PRESS BRIEFING ON THE 2008 – 2012 NIGERIA CUSTOMS AND EXCISE TARIFF BOOK

The purpose of this Press briefing is to inform the general public that the 2008–2012 Nigeria Customs and Excise Tariff Book has been approved by the Federal Government. However, before I go into the highlights of the 2008–2012 Tariff Book, let me give you brief background information about recent developments in tariff administration in Nigeria.

You may wish to recall that the ECOWAS Authority of Heads of State and Government at their meeting held at Niamey, Niger Republic on January 12, 2006 adopted the ECOWAS Common External Tariff (CET), with two exception lists (Type A and Type B) and a two–year transition period (January 2006–December 2007). While the products on the Type A list were to automatically collapse into the ECOWAS CET at the end of the transition period, negotiations were to be undertaken between ECOWAS member states under the auspices of the ECOWAS/UEMOA Joint Management Committee on the ECOWAS CET to harmonize their tariff on the Type B List.

The ECOWAS CET itself was to come into force by 1st January, 2008.  As part of the efforts of the Government of Nigeria to harmonize its tariff regime with the ECOWAS CET, the 2005 – 2006 Nigeria Customs and Excise Tariff Book was released on 1st October, 2005.  The 2005 – 2006 Tariff Book had 60% of its duty harmonized with the ECOWAS CET.  However, realizing the weak nature of the ECOWAS CET in providing protection for infant industry, Nigeria proposed a 5th band of 50% duty rate.  Thus, unlike the ECOWAS CET which has 4 tariff bands 0%, 5%, 10% and 20% duty rates), the Nigeria 2005 – 2006 Tariff Book had 5 Tariff bands namely 0%, 5%, 10%, 20% and 50% duty rates.  There was also a Type A Exception List which was to collapse into the ECOWAS CET which was scheduled to come into force on 1st January, 2008 and an Import and Export prohibition lists.  The 2005–2006 Tariff Book generated a lot of interest from the international community because it reduced Nigeria highest duty rate from 150% to 50%.

Negotiations on the Type B Exception List commenced in 2007 but reached a deadlock because of lack of consensus among ECOWAS member states, particularly those from UEMOA on Nigeria’s proposal for a 5th Band of 50% duty rate. Because of this deadlock ECOWAS member States could not harmonize their tariff regime during the transition period and consequently the ECOWAS CET could not come into force on 1st January, 2008. As a way forward, the ECOWAS Commission commissioned a study on the implications of the proposal for a 5th Band and the duty rate it should attract.
The 2008 – 2012 Tariff Book is a second attempt by Nigeria to harmonize its tariff regime with the ECOWAS CET.

FEATURES OF THE 2008 – 2012 TARIFF BOOK.
The 2008 – 2012 Nigeria Customs and Excise Tariff Book has the following features:

1. It is a five (5) year tariff regime covering 2008 – 2012.
2. There are five (5) Categories of Customs duties, namely:
   • Category 0 (0%): Necessities such as most educational materials, etc.
   • Category 1 (5%): for Primary raw materials.
   • Category 2 (10%): Intermediate products, e.g CKD refrigerators, CKD television,
   • Category 3 (20%): Finished goods that are not produced locally, and which require no protection, e.g. television, refrigerators, generators, etc.
   • Category 4 (35%): Finished goods that are manufactured locally and which therefore require some protection in the interest of promoting local industries.
3. A comparatively smaller import Prohibition List to consolidate Nigeria’s drive towards industrialization. The same goes for Export Prohibition List.
4. The new Book is in line with the World Customs Organization 2002 Harmonized commodity description and Coding System (HS) which has moved from 8 digits to 10 digits. This is to facilitate the separation of Codes where ambiguity exists. The book is now going in for publication.