Nigeria Faces Economic Squeeze as Tariffs, Charges Skyrocket Across Multiple Sectors

By Emmanuel Kwada

In a concerning trend that has left many Nigerians reeling, tariffs across various sectors have seen significant increases, exacerbating the financial strain on households and businesses alike.

Citizens are awakening to a harsh reality as a series of tariff increases hit essential services, from telecommunications to banking and importation. The latest batch of hikes has added to the burdens already being felt by millions of Nigerians, amplifying concerns about inflation and economic stability.

An Abuja resident, Barr Morris, expressed his frustration, saying, “The truth is, these companies are losing money and finding it difficult to operate in this harsh economy, which is why some are leaving, citing Lafarge and others that have already left.” He added that the struggling companies that remained in the country have no choice but to increase their tariffs to stay afloat or risk being grounded by the economy.

Tariffs are increasing everywhere, and there’s no consideration for citizens’ income

Morris blamed the government’s bad policies, stating, “Tariffs are increasing everywhere, and there’s no consideration for citizens’ income. People are losing jobs daily, and the cost of living is skyrocketing. We can’t blame the companies because they’re operating for profit, not as NGOs.” He concluded that the government should re-examine its policies to find solutions.

Another resident, Abdullahi Umar, a telecommunications vendor in Mararaba, shared similar sentiments, saying, “I’m not surprised because the president said during his campaign that he would reduce Nigerians’ purchasing power and increase taxes, which is exactly what’s happening now – tax, tax, tax, and more tax. We’re in for a long ride, and only God can deliver us.”

A visit to the popular Heart Plaza in Mararaba revealed a sense of hopelessness among telecommunications vendors and their customers, who are struggling to come to terms with the hike in tariffs from all angles.

I’m not surprised because the president said during his campaign that he would reduce Nigerians’ purchasing power and increase taxes

MTN’s Data Tariff Hike: A Crushing Blow to Nigerians’ Pockets

MTN, one of Nigeria’s leading telecommunications companies, has implemented a significant increase in its data tariffs, leaving millions of Nigerians reeling from the impact. The latest development has seen the cost of 15GB of data skyrocket to a staggering N6,000, representing a whopping 20% hike from the previous price of N5,000. Furthermore, call tariffs have also been increased, dealing a double blow to Nigerians who are already struggling to make ends meet.

Apology letter shared by MTN Nigeria on their X

The implications of this hike are far-reaching, with over 100 million Nigerians relying on MTN for their telecommunications needs.

Forgive and forget in the spirit of the love season

In a surprising turn of events, MTN Nigeria has since made a U-turn, reversing its 200% data bundle tariff hike, which was initially introduced on Tuesday. The company took to its official X account on Thursday to announce the reversal, apologizing to Nigerians for the hike. In a statement, MTN acknowledged the upset caused by the increase, stating, “We know how upsetting it must have been to suddenly wake up to a 200 percent increase on your favourite digital bundle.” The company attributed the hike to a “mistake” and urged subscribers to “forgive and forget” in the spirit of the love season.

This increase comes on the heels of the Nigerian Communications Commission’s (NCC) decision to grant approval for telecommunications companies to raise their tariffs, with a limit set at 50%. It is likely that other telecommunications companies will follow suit, further exacerbating the burden on Nigerian consumers. As the telecommunications giant, MTN, has shown, even a reversal of the hike may not be enough to alleviate the suffering of Nigerians, who are already shouldering the weight of a struggling economy.

Customs’ 4% Administrative Charge

The Nigerian Customs authority’s decision to add a 4% administrative charge on the Free On Board (FOB) value of imports has been met with significant backlash. This move was expected to increase the cost of imports, ultimately passing the burden on to consumers, and generating an additional N400 billion in revenue for the government.

Comptroller General of Customs, BA. Adeniyi. Credit Souq News Television. 

However, after an outcry from Nigerians, the Nigerian Customs Service has made a U-turn and suspended the administrative tax, as announced on Tuesday evening, according to the federal government. This suspension is a welcome relief for Nigerians, who are already struggling to make ends meet, and for business owners like Emeka, an electronic seller, who lamented the impact of the charge on his sales.

NPA’s 15% Port Charge Hike

The Nigerian Ports Authority (NPA) has increased port charges by a whopping 15%. This move is expected to have a devastating impact on businesses that rely on imports, as it will increase their operational costs significantly. According to the NPA, the new port charges will generate an additional N50 billion in revenue for the government. However, it will also lead to a significant increase in the cost of doing business in Nigeria, which may force some companies to relocate to neighboring countries.

NPA Toll Gate Apapa, Lagos. Credit: Sahara Reporters 

CBN’s ATM Charges: A New Burden on Nigerians

The Central Bank of Nigeria (CBN) is set to introduce new charges for ATM transactions, starting March 1, 2025. The charges include:

1. Off-site ATM: N100 charge, plus a surcharge of not more than N500 per N20,000 withdrawal.
2. On-site ATM: N100 per N20,000 withdrawal.

These charges are expected to generate an additional N10 billion in revenue for banks, but they will also increase the cost of accessing cash for Nigerians. With over 50 million Nigerians using ATMs regularly, this move is expected to have a significant impact on their finances.

They will also increase the cost of accessing cash for Nigerians

The Consequences of Nigeria’s Tariff and Charge Hikes

The cumulative effect of these tariff and charge hikes is expected to be devastating for the Nigerian economy. With inflation already standing at over 20%, these increases are expected to push the rate even higher. According to statistics, every 1% increase in inflation reduces the purchasing power of Nigerians by 2%. Therefore, the current tariff and charge hikes are expected to reduce the purchasing power of Nigerians by over 10% in the next quarter.

Government must take urgent action to review these hikes and find alternative solutions to address the country’s economic challenges

Furthermore, the diversion of imported cargos to neighboring countries is expected to lead to a significant loss of revenue for the Nigerian government. With the country’s import bill standing at over N10 trillion in 2024, a 10% diversion of imports to neighboring countries will result in a loss of over N1 trillion in revenue.

In conclusion, the Nigerian economy is facing a perfect storm of tariff and charge hikes, which are expected to have a devastating impact on citizens and businesses. The government must take urgent action to review these hikes and find alternative solutions to address the country’s economic challenges. Failure to do so may lead to a complete collapse of the economy, with dire consequences for Nigerians.

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