Stakeholders Knock FG’s $176bn Customs Modernisation Project

Stakeholders in the Nigerian maritime and oil and gas sectors have expressed divergent views over the Federal Government plans to raise $176 billion through the end-to-end automation of the Nigeria Customs Service (NCS).

Recall that government had said it is targeting a revenue of $176 billion from the complete automation of the Customs cargo examination, delivery and revenue collection procedures.

Reacting to the plans by the federal government, the Director General of Lagos Chamber of Commerce and Industry (LCCI) Mr. Muda Yussuf stated that rather than the government focusing on revenue that will be generated through the modernization project, the government should rather focus on facilitating trade. He stated that emphasis that was placed on revenue has led to the detriment of trade facilitation, adding that trade facilitation is the wheel that drives investment, ease poverty and ensure social stability.

According to him, “I think the key issue is that the modernization project should do more to facilitate trade, rather than focusing on revenue, because one of the issues we have had with Customs administration is the excessive emphasis on revenue to the detriment of trade facilitation and we need trade facilitation to promote investment, to create jobs and to ease poverty, to ensure social stability and invariably to increase the revenue for the government.

“When you talk about modernization, we are talking about the use of technology to Improve customs administration, so I don't think the emphasis should be on money, but rather on trade facilitation, because the quality of trade facilitation we have in the country is very low and it will affect the economy”, he said.

However, on his part, a finance expert and former Director of Research and Advocacy at the LCCI, Dr. Vincent Nwani criticized the customs modernization project, stating that for government to realize the said revenue in 20 years, there is need to holistically modernize every agency of the government that are domiciled at the port.

He argued that, it is inappropriate to single-out just one agency for modernization, even as he explained that for government to realise the target of $176 billion, there is need to modernize all agencies in the sector.

“If they want to modernize, the best way to start is from the head, the Presidency, Ministry of Finance and if they want to really modernize the port, they should modernize NPA, modernizing the Nigeria Customs Service is not by giving them new uniforms or bringing in a new CG;  the Customs is already fairly-modernized; they already have some systems, even though they are not agreeing to use it, also the single window is working there partially.

“So, if Nigeria wants to gain revenue from Customs more than the oil sector, it is not just by singling-out the customs. We have about 14 agencies that work in the port, together all of them make money for the government, so all of them need to be modernized together at the same time, if you modernize NCS, and you have not modernized NPA, NSC, NAFDAC, SON, NIMASA, Port Health, you will only found out that you are just speaking grammar”

“So, if we really need to modernize, we have to modernize everything such that the system is alive, everyday there is light, the server is working and all is working well, so it's a whole modernization of Nigeria and Nigerian infrastructure system”.

Nwani also questioned the federal government for setting timeline for achievements that may not be feasible in few years to come, he urged the government to focus on immediate challenges rather than setting unrealizable deadline.

He asked: “Will this administration be there in 20 years’ time, let them concentrate on when they will leave in 2023, sometimes they just put 20 years’ time, as if they are going to be there till that time, without focusing on immediate needs and immediate challenges, let them do something that we can see in the next one to three years”

Also speaking, a former president of National Association of Government Approved Freight Forwarders (NAGAFF); Mr. Eugene Nweke also criticized the planned modernization of the Customs by the government.

According to him, “We have asked the Minister of Finance to justify that declaration, let her give us indicators and adaptive progression on how they intend to generate the huge revenue.

“When I say progression, look at the cargo traffic per year; then look at the revenue customs generate from them, so they should now do their forecast, if they did not have any intention to exploit the shippers,  in any way that any smart thinker will look at that very proposal, it's a self-indictment that Customs have not been generating correct revenue to the government, so if anybody come and say I will generate much more than what the customs is generating, it means they have passed a vote of no confidence on them that they have not been declaring all they generate to the government”, he said.