Nigeria Customs Breaks 2024 Revenue Record, Faces Bigger Challenge in 2025

The Nigeria Customs Service (NCS) has defied expectations, surpassing its 2024 revenue target of N5.1 trillion well ahead of schedule. By the end of the fiscal year, the service had collected N6.1 trillion, exceeding its goal by N1.03 trillion—a 90.4% increase compared to the N3.2 trillion collected in 2023.

This milestone underscores the NCS’s crucial role in Nigeria’s economic framework, particularly in funding the 2025 national budget, tagged “Budget of Restoration: Securing Peace, Rebuilding Prosperity.” However, experts warn that meeting the new N6.58 trillion target in 2025 will be significantly more challenging due to economic uncertainties, fluctuating foreign exchange rates, and rising smuggling activities.

How Nigeria Customs Achieved a Historic Revenue Feat in 2024

1. Enhanced Trade Facilitation & Modernisation

In a bid to improve efficiency, the NCS implemented several digital transformation initiatives in 2024, including:

• Authorised Economic Operators (AEO) Programme: This initiative, officially launching in February 2025, is designed to streamline trade operations, reduce bottlenecks, and enhance supply chain security.
• Advance Ruling System: This mechanism provides traders with binding pre-import decisions on tariff classification, origin, and valuation of goods, improving transparency.
• Time Release Study: By analysing clearance time at ports and borders, this data-driven approach has helped identify bottlenecks and improve trade efficiency.
• B’Odogwu Unified Customs Management System: Developed with Trade Modernisation Project Ltd, this home-grown software aims to automate and digitalize customs operations, aligning with global best practices.

2. Aggressive Anti-Smuggling Operations

The NCS intensified its enforcement drive, recording:

• 3,555 seizures, including wildlife, arms, narcotics, and pharmaceuticals.
• Goods worth N28.46 billion (CIF value) and a total duty assessment of N6.83 billion.

This crackdown not only boosted revenue but also curbed illegal trade, protecting Nigeria’s economy from illicit activities.

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2025: A Tougher Year for Revenue Generation?

While the N6.58 trillion revenue target appears ambitious, several factors could pose challenges:

1. Unstable Foreign Exchange (FX) Rates

• In 2024, FX duty rates changed 70 times within six months, disrupting trade operations.
• Importers faced uncertainty, leading to reduced import volumes and higher market prices.
• Experts stress that stabilizing the naira is key to achieving the 2025 revenue target.

2. Persistent Smuggling & Revenue Leakages

• Smuggling remains a major threat to customs revenue.
• Corruption and non-compliance in the system contribute to significant revenue losses.
• Analysts recommend more stringent border control measures and enhanced collaboration with security agencies.

3. Economic Realities & Declining Purchasing Power

• With rising inflation and economic strain, businesses may reduce import activities, impacting customs revenue.
• Stakeholders argue that over-taxation should be avoided to prevent further economic downturn.

How the NCS Can Achieve the N6.58 Trillion Target in 2025

1. Full Implementation of the Trade Modernisation Project

• The B’Odogwu customs software must be fully operational to reduce manual processes, minimize corruption, and enhance efficiency.

2. Strengthened Stakeholder Engagement & Compliance

• The NCS should collaborate with traders, businesses, and international partners to ensure a seamless trade environment.
• Education campaigns on customs procedures and compliance could improve revenue collection.

3. Strategic Policy Adjustments

• Reviewing and stabilizing foreign exchange policies to encourage smoother trade.
• Implementing a more structured approach to import duties to prevent revenue losses.

Final Thoughts: Can Nigeria Customs Meet Its 2025 Target?

Despite a record-breaking 2024, 2025 presents a tougher challenge. With economic instability, fluctuating FX rates, and smuggling threats, achieving N6.58 trillion will require bold reforms, policy stability, and enhanced compliance measures.

However, if the NCS fully modernizes its operations, strengthens trade facilitation, and ensures a transparent system, it has the potential to not only meet but possibly exceed its 2025 revenue target.