The World Bank says Nigeria could boost its customs revenue by 66 percent if the federal government eliminates arbitrary tariff deviations and import bans.
In its Nigeria Development Update (May 2025 edition), the World Bank warned that current trade policies distort prices, petrol smuggling, and weaken customs enforcement, ultimately costing the country billions in lost revenue.
The report also linked the tariff policy to lost government revenue, noting that high tariffs and import bans contribute to evasion and reduce customs collections.
World Bank noted that the deviations push consumer prices up, encourage smuggling, and weaken customs enforcement.
“Lifting them could increase current customs revenues by 66 percent, contributing to the ongoing fiscal adjustment,” the report said.
“The government should consider seizing the opportunity created by the market-reflective, competitive exchange rate to reorient trade policy for growth and jobs.
“Nigeria maintains higher-than-average tariffs on many products, bans the imports of others, and imposes many non-tariff barriers. The average tariff rate in the country is twice as high as the sub-Saharan average.”
The Bretton Woods institution said that with the naira now more competitive, domestic producers are better positioned to compete with imports and take advantage of export markets.
“To produce more and export more competitively, Nigerian firms also need to import, including intermediate goods and services,” the report added.
The bank advised the federal government to align tariffs with the ECOWAS CET and start with food items, given their direct impact on household welfare.
SOURCE: thecable.ng
