4 things Nigerians stand to gain as FG approves eCustoms project

Godfrey Elimian
…FEC approves customs modernisation project despite court order baring its implementation
Nigerians without NIN will not benefit from seized food distribution- Customs

The federal executive council (FEC) has approved the Nigeria Customs Service (NCS) modernisation project, also known as e-customs, despite a court order restraining the federal government from continuing with the project.

Clem Agba, minister of state for the budget and national planning, told reporters after the meeting, chaired over by Vice President Yemi Osinbajo, that the council had approved the concessionaire’s implementation of the e-customs project. Additionally, the minister also feigned ignorance at any court order.

Recall that on May 30, 2022, the Federal Government, through the Nigeria Customs Service (NCS) signed a $3.2 billion Customs modernisation project concession agreement with Huawei and the African Finance Corporation (AFC)—the project aimed to generate $176 billion in revenue for the FG.

4 things to expect from the eCustoms project implementation
Vice President Yemi Osinbajo, Federal Republic of Nigeria

The concession, which was to be wholly funded by AFC, aims to modernize and provide ICT infrastructures for Customs operations. Agba claims that Bergman Securities Consultant and Suppliers Limited is the project sponsor and that Huawei Technologies is the principal technical service provider for the concessionaire.

He added that the concessionaire had furnished the government with $9 million (N4.135 billion) in security from the satisfactory performance of the project. They have also executed the depth facility tensions of $300 million (N138 billion) to finance the project’s first phase, TheCable reports.

“The revenue sharing arrangement is 45 per cent of accruals to the comprehensive input service scheme going to the concessionaire and 55 per cent going to the federal government, 5 per cent of what accrues to the Nigerian responsible action scheme, and 75 per cent federal government,” the minister said.

Contrary to public opinion, the concession does not cede the core functions of the NCS to private operators; rather, it seeks to modernise its processes and reduce evasion of duties and smuggling.

With the first phase of the implementation set to commence based on the approval by the FEC, here are four facelifts and development which the project would bring to the NCS operations and services.

4 things to expect from the eCustoms project implementation
Benefits of the eCustoms implementation

Read also: FG approves provision of free broadband to 20 Nigerian airports

Automation of the Customs Process

Nigerians, especially manufacturers and importers, have always yearned for a smooth and simple automated process which would aid the efficiency of clearing their cargoes from ports for a very long time.

However, what is being met by importers and manufacturers when they clear their cargo from the port is a manual and multiplied paper process, which is sometimes overbearing on them, especially the cost.

This does not diminish the efforts of the NCS over the years, which have resulted in the implementation of various strategies and techniques to speed up the process involved with the clearing and consigning cargo to their owners.

However, that yet-to-be-efficient process will be totally overhauled by the eCustoms infrastructure, a comprehensive hardware and software technology brought in by Huawei. It will be an end-to-end electronic flow of Customs processes.

Modernizing its operations, which is anticipated to be accessible through the Customs website on the web and mobile apps, would enable stronger border enforcement and better import and export surveillance.

Increased Revenue

According to the World Bank, Nigeria had a total export of 34,900,471.09 in thousands of US$ and total imports of 55,455,401.89 in thousands of US$, leading to a negative trade balance of -20,554,930.80 in thousands of US$.

Even with the customs duty of 12.37% and the tariff of 12.38%, Nigeria still posted a trade growth of -19.12% compared to a world growth of -3.91%.

This is not too far-fetched, given the outdated, redundant, and wasteful method used to collect these revenue streams. The eCustoms project, which strongly emphasises streamlining Customs operations and procedures, is anticipated to significantly improve trade facilitation by delivering effective service delivery.

In 20 years, the Federal Government’s e-Customs project will bring in roughly $176 billion in revenue, according to Hameed Ibrahim Ali, comptroller general of Customs. He claimed that the N210 billion monthly income the service collects would be quadrupled via e-Customs.

Removal of multiple charges on cargo

One of the major issues raised by importers and clearing agents is the numerous charges placed on their already cleared goods or the needed intervention to have their goods released from ports due to arbitrary decisions by officials of the NCS.

Hameed Ibrahim Ali, comptroller general of Customs

This problem which sometimes results in delays in the delivery of goods and consignment is expected to be eliminated by the e-Customs project by creating an efficient audit mechanism and effectively revealing the stage each cargo has undergone in the clearing process.

Timi Bomodi, national public relations for NCS, stated that with the implementation of e-Customs, cargo inspections and the release of commodities for import or export would be broadcast live across several platforms. He claimed that this would allow various divisions to be aware of the status of each import and export being examined or released at the port.

The Service has been working with Webb Fontaine as technical partners from the ASYCUDA era to NICIS. As technical partners, all they did was manage our ICT infrastructure that focused on enhancing user interface and user experience on imports/exports. Yet, many aspects of the Customs job are still not automated. As efficient as NICIS-II is, it still has limitations, which the e-Customs would further address,” he said.

Creation of a singular monitoring interface

Currently, the primary way Custom monitors the operations of various manufacturing companies to determine their excise duties is by manually moving around these factories and collecting information readily available.

This process is sometimes not efficient and effective. It is time-consuming and sometimes undermines the revenue collected through this source.

With the introduction of eCustoms, Huawei is anticipated to offer the technical framework for automating Customs excise processes. The arrangement, according to Bomodi, would ensure that all excise monitoring actions are scaled up to match what occurs on the import and export side at the ports.

“It will connect factories across the country and create a single monitoring system that checks daily production. It will also help to monitor taxes using more sophisticated platforms like telecom operations”

Read also: Nigeria Startup Act: FG sets up implementation committee, plans to spend N10bn yearly

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