Nigeria Customs AEO Programme Generates ₦1.585 Trillion as Compliance Drives 85.66% Duty Increase
Nigeria's Customs Service reports ₦362.79 billion revenue growth under its Authorized Economic Operator programme, with customs duties rising 85.66% following enhanced compliance measures and increased legitimate trade volumes.
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Nigeria's Customs Service has recorded ₦1.585 trillion in revenue under its Authorized Economic Operator (AEO) programme, representing a ₦362.79 billion increase from the ₦1.222 trillion collected before certification, according to data released by the agency on Thursday.
The revenue surge marks an 85.66 percent increase in customs duties paid, driven by enhanced compliance mechanisms and expanded volumes of legitimate trade flowing through certified operators. The AEO programme, designed to facilitate trade for compliant businesses while strengthening border security, has emerged as a significant revenue driver for Africa's largest economy as it seeks to diversify income sources beyond oil exports.
Compliance Framework Delivers Revenue Gains
The Authorized Economic Operator certification programme grants preferential treatment to businesses demonstrating high levels of compliance with customs regulations, supply chain security, and financial solvency. According to Nairametrics, collections under the programme climbed from ₦1.222 trillion before certification to ₦1.585 trillion after certification, reflecting improved declaration accuracy and reduced smuggling through certified channels.
The 85.66 percent growth in customs duties represents one of the steepest increases in Nigeria's trade facilitation history, signaling that the compliance-based approach has successfully converted informal trade into documented, taxable transactions. The Nigeria Customs Service has attributed the gains to stricter enforcement protocols and the voluntary participation of major importers seeking faster clearance times and reduced inspection rates.
Industry analysts note that the revenue performance comes amid broader fiscal pressures on the Nigerian government, which has struggled with declining oil revenues and mounting debt service obligations. The customs data suggests that trade-based revenue streams could provide more sustainable alternatives to hydrocarbon dependence, particularly as regional trade volumes expand under the African Continental Free Trade Area agreement.
Enforcement Actions Accompany Revenue Growth
Even as revenue figures climbed, the Nigeria Customs Service moved to suspend at least one operator from the AEO programme, according to Nairametrics reporting, demonstrating that certification status remains conditional on continuous compliance. The enforcement action underscores the agency's dual mandate of revenue generation and border security, with officials emphasizing that AEO benefits can be revoked for violations of programme standards.
The suspension indicates that customs authorities are actively monitoring certified operators rather than treating AEO status as permanent, a practice aligned with World Customs Organization guidelines for trusted trader programmes. Such enforcement mechanisms are considered essential for maintaining programme integrity and preventing abuse by entities seeking preferential treatment without genuine compliance.
Channels Television reported that the customs duties increase was "driven by enhanced compliance and increased volumes of legitimate trade," suggesting that the programme has successfully channeled previously informal trade flows into regulated pathways. The combination of incentives for compliant traders and penalties for violations appears to have created a framework that balances trade facilitation with revenue protection.
Implications for Trade Policy and Revenue Projections
The AEO programme's performance carries significant implications for Nigeria's medium-term revenue strategy, particularly as the Federal Government pursues a target of ₦19.76 trillion in total revenue for the 2026 fiscal year. Customs collections have historically contributed 15-20 percent of federal revenue, making efficiency gains in this sector strategically important for fiscal stability.
Trade policy experts suggest that expanding the AEO programme to additional sectors and smaller enterprises could unlock further revenue potential, though such expansion would require substantial investment in customs infrastructure and personnel training. The current results demonstrate proof of concept for compliance-based trade facilitation in the Nigerian context, potentially informing similar initiatives across West Africa.
The customs revenue data will be closely watched by international financial institutions, including the International Monetary Fund, which has encouraged Nigeria to strengthen non-oil revenue collection as part of broader fiscal reforms. The 85.66 percent growth rate, if sustained, could materially improve Nigeria's revenue-to-GDP ratio, currently among the lowest in sub-Saharan Africa at approximately 8 percent.
As the Nigeria Customs Service continues refining its AEO framework, the balance between maintaining strict compliance standards and expanding programme participation will determine whether the initial revenue gains can be sustained and scaled across Nigeria's extensive border network.