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Customs automation contract draws the ire of stakeholders

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Customs automation contract draws the ire of stakeholders

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Customs arrests 41 suspected smugglers with cannabis, rice
Nigeria Customs Service

Raise issues of transparency, legality, national security

· As Jonathan’s maritime ex-aide supports the contract

By Godwin Oritse, Godfrey Bivbere and Eguono Odjegba

 

Stakeholders in the trade and shipment industry have raised eye brow over the just approved $3.1 billion (about N1.2 trillion) for the Nigerian Customs Service, NCS, automation contract, saying that transparency may have been sacrificed.

They noted that the contract was shrouded in secrecy calling on the federal government to make the details public.

The national Vice Chairman of the Association of Nigeria Licensed Customs Agents, ANLCA, Kayode Farinto, also faulted the award of the contract to a foreign firm, arguing that national security may have been compromised.

Meanwhile, a former Comptroller General of the Nigeria Customs Service, NCS, Mr. Haman Bello Ahmed, has called on Nigerians, particularly the media, to demand for the details of the contract.

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Speaking in a telephone chat with a group of Journalist in Lagos, Ahmed said that he was as confused as any Nigerian over the contract adding that the agreement should be available for Nigerians to see.

He queried the revenue figures being played up by the promoters of the concession, which is $176billion for the entire 20 years concession period or revenue to be generated by annum.

He disclosed that Nigeria lost over N30billion between 2007 and 2017 despite all efforts to block revenue leakages.

The former Customs boss lamented that if the country could lose such amount of money within a 10 year period, it will definitely loose more if the concession was not questioned.

He stated: “The agreement is not a public document; it is an agreement between the government and the contractors; it is the right of Nigerians to get the details of the contract; are they bringing the equipment and the technology? If they are doing all these, then it means that government has concessioned  the revenue collection of import duty to foreign companies.

‘‘If it is the Customs that will be using these machines, the computers and then automate the Customs duty operations.

“In this case, they will not succeed not until they are able to get all the Customs Codes, computerize all the Customs Codes.

“The implication of this is that there will be no need for the revenue department of Customs as men and officers of that department may lose their jobs.

“If government has truly concession the Customs Service, it means that the government has failed in its responsibility to the people.

“Is the $176billion projected revenue on an annual basis or the 20 years period, if it is for 20 years, then that is no money.

“Are the concessionaires bringing in their equipment, install them and train Customs to use this equipment or are they the ones that will collect duty for the government

“Remember that the Senate Committee on said that the government lost about N30billion within a period of Ten years.”

Announcing the contract last week, Finance Minister, Zainab Ahmed, stated: “The main objective of this project is to completely automate every aspect of the customs business and to institutionalize the use of smart and emerging technologies that will enhanced the statutory function of the Nigerian Customs Service in the areas of revenue generation as well as trade facilitation and enhancement of security.”

Ahmed said the project, to be delivered by Messrs E. Customs HC Project Limited, will be financed by sponsors “who will in return look over the investment in the concessionary period of 20 years” while it has the potentials to generate up to $176 billion for the country.

“So this investment of $3.1 billion is broken down into capital investment of $1.2 million which will be done in three phases over 36 months by these investors and $1.1 million is our projection of the operational cost over the 20-year period of the implementation of this project.

Reacting to the contract, maritime lawyer, Emeka Akabogu, faulted the award as lacking legality and transparency.

According to Akabogu,  there is no doubt that the country needs end-to-end customs modernisation, but it must be guided by the very reason for which it is needed, which is transparency and trade facilitation.

He stated: “Transparency will determine if the scope of the project justifies the investment. I certainly feel that the stated cost is just too high, it is mind-boggling. Automation will certainly involve new technology and innovation, but it is not rocket science. 

“The project being contemplated will probably incorporate complete automation of data submission and verification processes for cargo clearance in a formalities single window.

“I absolutely subscribe to it as it will resolve the current issues which bedevils import clearance efficiency including extortion by customs and under-declaration by importers. But it will not cost $3.1billion and does not need a 20-year concession.”

He noted that the more important element, which no reference was made to, is ensuring that the legal framework to drive the initiative is in place.

He stated: “Even though Nigeria is a signatory to the Trade Facilitation Agreement, it is not implementing most of its provisions which could greatly alleviate the challenges in the immediate term and which don’t need expenditure of ridiculous sums to achieve.

“Any investment in customs modernisation without starting from the legal framework and policy quick-wins will be cosmetic and self-defeating. 

“I advise we start from that point and from there define the technology requirements to facilitate compliance which will be the basis for procurement such as has been done. We have put the cart before the horse,” he added.

However, the former Senior Special Assistant to ex-President Goodluck Jonathan on maritime matters, Mr. Leke  Oyewole, supported the automation project saying that it ought to have happened long before now.

Oyewole also said that it will positively changed the way the Nigeria Customs Service, NCS, run its operations and also generate more revenue to the Federal Government.

According to him, the project, when implemented, will mitigate issues of under-declaration of cargo and other sharp practices in Customs services.

He stated: “The modernization will address a lot of issues in importations that are not properly captured and it is going to expedite clearance of cargoes from the ports.

“It will improve the turnaround time for ships. The advantages are enormous because that is the revolution that is necessary in the ports.

“The dwell time for cargo in the port will drastically reduce, the turnaround time for ships will be reduced and ultimately it will also address the negative perception the international shipping lines have about Nigeria that necessitated the risk premium.

“It will also have an effect on the issue of piracy. If you add all these together, you will know that it is an overdue development and I thank God that the government is looking at this direction.”

On the vehement opposition against the move, Oyewole said, “that a lot of people will kick against is because it will take away fraudulent practices in the ports, that is one major reason that will make people kick against it.

“It is a popular saying that the other name for maritime in Nigeria is fraud.”

Contacted for reaction, Customs National Public Relations Officer, Deputy Comptroller Joseph Attah, said he is not in a position to comment on the activities of the ministry of finance, saying the NCS was not the contract awarding authority. 

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