Business

Customs drained by endless transformation

In the last 41 years, the Nigerian Customs Service has not achieved much despite the huge amount of money spent to improve its operations and personnel, BAYO AKOMOLAFE reports

Despite the warnings by both the Senate and the House of Representatives committees, who held public hearings to investigate the reliability of Customs mordernistion contract, the Federal Executive Council recently approved a 20-year contract to a foreign firm, E-Customs HC Project Limited under a Public Private Partnership (PPP) arrangement.

The Senate and House Joint Committees on Finance, Customs and Excise and Public Petitions were saddled with the task of investigating the proposed concession. The new e-Customs project is simply an integration of applications, platforms and hard wares involving an all in one nationwide imports and exports management system. Also, the solution facilitates excise processes, security/anti-smuggling activities, manifest processing, licensing, revenue collection and information sharing and a unified platform opened to all users, such as traders, agencies, Customs inspectors and administrators. Besides, the defender of the project explained that $3.1 billion project has the potential to yield $176 billion revenue for government.

Thrilled by the fortune in the project, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, presented the memo intended to enable a complete automation of the service processes and procedures, saying that the project would be managed by e-Customs HC Projects Nigeria Limited for a concessionary period of 20 years.

Sponsors

She explained: “The Bionica Technologies West Africa Limited, Bargain Securities and Supplies Nigeria Limited, these are lead sponsor and co-sponsor. We also have The Africa Finance Corporation (AFC) as the lead financier and Huawei Technology as a technical service provider.”

Issue

Before now, NCS had passed through series of reforms ranging from Pre-Shipment Inspection Scheme introduced in 1979 and later backed up by legal agreement via Pre-Shipment Inspection Act of 1996 (Decree No.11 of 1996). Between March and September, 1999, Destination Inspection (DI) was re-introduced, under a contractual agreement with Destination Inspection Agents (DIAs), the essence was for a full computerization and interconnectivity of the Automation System of Customs Data (ASYCUDA) to all stakeholders. Under the scheme, it was learnt that the contractor/consultant installed outdated 2.7 site instead of the 3.0 site at a huge amount of money paid for by the government. Five years after, the ASYCUDA agreement was not completed, out of the 17 sites covered in the contract, only seven sites were installed. Not satisfied with the project, in June, 2001, a presidential committee, chaired by Federal Ministry of Finance was set up to review the Pre-shipment Inspection (PSI) scheme. The committee examined the objectives and mode of operations of the PSI.

Consequently, in 2002, government further commissioned Messrs J.C.E. Consulting Associate (Crown Agent) to undertake a study on the Comprehensive Import Supervision Scheme (CISS) and Nigeria Customs Service for the purpose of disengaging the services of Pre-shipment Inspection Agents in order to enhance Customs revenue. Determined to actualise this in June 2002, a specialised technical committee of stakeholders was also set up to review the Pre-shipment Inspection preparatory to re-introduction of Destination Inspection (DI). By June 2003, the Federal Government signed an agreement with Messrs Cotecna Inspection SA on the provision, installation and operation of 14 x-ray scanners on Build, Operate & Transfer (BOT) BASIS , at prescribed locations to scan all imports coming through the approved imports entry points.

The 10-year contract also included the yearly training of 50 Customs officer on the Computerised Risk Management System (CRMS), to train 500 officers within the contract period of ten years. Again, the implementation was marred with several flaws and compromises after spending huge amount of money to procure scanners. In December 2003, the Federal Executive Council set up a Presidential Committee on the Implementation of Destination Inspection and Asycuda, under the Chairmanship of the Minister of Transport.

Between 2012 and 2013, NCS nurtured, developed and commenced the Pre Arrival Assessment Report (PAAR) regime, and it received global commendations, even the World Customs Organisation attested it as a model for Africa. Today, PAAR has since been upgraded to NICIS II. Irked by the recent approval, stakeholders explained that the new e-customs project was another deliberate effort to mortgage NCS to a foreign firm to generate unrealistic revenue from a concessionaire, who promised to invest $3.1 billion and generate $176 billion within 20 years.

For instance, the freight forwarders under the umbrella of National Association of Government Approved Freight Forwarders have asked the Minister of Finance, Budget, Economic Planning to provide the “applicable financial indices and parameters used in arriving at the projected revenue generation to the sum of $176 billion for over a 20 year period. In a letter signed by its former National President, Dr. Eugene Nweke, on behalf of the stakeholders, they noted that the service made an average of yearly revenue of N1 trillion, noting that would amount to N20 trillion in 20 years.

Nweke noted: “At what point should the trading public and Nigerians expect an enduring and lasting modernisation processes to enhancing process in the Nigeria Customs Service. Simply, when will there be an end to perennial modernisation attempts? We are wondering why such customs functions cannot be integrated nor find a place in the NICIS II platform, instead of contracting it out. We think that this singular contract seemingly casts questions on the integrity of relevance on NICIS II e-Platform.

“There is no attached milestone concession investment and recoupment plans, as concessions are meant to attract Foreign Direct Investment (FDI). It is pertinent for us to ask, if this concession merited being classified under the FDI status, what are the applicable financial indices and parameters used in arriving at the projected revenue generation to the sum of $176 billion?”

Last line

The Federal Government should not entrust its fortune in the hand of foreigners, rather, it should develop another way of modernising NCS at affordable cost, especially at a time the economy of the country is nose diving.

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