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Customs Report

Stakeholders reject proposed e-Customs modernization

Published

4 years ago

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By Eguono Odjegba
Principal stakeholders in the port industry has described the proposed electronic Customs Modernisation  Project as costly duplication of the function of the Nigeria Customs Service, NCS, and have called on President Muhammadu Buhari to discard the proposal, which they further described as fraudulent with the trappings of a national rip off.
They urged both the president and the federal executive council to scrutinize the deal as well the consortium of four private firms it was contracted to, with a view to determine and expose those involved, to serve as deterrence in the fight against corruption.
The project which was presented as an initiative of the Federal Government to concession the revenue-collection function of the Nigeria Customs Service, NCS, has also faced opposition from other quarters, including the House of Representatives, which faulted the project earlier this year on the ground that it did not follow the due process.
The House of Representatives subsequently passed a resolution suspending its implementation until it is subjected to legislative hearing and public bid.
The stakeholders made up of importers, customs brokers, freight forwarders and logistics providers argue that the source of the project is not only doubtful but that the project runs contrary to the mantra of the present government on issues of corporate governance and integrity, financial prudence and aversion to wastage.
A letter purportedly from the State House signed by the chief of staff to the president, Abbah Kyari, now late, had directed the Attorney General and Minister of Justice, Ministers of Finance and Budget and Planning, to finalize the concession agreement between the Infrastructure Concession Regulatory Commission, ICRC, Nigeria Customs Service, NCS, and a Special Purpose Vehicle company for the deal, latest 17th September 2019, before it was placed under legislative hammer.
Also known as ‘e-Customs Project’, it was designed as a digital/paperless Customs administration in revenue-collection, with a start-up $300 million portfolio fee to be drawn from the Comprehensive Import Supervision Scheme, CISS, domiciled with the Central Bank of Nigeria, CBN, Nigerian Export Supervision Scheme, NESS, and Customs revenue.
According to the project’s framework, the CISS and NESS revenue sharing arrangement is to “commence on a pro-rata basis against the phase one of the $300 million investment programme”, purportedly upon commissioning of investments and verifiable by CBN’s Letters of Credit or valid import documentation.
To guarantee performance, the project according to presidential directive as contained in the said State House letter, in addition recommended appropriate termination clause, “effective if the consortium is unable to reach financial close within nine months of the concession agreement being effective.”
The maritime stakeholders argue that the project which has Bionica Technologies West Africa Limited as sponsors; Bergan Security Consultants and Supplies as co-sponsors; African Finance Corporation, AFC, lead financiers and Huawei Nigeria as partners are costly duplication of the function of the NCS.
President of the National Council of Managing Directors of Nigerian Licensed Customs Agents, NCMDLCA, Lucky Amiwero, described the project is an unnecessary duplication and wastage of tax payers money.
“Any payment made in respect of the new contract is an illegal payment and misapplication of scarce national resources. We already have e-Customs on ground. It is wrong to be making payments on such project when the old functioning one is the one doing the job.”
“It is wrong to start talking of giving the same job to four private companies. What new thing are they coming to do? I am talking as an expert. I was in the Presidential Committee in 2010 and I served as a subcommittee chairman too. The Webb Fontain platform has been good all through. When the Pre-Arrival Assessment Report, PAAR, system failed, former Minister of Finance, Ngozi Okonjo-Iweala reverted to that platform, and it has been good for the service with regard to efficient revenue collection and trade facilitation.”
He also expressed reservation about the competence of the listed project contractors. “The four companies are not experts in trade facilitation. They don’t have any background qualifying them for such job, even if it becomes necessary, but in this case, it is not. All we need to do as a country is to audit and maybe upgrade at a lesser cost.”
Also speaking, Chairman of Skelas Group, Prince Olayiwola Shittu said, “I don’t want to rule out the fact that modernization can be useful, but if the experience from PAAR is going to be repeated, if the reason people are saying they should privatize customs collection of duty, is because it is nobody’s job, then that is political, that is finding food for the boys. Why do we need to be paying for what we can do? But so far, what they want to do is still shrouded in secrecy, we have only heard rumour about what they want to modernize, why the secrecy and failure to carry stakeholders along during the conception?”, he asked.
Corroborating, National President of the Association of Nigeria Licensed Customs Agents, ANLCA, Iju Tony Nwabunike said “We have heard that the project was not known to the presidency, that some interested foreigners and some Nigerian fronts packaged the project in secret. The secret surrounding the project is a signal that something is not right.
“Now that Abba Kyari is dead who I understand was the arrow head, nothing stops President Buhari from studying the said proposal among the many others projects sources say were found in the late Abba Kyari’s office and are been looked into, and making a statement afterwards.”
As commenting, a retired Comptroller of Customs who does not want his name mentioned, argue that the whole project idea is to allow some people siphon public fund.
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 modernized, the Secretary-General of World Customs Organisation attested to that during his visit to Nigeria recently.
 “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.”
It will be recalled that some lawmakers last year also challenged the controversial deal on the floor of the House of Representatives. In a letter titled: “Suspension of proposed concession arrangement for the Customs modernisation  project”,  jointly signed by Chairman House Committee on Finance, James Faleke; Chairman Public Petition, Jerry Alagbaoso, and Chairman Customs, Yuguda Hassan Kila, the lawmakers described the proposed concession as “curious.”
Consequent on the legislative order raised, the lawmakers passed a resolution directing the ministers affected by the controversial presidential order to stay action on its implementation.
Available records have shown that the NCS collected more than N569 billion as at the end of May 2020 using its present system- the Webb Fontain platform. Every parameter of measurement also projects that with above revenue figure collected first five months of 2020, the Customs Service stand the chance of meeting and surpassing its N900 billion revenue target for 2020, despite the huge trade disruptions caused by Covid-19 pandemic.

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