Business

Customs set to replace multiple levies with single 4% charge —Adeniyi

Published

3 months ago

July 24, 2025

Advocate News Nigeria

Comptroller General (CG), Nigerian Customs Service (NCS), Bashir Adewale Adeniyi

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The Nigeria Customs Service says it will replace its seven percent collection fees from the federation account and one percent comprehensive import supervision scheme (CISS) with a 4 percent free on board (FOB) levy at the port.

The one percent CISS is a pre-shipment inspection fee, while the four percent FOB is a charge based on the value of imported goods, including transportation costs up to the loading port.

Adewale Adeniyi, the comptroller general of the service, spoke at a town hall meeting with stakeholders on the B’Odogwu clearance system in Lagos.

The high-level engagement, held in Ikeja, brought together importers, freight forwarders, shipping lines, terminal operators, banks and other financial institutions (OFI), and other critical stakeholders to discuss reforms aimed at improving trade compliance, clearance efficiency, and technological modernisation

On February 4, the NCS announced plans to implement a four percent charge on the FOB value of imports.

However, this plan was later suspended to allow for comprehensive stakeholder engagement and consultations regarding the implementation framework.

According to Adeniyi, the customs will use the four percent FOB levy to address concerns about the simultaneous collection of the 1 percent CISS fees and the seven percent customs collection fee from the federation account.

He told the stakeholders that there would be no extra charges after the 4 percent FOB as this would replace the 1 percent CISS and the seven percent they are collecting from the federation account.

The CGC said with the indigenously developed trade platform, the NCS had no choice but to re-introduce the levy to enhance its operational efficiency and fund the technology and modernisation programme of the service.

“The Unified Customs Management System (UCMS), popularly known as B’Odogwu, is a fully digital platform designed to streamline customs operations, eliminate bottlenecks, and promote transparency in Nigeria’s import and export systems,” Adeniyi said.

He also said that as the service is gradually migrating from the NICIS II platform to an indigenous trade platform, the new platform requires a lot of money to fund it to an international standard.

The CGS said aside from funding such technological evolution which requires a lot of money, the service has also invested heavily in the process.

Adeniyi, however, sought the support and understanding of stakeholders, saying that the introduction of the four percent FOB is inevitable if Nigeria is to enjoy the dividends of the new technological innovation as done in other countries.

“We have no choice in the payment of the four percent FOB because it is needed by the Customs to fund the huge technology and modernisation programme it has embarked upon,” he said.

“When we introduced this levy some months ago, we were asked to hold on and consult with our stakeholders.

“I am now telling you that we have no choice but to introduce the levy because technology does not come cheap and in a Yoruba parlance ‘ the soup that is sweet is as a result of money.”

‘NIGERIA MUST LEVERAGE WCO COUNCIL POSITION’

Adeniyi said now that he is the chairman of the WCO council, the Nigerian customs will use B’Odogwu to show the world that the service has the capacity and competence to develop its indigenous technology that will enhance its operations.

“Now it is going to be B’Odogwu to the world,” the comptroller-general said.

“Now that we have the WCO Council Chairmanship with us, let us use the opportunity to sell B’Odogwu to the world and tell them that we have the capacity and competence to develop our technology to enhance our operations and facilitate trade.”

Stakeholders welcomed the simplification of charges but raised concerns about delays in system transitions, particularly regarding bank processing and documentation.

Business

Naira hits 10-month high on strong FX inflows

Published

5 days ago

October 13, 2025

Advocate News Nigeria

Naira

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The naira extended its gains at the official market last week as it gained 0.72 per cent (or N10.5) to close at 1,455.17/$, the strongest it had been since December 2024, data from the Central Bank of Nigeria has revealed.

Analysts disclosed that the performance of the domestic currency was driven by robust foreign exchange inflows from portfolio investors and remittances.

At the parallel market, the naira strengthened 0.88 per cent to 1,475/$, also supported by improved liquidity.

The FX market had traded mixed through the week. It opened on a bearish note as early demand pressures caused by the exit of Foreign Portfolio Investors led to a dip. However, the market sentiments shifted midweek, buoyed by strong foreign inflows, particularly from FPIs sourcing naira to meet local fixed-income obligations.

