Nohena Insights · Policy & Tariffs
How the CET review will affect your landed cost
The ongoing ECOWAS CET review will likely change your landed cost by adjusting the base import duty rates for specific goods, directly impacting the customs duty calculation and all subsequent levies.
Nohena · 17 October 2026 · 8 min read
How the CET review will affect your landed cost
The ongoing ECOWAS CET review will affect your landed cost by potentially changing the base import duty rate for your goods, which is a foundational component of the total customs charges you pay.
For importers and their agents, any adjustment to the Common External Tariff, or CET, is a significant event. These reviews, while periodic and necessary for regional economic policy, introduce a period of uncertainty. A change in a tariff line can have a cascading effect on an entire supply chain, altering the cost structure of bringing goods into Nigeria. Understanding the mechanics of the CET and the purpose of a review is the first step in preparing your business for the financial and operational adjustments that may follow. This analysis provides a framework for thinking about the impending changes and how to proactively manage their impact on your landed cost calculations.
What is the ECOWAS Common External Tariff (CET)?
The ECOWAS Common External Tariff is a unified set of customs duties and levies applied to goods imported into any of the 15 member states from countries outside the economic bloc.
Its primary purpose is to create a customs union, which fosters economic integration, simplifies trade across the region, and establishes a common protective trade policy against the rest of the world. Before the CET, each country had its own tariff structure, creating complexity and encouraging trade deflection. The CET harmonises this process.
The structure of the tariff is organised into five bands, each with a corresponding import duty rate:
0% band: for essential social goods, like certain medicines and educational materials.
5% band: for primary goods, raw materials, and specific inputs.
10% band: for intermediate goods and semi-finished products.
20% band: for finished goods intended for consumption.
35% band: for specific finished goods given extra protection for strategic or industrial policy reasons.
The CET uses the Harmonized System (HS) nomenclature for classifying goods. The tariff is harmonised up to the 8-digit HS code level across all ECOWAS countries. Nigeria, like other member states, adds two national digits for its own statistical and regulatory purposes, creating the 10-digit tariff line item found in the Nigerian trade tariff. This national subdivision allows for more granular control and data collection.
Why is a CET review necessary?
A CET review is necessary to ensure the region's trade policy remains aligned with its evolving industrial strategies, economic conditions, and international commitments.
Tariff structures are not static. They are dynamic policy tools used to achieve specific economic objectives. A CET review is a formal process to re-evaluate whether the current tariff bands and classifications are still serving the region's best interests. Key drivers for a review include:
Industrial policy shifts. Governments may wish to protect nascent industries or incentivise local manufacturing. A review allows them to propose raising duties on imported finished goods that compete with local products or, conversely, lowering duties on raw materials and machinery that local industries need.
Responding to global markets. Changes in global supply chains, commodity prices, or technological advancements can render certain tariff classifications obsolete or counterproductive. The review process allows for adjustments to reflect these new realities.
Trade agreement alignment. The implementation of major agreements like the African Continental Free Trade Area (AfCFTA) necessitates a review of external tariffs. The goal is to ensure that the CET does not conflict with, but rather complements, the objectives of continental integration, such as the AfCFTA's rules of origin which require substantial transformation (often around a 40% regional value content) for a product to qualify for preferential treatment.
Addressing revenue needs. Customs duties are a significant source of government revenue. A review may be initiated to assess the revenue impact of the current tariff structure and make adjustments to meet fiscal targets, though this is often balanced against the goal of facilitating trade.
How the CET review directly impacts landed cost calculation
The CET review directly impacts landed cost by altering the import duty rate, which is the first and most significant variable applied to the value of your goods during customs valuation.
Landed cost is the total cost of a product on its journey from the supplier's warehouse to the importer's door. It includes the product cost, freight, insurance, and all customs charges. The customs portion is where the CET plays its critical role.
A typical landed cost calculation for Nigerian imports involves these key steps:
Determine the CIF value. This is the sum of the Cost of the goods, Insurance, and Freight, which forms the customs value (or Value for Duty Purpose). This valuation must comply with the principles of the WTO Valuation Agreement. If insurance is not explicitly stated, Nigerian customs may apply a default rate of 1.5% of the C&F value.
