Nigeria’s N34 Trillion Import Duty Waivers Trigger Calls for Probe as Economists Warn of Revenue Risks

Nigeria’s import duty waiver policy has come under renewed scrutiny after the Nigeria Customs Service (NCS) disclosed that import duty exemption certificates approved by the Federal Government reached an estimated N34 trillion in 2025—a figure that has sparked concerns over fiscal sustainability, transparency, and public accountability.

The disclosure has prompted economists and financial experts to question whether the country’s generous import incentives are delivering measurable economic benefits or creating significant revenue leakages at a time when government finances remain under pressure.

Customs reveals scale of duty exemptions

The figures were made public by the Comptroller-General of the Nigeria Customs Service, Bashir Adeniyi, during an investigative hearing before the Senate Committee on Finance.

According to the Customs chief, import duty exemptions issued through Import Duty Exemption Certificates (IDECs) covered several strategic sectors and government priorities. While the policy was designed to support national development and security, it also significantly reduced potential customs revenue.

Adeniyi explained that approximately 60 percent of the approved exemptions were linked to the importation of military hardware, reflecting Nigeria’s ongoing security challenges.

Other sectors benefiting from the waivers included:

• Compressed Natural Gas (CNG) projects
• Electric and hybrid vehicles
• Medical equipment and healthcare supplies
• Industrial machinery and manufacturing inputs
• Food import intervention programmes

He noted that although such fiscal incentives serve important government objectives, they inevitably reduce the revenue available to the Nigeria Customs Service.

How the figures compare

The scale of the exemptions has raised eyebrows because of how they compare with Nigeria’s broader fiscal position.

According to Customs data:

• Import duty waivers approved in 2025: N34 trillion
• Nigeria Customs revenue generated in 2025: N7.28 trillion
• Nigeria’s 2025 national budget: N54.99 trillion

This means the estimated value of duty exemptions was more than four times the revenue collected by Customs during the same period and represented roughly 62 percent of the country’s 2025 budget.

While duty waivers do not necessarily represent cash that was physically collected and then lost, they reflect revenue the government chose to forgo as part of its fiscal and economic policies.

Experts demand greater transparency

Economic analysts say the size of the exemptions makes stronger oversight essential.

Professor Godwin Oyedokun, an accounting and finance expert at Lead City University, argued that import duty waivers are internationally recognised economic policy tools capable of attracting investment, supporting industrialisation and encouraging growth in strategic sectors.

However, he stressed that governments must demonstrate that such incentives produce measurable returns.

According to him, if Nigeria forgave customs duties worth N34 trillion, authorities should provide evidence that the policy resulted in:

• Higher industrial output
• Increased employment
• Stronger exports
• Sustainable economic growth
• Improved investment performance

Without clear evidence, he warned, the country risks sacrificing substantial public revenue without achieving the intended economic objectives.

Concerns over fiscal pressure

Experts also cautioned that reduced customs revenue could have wider implications for Nigeria’s public finances.

Lower government income may:

• Increase budget deficits
• Raise borrowing requirements
• Reduce available funding for education
• Limit healthcare spending
• Delay infrastructure development
• Affect national security financing

Economists further warned that poorly managed waiver programmes could distort competition if some businesses receive preferential treatment without clear economic justification.

Calls for investigation

Investment analyst Gbolade Idakolo, Chief Executive Officer of SD & D Capital Management, described the reported figure as alarming and urged authorities to investigate whether weaknesses in the waiver system have contributed to revenue leakages.

According to him, import waivers remain legitimate trade policy instruments when properly administered. However, if they become channels for abuse or corruption, they undermine public finances and weaken confidence in fiscal management.

He also argued that a sum equivalent to N34 trillion could have significantly eased pressure on government finances and reduced the need for additional borrowing if it had been available for budget implementation.

Why import duty waivers exist

Import duty exemptions are commonly used worldwide to encourage investment in sectors considered vital to national development.

Governments often grant such incentives to:

• Support manufacturing
• Encourage renewable energy adoption
• Improve healthcare access
• Promote technological development
• Strengthen food security
• Address national emergencies
• Enhance defence capabilities

The effectiveness of these policies, however, depends on strong monitoring systems that ensure beneficiaries deliver the expected economic outcomes.

Why this matters

Nigeria continues to face growing fiscal challenges, including high public debt, rising infrastructure needs, inflationary pressures and increasing demands for social spending.

As government agencies seek to expand non-oil revenue, the debate over import duty exemptions is likely to intensify.

The Senate’s ongoing review may determine whether current waiver policies require tighter oversight, greater transparency or broader reforms to ensure public revenue is protected while maintaining incentives for strategic economic sectors.

Whether future investigations uncover administrative weaknesses or confirm that the incentives achieved their intended objectives, the findings could influence Nigeria’s fiscal policy and customs administration in the years ahead.