World Bank: Nigeria Could Boost Customs Revenue by 66% by Ending Import Bans
Nigeria stands to increase its customs revenue by a staggering 66% if it eliminates arbitrary tariff deviations and lifts import bans, the World Bank has revealed in its latest Nigeria Development Update released this May.
The report delivers a stark warning: current trade policies are distorting market prices, fueling petrol smuggling, weakening customs enforcement, and costing the country billions in potential revenue.
According to the World Bank, Nigeria’s reliance on high tariffs, import bans, and numerous non-tariff barriers is backfiring. Rather than protecting local industry, these measures are encouraging evasion, driving up consumer prices, and suppressing customs collections.
“Lifting these restrictions could significantly boost customs revenues, contributing to the federal government’s broader fiscal reforms,” the report stated. “The current environment—marked by a more competitive, market-reflective exchange rate—offers an ideal moment for Nigeria to reorient its trade policies toward growth and job creation.”
Nigeria currently imposes tariffs that are, on average, twice as high as those in the rest of sub-Saharan Africa. In addition to outright bans on certain imports, the country enforces several non-tariff barriers, making trade both expensive and unpredictable.
The World Bank argues that these restrictions are not just bad economics—they’re also hurting ordinary Nigerians.
“Import bans drive prices up by an average of 5.8%, particularly for essential goods such as food and medicine,” the report noted. “This disproportionately affects lower-income households. Lifting import bans alone could reduce poverty rates by up to 2.6 percentage points.”
The report also highlights how trade restrictions have unintentionally fueled smuggling across Nigeria’s porous borders, especially for subsidised petrol. This not only undermines legitimate businesses but also weakens customs enforcement capacity.
With the naira now trading at a more competitive rate, the World Bank says Nigerian producers are better positioned to compete with foreign imports and tap into export markets. But to scale up production and compete globally, they must also be able to import key intermediate goods and services.
The World Bank urged the Nigerian government to align its tariff structure with the ECOWAS Common External Tariff (CET), starting with essential food items that directly affect household welfare. The CET mandates a unified customs duty policy across West African states, streamlining trade and improving predictability for businesses.
The World Bank’s recommendations echo recent criticisms from the United States Trade Representative (USTR), which condemned Nigeria’s import ban on 25 items for restricting market access to American exporters.
Despite these concerns, Nigeria Customs Service (NCS) reported strong revenue figures in Q1 2025. Comptroller-General Adewale Adeniyi announced collections totaling N1.75 trillion—surpassing its quarterly benchmark of N1.65 trillion and marking a 29.96% increase from the N1.35 trillion collected during the same period in 2024.
Still, the World Bank believes these numbers could rise dramatically with the right policy reforms.