Calculate the Import Duty. This is the CIF value multiplied by the import duty rate specified in the CET for that product's 10-digit HS code. This duty rate is the component that the CET review will change.
Calculate other taxes and levies. Several other charges are calculated based on the CIF value or a combination of CIF and duty. These include: Surcharge: 7% of the Import Duty.
ECOWAS Trade Liberalization Scheme (ETLS): 0.5% of the CIF value.
Value Added Tax (VAT): 7.5% calculated on the sum of the CIF value, Import Duty, Surcharge, and other applicable levies.
A small change in the base duty rate has a significant ripple effect. Consider this simplified example for a consignment with a CIF value of NGN 15,000,000.
In this example, a 10 percentage point increase in the import duty rate results in a total increase of over NGN 1.7 million in customs charges for a single consignment. This illustrates the direct and substantial financial impact of a CET review.
How to prepare your business for tariff changes
You can prepare for tariff changes by auditing your import portfolio against current HS codes, modeling the financial impact of potential rate adjustments, and maintaining open communication with your licensed agent.
Waiting for the new tariff book to be published is a reactive stance. A proactive approach involves several strategic steps:
Conduct an HS code audit. The accuracy of your HS code classification is paramount. An incorrect code that currently carries a low duty rate might be reclassified into a much higher band post-review. Verify that every product you import is classified under the correct 10-digit Nigerian tariff heading. This is the single most important preparatory step.
Model cost scenarios. For your most frequently imported products, model the landed cost impact of potential duty rate changes. What happens if the duty moves from 10% to 20%? Or from 5% to 10%? This analysis will help you understand your financial exposure and inform pricing, budgeting, and sourcing decisions.
Engage your licensed customs agent. Your agent is your partner in customs compliance. Discuss the potential CET changes with them. They have on-the-ground experience and can provide insights into how similar changes have been implemented in the past. Decision support systems can help your agent model these scenarios with high precision, preparing a lodgement-ready declaration that shows the potential financial outcomes before you commit to a shipment. Nohena prepares ; the licensed agent lodges.
Review your sourcing strategy. If a tariff increase makes importing a particular product from outside ECOWAS prohibitively expensive, it may be time to explore alternatives. Can you source the item from a supplier within an ECOWAS country, which would attract 0% duty? Could you import it from another African country under the AfCFTA preferential rules?
Stay informed. Monitor official announcements from the Nigeria Customs Service (NCS), the Federal Ministry of Finance, and ECOWAS itself. Reliable information and analysis are crucial during a period of policy change. You can find ongoing analysis of regulatory and policy shifts in our insights section .
Preparation is key. The CET review will eventually conclude, and new rates will be gazetted. Businesses that have anticipated the potential changes and planned accordingly will be best positioned to navigate the new tariff landscape with minimal disruption.
FAQ
When will the new CET rates take effect?
The new CET rates will take effect on a date specified by national legislation after the ECOWAS Commission completes its review and the new tariff is formally adopted by the Council of Ministers. The implementation is not immediate upon conclusion of the review; it must be domesticated into Nigerian law, a process which can take several months and will be publicly announced.
Will the CET review affect VAT or other levies?
The CET review itself does not directly change the rates for Value Added Tax (VAT), ETLS, or other national levies. However, because some of these charges (like VAT and Surcharge) are calculated on a base that includes the customs duty, any change in the duty rate will have a cascading effect on the final amount paid for these other taxes.
How do I find the current duty rate for my product?
The definitive source for the current import duty rate for any product is the official Nigerian Customs Service tariff. This can be accessed through the Nigerian Trade Hub portal or in the official tariff book. It is essential to use the correct 10-digit Harmonized System (HS) code for your product to find the applicable rate.
Does the CET review impact exports from Nigeria?
No, the CET review primarily impacts goods being imported into the ECOWAS region from non-member countries. Exports from Nigeria are governed by the import regulations and tariff policies of the destination country, not the ECOWAS CET.