The honest answer is that CIF usually looks cheaper and FOB usually is cheaper — but only if you have a freight forwarder worth using. Here is the arithmetic.
What each term covers
Under FOB (Free on Board), the supplier delivers the goods loaded on the vessel at the origin port and clears them for export. You arrange and pay for ocean freight, insurance, and everything after.
Under CIF (Cost, Insurance and Freight), the supplier also arranges and pays ocean freight and insurance to your destination port. Risk still passes to you at loading in both cases — CIF does not extend the supplier's risk, only their payment obligation.
A worked comparison
Take 5,000 units at $4.00 ex-works, one 20ft container, Shenzhen to Tema, Ghana.
Supplier's CIF quote: $4.62 per unit, all-in to Tema. Total $23,100.
Supplier's FOB quote: $4.10 per unit. Total $20,500. You then add:
- Ocean freight, booked through your own forwarder: $1,650
- Marine insurance at 0.35% of CIF value: $78
- Origin terminal handling, already in the FOB price: $0
Your FOB landed-at-port total: $22,228.
The gap is $872, or about 3.8%. That is the freight margin the supplier built in — normal, and not evidence of bad faith. They booked the container, carried the cost, and took a spread.
Why the gap is usually larger than it looks
Two effects compound in the CIF case across most African corridors.
Duty is assessed on CIF value. Nigeria, Ghana, and Kenya all compute duty on a CIF basis. So the supplier's freight margin is not just a cost — it inflates the value your duty is calculated on. At a 20% duty band, that extra $872 of declared value costs roughly another $174 in duty.
Levies compound on the duty-inclusive base. In Ghana, VAT at 15% plus NHIL, GETFund, and the COVID-19 levy are layered on a base that already includes duty. The inflated freight figure propagates through every one of them.
In the example above, the real difference lands closer to $1,100 once duty and levies are counted — about 5% of the order.
South Africa is the exception. SARS assesses duty on an FOB basis, so the duty-inflation effect does not apply. The comparison there is the freight margin alone, which weakens the case for FOB considerably.
When CIF is genuinely the better choice
You have no forwarder relationship. A supplier booking through their regular freight agent at contracted rates may beat the spot rate a first-time importer gets, and the margin can be smaller than your inexperience costs you.
Small or consolidated shipments. For LCL cargo, the coordination overhead of arranging your own freight is disproportionate to the saving.
You value one number. A single CIF price is easy to compare across suppliers and easy to budget. FOB requires you to gather freight quotes separately and normalise them before you can compare anything.
Volatile freight markets. When rates are moving fast, a fixed CIF quote transfers that risk to the supplier.
When FOB is clearly better
You ship regularly. Once you have a forwarder and a rate agreement, you will beat any supplier's built-in margin consistently.
Full containers. FCL is where the saving is largest and the coordination cost lowest.
You want visibility. Under FOB the carrier is your contractor. You get direct tracking, direct escalation, and a bill of lading consigned as you choose. Under CIF you are asking your supplier for updates about a shipment they no longer care about.
High-duty goods. The higher your duty band, the more the CIF value inflation costs you. At 35% under the ECOWAS CET, the effect is substantial.
The insurance trap
This is the part that matters most and gets the least attention.
CIF obliges the seller to insure only at Institute Cargo Clauses (C) — a narrow named-perils policy. It does not cover theft, non-delivery, or most water damage. Buyers routinely assume "insurance included" means they are covered, and discover the gap only when a claim is refused.
If you buy CIF, either negotiate ICC (A) cover explicitly and get the certificate, or treat the included insurance as near-worthless and buy your own policy on top. If you are buying your own policy anyway, much of CIF's convenience advantage has already evaporated.
The practical recommendation
First one or two shipments: buy CIF. Learn the corridor, build the supplier relationship, and do not add freight coordination to a process you are still learning. Read the insurance certificate.
From your third shipment: get an FOB quote alongside every CIF quote and compare on landed cost including duty and levies, not on the quoted line. Once the FOB route is consistently cheaper — and in Nigeria, Ghana, and Kenya it usually will be — move across and keep your forwarder.
And note the container caveat: for containerised cargo the ICC's own guidance prefers FCA over FOB, because FOB's risk-transfer point was written for goods lifted over a ship's rail rather than handed over at a container yard days earlier.