Tariffs Increase Threaten Air Freight of ₦220bn Agro Exports from Nigeria

News in brief:

-FAAN raised cargo levy from ₦7/kg to ₦25/kg, increasing export costs for perishables.

-Exporters warn Nigeria risks pricing itself out of the global agro-export market.

Exporters have warned that the recent increase in cargo handling tariffs by the Federal Airports Authority of Nigeria (FAAN) could further undermine Nigeria’s agricultural exports, valued at about ₦220 billion.

The FAAN commenced the implementation of a revised cargo levy, raising charges from ₦7 per kilogramme to ₦25 per kilogramme, a move exporters say will worsen already high logistics costs and deepen rejection of Nigerian produce in international markets.

According to data from the National Bureau of Statistics (NBS), Nigeria exported agricultural produce by air, classified as perishables, worth approximately ₦220 billion in 2024. However, exporters say volumes have declined significantly due to rising freight costs, which have also pushed up retail prices in grocery stores abroad.

Exporters Warn of Loss of Competitiveness

Industry operators stated that the new FAAN tariff adds to existing charges imposed by airlines, cargo handling companies and other government agencies operating at Nigerian airports.

An exporter at the Cargo Terminal of the Murtala Muhammed International Airport, Lagos, who spoke anonymously to reporters, said cumulative levies had made Nigerian agricultural produce uncompetitive compared to similar exports from other countries.

“We are no longer competitive. Our banana, crayfish, palm oil, pepper and vegetables are organic, but the prices have increased sharply, making them unattractive in foreign markets,” the exporter said.

He disclosed that the cost of exporting produce had risen from about $3 per kilogramme to as high as $14 per kilogramme due to multiple levies.

“So, we are pricing ourselves out of the market. Our produce ends up costing more abroad than similar items from other countries,” he added.

Multiple Levies

The exporter listed additional charges imposed by logistics firms and government agencies, including DHL, Air France and other cargo airlines, handling companies, the Nigerian Customs Service, the Quarantine Service and security operatives.

According to him, the combined effect of these levies has forced exporters to scale down operations.

“If FAAN increases tariffs, it is the importer or exporter that pays. Clearing agents are not the ones suffering. FAAN, airlines and handling companies argue they want to generate revenue, but the ripple effect is higher prices and lower export volumes,” he said.

He explained that exporters were increasingly cutting shipment volumes, reducing consignments from 10 tonnes to about five tonnes to manage costs, a trend that directly reduces Nigeria’s presence in international markets.

Freight Agents Petition Security Agencies

Meanwhile, cargo agents operating at the Lagos airport have petitioned the Inspector General of Police, the Comptroller General of the Nigeria Customs Service, the Director-General of Civil Aviation and other security agencies over an alleged threat by FAAN to demolish their secretariats.

The affected associations include the National Association of Government Approved Freight Forwarders, the Association of Nigerian Licensed Customs Agents, the Africa Association of Professional Freight Forwarders and Logistics, and the National Association of Freight Forwarders and Consolidators.

The associations said the proposed demolition violates agreements reached with FAAN over 15 years ago, under which the secretariats were constructed.

They alleged that the threat was connected to their refusal to accept the new cargo tariff regime, which they described as unilateral and imposed without adequate stakeholder consultation.

The freight forwarders warned that higher tariffs would translate into increased costs for importers and exporters, with negative consequences for trade volumes, job creation and the broader economy.

They accused FAAN of “institutional blackmail” and called for an urgent review of the tariff increase to protect Nigeria’s export competitiveness.