The revelation by the Comptroller-General of the Nigeria Customs Service, Bashir Adeniyi, that approvals under the Import Duty Exemption Certificate scheme reached about N34 trillion in 2025 has sent shockwaves through Nigeria’s fiscal policy landscape. It should.
At a time when the country is struggling to generate enough revenue to finance development, service a mounting debt burden and fund critical infrastructure, no figure of such magnitude can be glossed over.
Before Nigerians rush to judgement, however, the government owes the public one critical clarification: What exactly is the N34 trillion?
Does it represent the total value of imports granted duty waivers in 2025? Is it the actual customs duties forgone? Or was the Comptroller-General referring to cumulative IDEC approvals since the scheme was introduced in March 2020?
If the N34 trillion represents the value of imports covered by waivers, the actual revenue forgone would be only a fraction of that amount because customs duties are charged at varying tariff rates.
But if it represents customs duties waived, then Nigeria effectively surrendered revenue equivalent to almost 62 per cent of the N54.99 trillion 2025 budget, nearly five times the N7.28 trillion Customs collected in 2025, and more than the N28.83 trillion generated by the Nigeria Revenue Service from taxes and core federation revenue in the same fiscal year. Such an extraordinary concession would demand immediate explanation.
The issue assumes greater significance because Nigeria’s public finances remain under severe pressure. Despite painful reforms, the Federal Government still depends heavily on borrowing to finance its budget.
Debt servicing, including sinking funds, consumed N12.63 trillion, or about 67 per cent of federally retained revenue in 2025.
Capital expenditure also suffered from inadequate funding, with about 70 per cent of the 2025 capital budget rolled over into 2026 after releases to MDAs amounted to only N3.10 trillion.
This is hardly the fiscal environment in which trillions of naira can be casually surrendered.
To his credit, Adeniyi did not portray the waiver regime as an unqualified success. He acknowledged that it significantly constrains Customs’ revenue-generating capacity while explaining the rationale behind the concessions.
According to him, about 60 per cent of the IDEC approvals, about N20.4 trillion, related to military hardware, which understandably attracted duty exemptions because of Nigeria’s security challenges.
Other waivers covered compressed natural gas equipment, electric and hybrid vehicles, healthcare equipment and medical supplies, industrial machinery, manufacturing inputs and food intervention programmes.
These are, on the face of it, legitimate policy objectives.
No reasonable person would advocate imposing customs duties on military equipment procured to fight insurgency, terrorism and banditry. In practical terms, the government would merely be taxing itself.
Likewise, carefully targeted concessions on pharmaceutical products, medical equipment and productive manufacturing inputs can support industrialisation, improve healthcare delivery and moderate inflation.
Indeed, import duty waivers are recognised fiscal instruments globally. Governments use them to encourage investment, support strategic industries or respond to national emergencies.
However, noble objectives cannot substitute for accountability.
Nigeria’s history with import duty waivers has been anything but reassuring. Over the years, successive administrations have faced allegations that politically connected businesses secured concessions unavailable to genuine manufacturers.
Some beneficiaries reportedly imported quantities far beyond approved limits. Others, including some mega churches, were accused of diverting duty-free imports into commercial markets instead of using them for approved purposes.
There have also been persistent reports of deliberate product misclassification, with finished consumer goods falsely declared as industrial inputs or relief materials to evade customs duties.
These concerns have repeatedly featured in legislative investigations, audit reports and public policy debates.
It is therefore encouraging that both chambers of the National Assembly have moved swiftly.
The Senate Committee on Finance has begun interrogating the implications of the N34 trillion figure, while the House of Representatives Committee on Finance has demanded a detailed breakdown of all beneficiaries, the legal basis for each waiver and the purposes they were intended to serve.
Fiscal incentives should never operate behind a veil of secrecy. Every waiver represents public revenue deliberately forgone.
Nigerians, therefore, have every right to know who benefited, the value of imports involved, the duties exempted, the legal authority under which each approval was granted and, most importantly, the economic benefits eventually delivered.
However, transparency should not depend only on legislative investigations. It should be institutionalised. The Federal Ministry of Finance and the Nigeria Customs Service should publish an annual register of all duty waivers, identifying beneficiaries, import values, duties forgone, implementation timelines and independent assessments of outcomes.
Only then can Nigerians determine whether these concessions genuinely serve the national interest or merely reward a privileged few.
The concerns expressed by economists also deserve attention. Accounting and finance scholar Godwin Oyedokun argued that if the government indeed forgoes revenue on this scale, it must demonstrate corresponding gains in industrial output, employment, exports and economic growth.
Financial analyst Gbolade Idakolo similarly warned that poorly supervised waivers can become channels for corruption and revenue leakages. These warnings cannot be dismissed.
Nigeria’s tax-to-GDP ratio, at about 13.5 per cent, remains below the sub-Saharan African average of roughly 16 to 17 per cent.
Revenue mobilisation continues to lag behind the country’s enormous expenditure needs in education, healthcare, roads, power infrastructure and security. Every naira deliberately surrendered through fiscal incentives must therefore produce measurable economic returns.
Also concerning is the fact that import duty waivers, if poorly designed, distort markets. By conferring preferential treatment on selected importers, they create unfair competitive advantages, weaken businesses paying normal duties and sometimes discourage domestic production. Rather than stimulating industrial development, they can entrench dependence on imports.
The current waiver policy on electric vehicles highlights this contradiction. While promoting cleaner transportation is commendable, Nigeria remains overwhelmingly a market for used vehicles. Most Nigerians cannot afford brand-new electric vehicles even after duty concessions. Consequently, the principal beneficiaries are likely to be a relatively small, affluent class.
A more strategic policy would channel incentives towards domestic automobile manufacturers and assembly plants willing to develop local electric vehicle production.
Supporting indigenous manufacturing, technology transfer and local component production would create jobs, deepen industrial capacity and reduce long-term dependence on imports.
More fundamentally, duty waivers should never become permanent fiscal policy. Every concession should carry clear performance benchmarks, defined timelines and mandatory reviews.
Waivers granted to pharmaceutical companies, manufacturers and food importers should translate into lower prices, higher production and more jobs. Where such outcomes fail to materialise, the concessions should lapse automatically.
In many cases, lower tariffs rather than outright exemptions would strike a better balance.
Reduced duties would still support manufacturers while ensuring the government earns at least some revenue. Complete exemptions should remain exceptional, reserved mainly for military procurement, where the government would otherwise merely tax its own security operations.
Nigeria cannot continue to borrow with one hand while surrendering revenue indiscriminately with the other.
The controversy surrounding the N34 trillion figure presents an opportunity to reform the country’s waiver regime. Customs must clarify precisely what the figure represents.
The Ministry of Finance should institutionalise full disclosure of all waivers. Independent cost-benefit evaluations should become mandatory.
Parliament should intensify oversight, while the Auditor-General periodically examines whether beneficiaries fulfilled the conditions attached to their concessions.
Import duty waivers are neither inherently good nor bad. They are instruments of economic policy whose legitimacy depends entirely on transparency, accountability and measurable outcomes.
The Senate and the House of Representatives are, therefore, right to probe the regime more deeply. Their investigations must go beyond establishing what the N34 trillion represents. They should determine whether Nigeria’s duty waiver policy remains economically justifiable, fiscally sustainable and transparently administered.
At a time when every naira must count, fiscal generosity without transparency is a luxury Nigeria cannot afford.