AIICO Capital, in its outlook for the new week, said, “The naira is likely to remain stable in the near term, supported by improved US dollar supply and external reserves.”

Cowry Assets Management Limited, in a review of the FX market, said that it also noted that the local currency’s improvement was helped by better foreign exchange inflows, which reduced pressure on demand.

It maintained a positive outlook for the naira, saying, “We expect the naira to stay stable in the near term, supported by steady FX inflows and CBN interventions. However, rising import demand or weaker dollar inflows could slow further gains. Oil prices may remain under pressure due to higher supply, but any rebound in global demand could offer some support to Nigeria’s external earnings conditions, underpinning optimism for FX market stability; volatility in global oil markets may keep investor sentiment cautious.”

The external reserves also increased to $42.57bn, helped by higher inflows from oil sales, remittances, and portfolio investments. This steady rise in the external reserves gives the CBN more room to manage short-term pressures and supports expectations of naira stability in the near term.

In the past week, the naira got some cheery news that experts have said would further strengthen the liquidity in the market. The global index provider, FTSE Russell, in its September 2025 semi-annual country classification review for equities and fixed income, added Nigeria to the Watch List.

Explaining further, FTSE Russell said that the addition to the watchlist makes “possible reclassification from Unclassified to Frontier market status as the market meets the five FTSE Quality of Markets criteria required for attaining Frontier market status.”

Nigeria had been moved to the “Unclassified” category in September 2023 on the back of severe delays in foreign investors’ capital repatriation and FX transactions experienced by foreign investors as of that time.

However, recent policy reforms have improved FX liquidity, with market participants reporting no significant delays, prompting FTSE Russell’s decision. Now on the watchlist means Nigeria will be in a period of formal observation and engagement with market participants ahead of a potential upgrade in the next annual review cycle, expected in March 2026.

The analysts at Meristem Securities said, “This shift repositions Nigeria back on the investment radar for global funds that benchmark against the FTSE.

Frontier market index

Active funds will begin pre-positioning to capture the upside ahead of the formal re-entry, while passive funds will prepare for mandatory future allocations. This translates to potentially significant inflows of Foreign Portfolio Investment over the next year. In addition, this directly supports the Nigerian naira as anticipated capital inflows increase dollar supply, helping to sustain liquidity and stability in the FX market.

“In the short term, anticipation of fund flows is likely to fuel market optimism and price appreciation. However, long-term success depends on the Nigerian government’s commitment to sustaining a market-driven economy throughout this critical probationary period.” (PUNCH

Business

CBN sets new location rule for Opay, Moniepoint, PalmPay PoS Operators, mandates terminal tracking

Published

2 months ago

August 27, 2025

Advocate News Nigeria

PoS machines

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The Central Bank of Nigeria (CBN) has issued a sweeping directive that will shut down Point-of-Sale (PoS) devices used outside a merchant’s registered business address.

In a circular released on August 25, 2025, the apex bank ordered all licensed operators—including Moniepoint, OPay, PalmPay, and commercial banks—to geo-tag every PoS terminal in their network within 60 days.

This new policy means that the millions of PoS devices currently in circulation must now be registered with exact GPS coordinates indicating where each machine is being used.

CBN

According to the CBN, the measure is designed to curb fraud, prevent the use of cloned or “ghost” terminals, and make it easier to track transactions in real time.

The regulator further explained that all existing PoS machines must be upgraded with built-in GPS systems and connected to the National Central Switch, which will monitor their locations through a special software development kit (SDK).

Under the new rule, merchants will only be allowed to process payments within a 10-metre radius of their registered business address. Any terminal that is not geo-tagged before the deadline will be deactivated.

The directive also covers newly deployed devices, which must be geo-tagged before they can be activated. Responsibility for ensuring compliance will fall on operators such as Payment Terminal Service Providers (PTSPs) and mobile money companies.

The CBN stressed that the initiative aims to reduce fraud and eliminate unauthorised PoS activities by ensuring that every device’s location is verified and continuously monitored.

