Nigeria's finance ministry has ordered the immediate suspension of a levy on all imported goods, which companies had said would raise the cost of doing business and crimp economic recovery efforts.

Finance Minister Wale Edun said in a directive issued late on Monday that the 4% Free on Board (FOB) levy, introduced by the Nigeria Customs Service (NCS) last month, should be suspended to address the concerns raised by businesses.

"Following extensive consultations with industry stakeholders, trade experts, and relevant government officials, it has become clear that the implementation of the 4% FOB charge poses significant challenges to Nigerian trade facilitation, the business environment, and economic stability," Edun said in a statement.

Importers and business groups had warned that the levy would increase the cost of goods, fuel inflation, and hurt Nigeria's trade competitiveness at a time when the country was trying to end currency volatility and sluggish growth.

The suspension will allow for a comprehensive review of the levy's framework and its broader economic implications, the ministry said, adding that it would work with the customs service and other stakeholders to develop a more "equitable and efficient revenue structure".

Nigeria, Africa's largest economy, has been seeking to boost non-oil revenues amid declining crude output and mounting fiscal pressures.

But businesses have pushed back against what they see as arbitrary levies that complicate trade and raise costs.