demand reimbursement of expenses on the basis of the Customs Costs Ordinance.
The following, for example, are subject to fees:
- Clearance outside the place of business or outside opening hours
- The storage of non-Union goods at the Customs office
- A necessary official act at an aerodrome which is not a customs aerodrome
- The official guarding and escorting of means of transport or goods
- The examination of goods in certain cases
- The making of photocopies.
Information on the amount of customs charges can be found here.
Information on the procedure for levying charges can be found here.
Export from the EU - Final export - normal procedure
The export procedure consists of two stages. The first stage is the opening of the export procedure at the customs office of export. You present the goods to the customs office responsible for your place of business. Presentation means that you have to inform the customs office about the presence of goods you want to export.
You must also submit an electronic export declaration for the goods presented. You can also be represented directly or indirectly. The customs office of export examines the electronic export declaration and the export goods to check the admissibility of the export. If the export is admissible, the customs office of export issues an export accompanying document (ABD) and releases the goods for export.
In the second stage, you present the goods at the customs office of exit, i.e. the customs office through which the goods are exported from the customs territory of the Community, and present the ABD. The customs office of exit checks whether the goods are identical to those listed in the ABD. If no irregularities are found, the customs office of exit releases the goods for exit and ends the export procedure.
Further information on procedural possibilities can be found here.
Export Nigeria - export bans
Maize, raw or sawn wood, raw hides and skins, including wet blue and unprocessed leather, scrap metal, unprocessed rubber, antiques, endangered species and their products and all imported goods may not be exported from Nigeria. The export ban on imported goods means that they cannot be imported duty-free into other ECOWAS countries.
Nigeria's trade agreements
Nigeria is party to various free trade agreements.
ECOWAS (Economic Community of West African States)
ECOWAS consists of 15 West African countries and aims to promote trade and economic cooperation within the member states.
The individual member states - with the exception of Liberia and Cape Verde - apply the ECOWAS Common External Tariff (CET) for the supply of goods from third countries.
Within ECOWAS, the Trade Liberalisation Scheme (TLS) provides for largely duty-free movement of goods originating in member states if accompanied by an ECOWAS certificate of origin from a nationally approved manufacturer. However, member countries do not consistently apply the lengthy two-step ETLS registration procedure for processed and industrial products, so that the free trade agreement is not fully implemented in practice.
AfCFTA (African Continental Free Trade Area)
Following ratification by the required 22 signatory states, the agreement officially entered into force on 30 May 2019. In the meantime, all AU member states except Eritrea have signed the AfCFTA framework agreement and around two-thirds of them have ratified it, including Nigeria in December 2020.
The stated aim of the agreement is to promote intra-African trade, advance industrialisation and build regional value chains. The long-term goal is a continental customs union and a single African market with free movement of goods, services and people. 90 percent of existing tariffs are to be abolished. The individual contracting states or regional organisations (RECs) that already form a free trade area or customs union can classify 7 percent of the total tariff lines as sensitive products. Their tariffs are to be eliminated within 10 years. Least developed countries are given 13 years to do so. For 3 percent of the tariff lines, tariffs will remain in place permanently. The start of the AfCFTA was the first of January 2021.
WTO
Nigeria is a founding member of the World Trade Organisation (WTO). Goods of Nigerian origin are granted tariff preferences in favour of developing countries under the EU's Generalised System of Preferences (GSP). The registered exporter (REX) procedure used there to prove preferential origin was introduced by Nigeria with effect from 21 March 2019.
AGOA
The US grants Nigeria preferences under the African Growth and Opportunity Act (AGOA) in addition to the Generalised System of Preferences (GSP). These unilaterally granted tariff concessions for 40 sub-Saharan African countries were extended in 2015 for another ten years until 2025. The list of AGOA products includes raw materials, industrial inputs, textile products and clothing.
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