A conflict of interest by parties in the $3.1b e-customs project which aims at modernizing the operations of Nigeria Customs Service (NCS) has stalled the formal signing of the deal six years after it was conceptualised In 2016.
Ahead of the signing, checks by our reporter shows deliberate moves by the parties to have domineering roles in the deal which ,if signed as planned, will be executed over a 20 year concession period
Comptroller-General of Customs, Hameed Ali, confirmed the unsigned state of the deal recently while explaining the 2021 operational feats of the service. Ali said “E-customs take-off process now at the stage of final signing of agreement”.
Ali, in a statement signed by the Public Relations Officer, Joseph Attah, said these are expected to impact positively on trade facilitation, fight smuggling, block revenue leakages and significantly impact on revenue generation and national security.
The project which enjoyed a buy in Malam Abba Kyari, late Chief of Staff to President Muhammadu Buhari, started suffering mild setbacks after his demise in the wake of covid-19 pandemic.
Bionica Technologies West Africa Limited, Bergman Securities and Supplies Nigeria Limited who were named lead sponsor and co-sponsor respectively seems struggling to overtake each other on the project.
The project also has Africa Finance Corporation (AFC) as the lead financier and Huawei Technology as a technical service provider.
The investment of $3.1 billion is broken down into capital investment of $1.2 billion which will be done in three phases over 36 months by these investors and $1.1 billion projection of the operational cost over the 20-year period of the implementation of the project.
Findings by our reporter reveals that Bergman brought Bionica into the project but there appears to divergent pursuit of interest and lesser cohesion amongst the parties
Comptroller General of Customs, Col Hameed Ali, sources say, is more favourably inclined towards Bionica but hasn’t been able to pull the project through.
More setbacks for the project reared their heads at a recent public hearing on amendment of Customs and Excise Management Act (CEMA) at the National Assembly where the finance ministry sought to strip the NCS of it’s revenue collection function.
Finance Minister, Zainab Ahmed had postulated in 2016 that the e-Customs Project would yield $176b revenue through NCS but expressed a turnaround view when she moved that the revenue collection function be taken away from the service late last year.
Speaking through her Ministry’s Permanent Secretary, Zainab said: “The single most important function of the Customs Service anywhere in the world is trade facilitation. But in the introduction of the Chairman, I hear him talk about revenue, collection of revenue. This is the secondary service of the Customs all over the world.
“Revenue collection by Customs is a distraction. The reason is that the main function of the Nigeria Customs Service is trade facilitation. But the trade facilitation has been pushed to the background because of the focus on revenue collection.
“In other climes, the best practice is moving towards unifying revenue collection. If we want to go that far, and achieve that best practice, our submission would be to move revenue to the Federal Inland Revenue Service so that Customs Service can really focus on trade facilitation function.”
With the finance ministry’s recent position, the deal signing expectation may not happen soon. Further checks reveal that the twenty years timeline of the deal will read from the sign on date which is not looking feasible at a time the Buhari government is left with 16 months to expiration.
The project has always attracted controversies as stakeholders and experts in the maritime sector posits that it is an unnecessary duplication of an existing customs modernisation project which is productive and improving with time.
They argue that it is an avoidable costly venture that shouldn’t be undertaken by an indebted country seeking to maximize revenue collection from non oil sources including the NCS.
President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, has described the N3.1 billion Customs modernisation project as an avoidable duplication.
Speaking to newsmen in Lagos, Amiwero said the Nigeria Customs Service (NCS) is presently operating an e-customs model powered by Webb Fontaine and that the approval for another one is not necessary.
According to him, all that is needed is an upgrade of the existing platform being used by the NCS to meet the demands and expectations of trade. He said Customs processes in Nigeria have since migrated from manual to electronic and that the expected e-customs or modernisation project won’t be different from what is on the ground.
“What we call e-customs is what we have in Webb Fontaine. I was actually the person that wrote to the government before all of these things came to materialise.
“In 2001, I put up a write-up about something which I don’t want to mention. It was the model that the Federal Government changed to set up the whole thing.
“So what Customs is doing and what Webb Fontaine has is e-customs. If government is talking about another e-customs project, then they don’t know what it means.
“It is simply electronically transferred transactions. Is that not what Webb Fontaine is doing? Central Bank is doing e-banking and Customs is doing e-customs.
“There was a time Customs processes were manual and you had to carry things from shipping companies to terminal, etc., but now all those things are gone.
“So what you have on ground is already E-Customs, and no need to duplicate it. We should improve on it” Amiwero said.
A retired Comptroller of Customs who preferred anonymity described the $3.1b deal as a fraud that shouldn’t be allowed to stand
He said “This has been an issue from the days when we were in Customs. They want to take the Comprehensive Import Supervision Scheme, CISS, collected from Free On Board, FOB. Ironically, it is foreigners that were collecting this money all through the pre-shipment inspection time.
“When we came back to Destination Inspection, it was reverted and that is what they have been struggling to collect back. As far as I am concerned, Customs has been properly modernised, the Secretary-General of World Customs Organisation attested to that during his visit to Nigeria .
“E-Customs has always been there at least starting from 2000 and has passed very rigorous scale. Customs has done tremendously well in that area. So, for anybody to say they want to put in $300 million to modernise Customs is a fraud and anybody supporting it is an enemy of Nigeria” he said.
A look at customs total revenue collections and volume of declarations processed by the NCS in the last three years shows yearly improvements.
In 2019 the NCS processed 1,206,441 transactions and collected N1,331,688,266,766 as total revenue collected. In 2020 the service had 1,326,990 transactions showing a 9.99 percent increase with total yearly revenue of N1,555,474,935,600. This was a 16.80percent increase above previous year’s figure.
In 2021, the service recorded 1,711,500 declarations with total collection of N2,240,880,308,195.77 which shows about 44percent increase.
This successes already recorded, in some stakeholders view ,has also made signing the deal less attractive.