Compliance checks will commence on October 20, 2025, giving operators just two months to upgrade what could amount to more than 4 million active PoS terminals across the country.

The growth of Nigeria’s PoS industry partly explains the new restrictions. As of 2023, the country had 1.5 million registered PoS agents—equivalent to one agent for every 80 people. A recent Bloomberg report also highlighted the density of operators, noting there are as many as 1,600 PoS terminals per square kilometre.

This surge in adoption is one of the main reasons the CBN has introduced tougher oversight rules.

In 2024, the apex bank mandated that all PoS transactions be routed through licensed Payment Terminal Service Aggregators (PTSA) to boost transparency. That same year, operators were required to register their devices with the Corporate Affairs Commission (CAC).

The latest geo-tagging directive, analysts say, underscores the CBN’s determination to tighten its grip on Nigeria’s booming PoS industry while clamping down on fraud and unauthorised usage.

Business

Mainpower petitions EERC, rejects tariff reduction

Published

2 months ago

August 21, 2025

Advocate News Nigeria

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The Mainpower Electricity Distribution Company, has filed a formal petition before the Enugu Electricity Regulatory Commission (EERC), demanding immediate suspension of its new tariff order pending the hearing/determination of its petition.

The Spokesman of Mainpower, Mr Emeka Ezeh, in a statement on Wednesday in Enugu, said that the petition, dated August 14, 2025, was a fallout of the new tariff reduction order by the EERC.

Ezeh said that the new tariff reduction order by the EERC took effect from August 1, 2025.

It would be recalled that the EERC had in the said order, reduced tariff for Band A customers from N209/kwh to N160.40/kwh, while freezing Bands B-C.

The latest development was roundly condemned by both the National Electricity Regulatory Commission (NERC), the Generation Companies (Gencos), other Distribution Companies (Discos) as well as the Federal Ministry of Power.

The spokesman said that all the stakeholders had described the tariff reduction order as unsustainable, urging the EERC to put a halt to it, but the Commission “doubled down”.

“Mainpower has now approached the Commission formally, seeking an immediate suspension of the order pending the hearing and determination of its petition.

“The petition, supported with a four-paragraph affidavit, was signed by Dr. Ernest Mupwaya, Managing Director/CEO, Mainpower Electricity Distribution Limited.

“It is expressly asking for ‘a review of order No. EERC/2025/003: Tariff Order for Mainpower Electricity Distribution Limited 2025’, to avoid loss of revenue due to downward review of tariff.”

He said that the EERC is the sole-respondent to the petition, which was brought pursuant To Section 36 of the Constitution of the Federal Republic of Nigeria, 1999 (As Amended).

“Also in pursuant of Sections 11,12, 13, 20, 21, 33, 34 and 35 of the Enugu State Electricity Regulatory Commission Regulation (Regulation No. EERC-R-001, Business Rules).

“Regulation, 2024, Section 4.1.(C) & Schedule 1 of Regulation No. EERC/R004: Enugu State Regulatory Commission: Methodology for Tariff Regulation, 2024 and Under the inherent jurisdiction of the Commission.

“Mainpower stated in the petition that the tariff order published by the Respondent on Friday, July 18, 2025, for the Disco was not agreed by the parties

“The same did not comply with the Regulation No. EERC/R004: Enugu State Regulatory Commission: Methodology for Tariff Regulation, 2024 (Methodology for Tariff),” he said.

According to him, the petitioner averred that Section 4.1(c) provides that: “In order to avoid ‘Gold-Plating’ in the tariff using rate of return regulation, the licensee shall be required to review cost with the Commission.

He said, “It is the cost agreed with the Commission that shall be allowed for the operator to use in the tariff model for the determination of price that shall apply in contracts.

“This is because the value chain of electricity business in Enugu State shall be subject to contracts and prices shall be determined based on the applicable methodology published by the Commission in its website. (d) The review process for the cost shall be as prescribed in the Schedules to these Regulations”.

“It went further to state that ‘The Methodology for Tariff further provided in Schedule 1 thereof that: “Where the Commission does not reach an agreement on cost with the applicant within the twenty-one (21) days, the Commission shall subject the process to a formal hearing as stipulated in the Commission’s Business Rules.

“The Petitioner stated that after submission of the required data by the Petitioner, the Respondent invited the Petitioner to a 3-day engagement meeting to agree on the various parameters for the tariff via its letter with Ref. No. EERC/CO/2025/0086 dated 30th June, 2025 for engagements on 2nd to 4th July, 2025.”

The spokesman said that the petitioner (mainpower) disclosed that it never came to an agreement with the Respondent on certain key parameters with huge sensitivity effect.

“The Petitioner further revealed that during the engagement meetings from 2nd to 4th July, 2025, and at the end of the engagement meeting on the 4th July, 2025, the understanding with Respondent was that the process as enunciated in the Methodology of Tariff would be followed.

“And that both parties would reach an agreement on the said parameters mentioned above or hold a formal hearing as provided in Schedule 1 of the Methodology of Tariff.

“The Petitioner was surprised that the Respondent without agreement on these important and tariff-sensitive parameters proceeded to conclude the tariffs and publish the Tariff Order on Friday, 18th July, 2025.

“The Petitioner states that despite the incident mentioned in paragraph 9 above, it further engaged the Respondent and parties agreed to have a meeting on 25th July, 2025 to address the concerns of the Petitioner especially as this will threaten the Vesting Contract arrangement between the Petitioner’s Holding Company, Enugu Electricity Distribution Plc (EEDC) and Nigerian Bulk Electricity Trading Plc. (NBET) from where Petitioner receives its supply of electricity.

“After the presentations by the Petitioner on that 25th July, 2025, the Respondent reverted via a letter with Ref. No. EERC/CO/2025/0105 dated 30th July, 2025 but received via email on Thursday, July 31, 2025 at 3p.m. maintaining the implementation of the Tariff Order on 1st August, 2025. We shall found on the copy of the email sent by the Commission and the Presentation to the Commission made on 25th July, 2025,” he said.

While urging that the tariff order be reserved, the petitioner (Mainpower) stated that if implemented, it would cause irreversible adverse business impact on it.

Ezeh outlined some of the impacts to Mainpower, which included: “Financial Impact (Aug – Dec 2025): The tariff creates an average monthly revenue shortfall of between N1.3 billion and N1.5 billion, resulting in a cumulative gap of about N6.98 billion over five months.

He said that compliance with NBET and Market Operator (MO) settlement obligations is expected to drop significantly, from current levels of about 97 per cent to an estimated 81 per cent by the end of 2025. The outcome is a business sustainability risk.

“Disconnection of Supply to MainPower: The electricity supplied to the Enugu State Electricity Market flows from the Vesting Contract entered into between EEDC and NBET which tariff as approved by NERC is N209/kwh for Band A whilst the Bands B to C is N67/kwh.

“If Mainpower is not able to meet up with its remittances obligation which in turn affects that of EEDC, this will inevitably lead to the Disconnection of the Supply to Mainpower.

“Investment Impact: MainPower’s planned capital expenditure programme, valued at N33.2 billion and covering network expansion, feeder automation, and the installation of 350,000 smart meters, is at risk under the new tariff.

“If metering rollout is halted, over 42% of customers will remain unmetered beyond Q1 2026, perpetuating inefficiencies and revenue leakages.

“Operational Impact: Reduced funding will limit the company’s ability to maintain and repair critical infrastructure, increasing the likelihood of outages and customer complaints. Additionally, dissatisfaction with service levels is expected to drive more customers toward self-generation, further eroding revenue.

“Strategic and Reputational Impact: The undervaluation of MainPower’s asset base weakens the company’s balance sheet and reduces investor confidence, directly impacting its ability to attract capital for future projects.

“There is also a heightened risk of industrial action if the company struggles to meet payroll and vendor obligations, potentially damaging its reputation and operational stability

Ezeh said that Mainpower prayed for an order of the Commission suspending the application of the Tariff Order pending the determination of its case, as well as an order of the Commission for a review to approve either Scenario 1 of N206.80/Kwh or Scenario 2 of N194.54/Kwh as contained in its petition.