LAGOS – Stakeholders have described the planned $3.2 billion Customs e-modernisation project as a drainpipe and debt trap that will financially cage the country.
The Nigeria Customs Service (NCS) and a consortium, Trade Modernisation Project Limited, had in May 2022, signed a concession agreement worth $3.2 billion to digitise the operations of the border security and revenue collection outfit with an expected $17.6 billion in revenue.
Analysts have averred that by virtue of its strategic position and mandate, the NCS remains very strategic to the economic vibrancy of the country, adding that earnings from this service have proved to be very vital to sustaining the much needed revenue by the government.
Under the watch of the immediate past Customs Comptroller General (CGC), Hameed Ali, a retired Colonel, the NCS generated revenue that perhaps raised the bar in its earnings. For instance, in 2019, the NCS generated the sum of N1.34 trillion; in 2020, N1.67 trillion; 2021 was N2.24 trillion and in 2022, N2.6 trillion. Although these figures appear impressive, the service was unable to meet its set revenue target of N3.019 trillion for 2022.
At a ministerial briefing late in 2022, Ali informed that the service was already working on full electronic automation platform to enable connection to global best practices and by extension, improve the agency’s operations, including blocking revenue leakages. This will involve automating the entire operating process to enhance speedy processing and clearance of goods and services.
The planned e-platform, coming under the aegis of the Customs modernisation project, Ali explained, is expected to boost revenue growth by about 30 percent will cost about $3.2 billion being invested in 20 years, with a projected total revenue $17.6 billion.
But stakeholders in the sector have kicked against it, insisting that it is a veiled attempt by the Customs to deploy scarce government resources into buying what the service already has. They argued that the humongous sum of $3.2 billion planned to be borrowed from the Africa Finance Corporation (AFC) to finance a project, which will eventually be handed over to a concessionaire, is absurd as the same amount can be used to automate or digitalise the entire civil service in the country, if properly managed.
Besides, the stakeholders argued that whereas the Debt Management Office (DMO) had projected Nigeria’s total debt stock to the tune of N77 trillion as at May 2023, the planned concession of Customs modernisation will further plunge the country into another debt of $3.2 billion. Furthermore, the general feeling is that the project was not in the national interest, although veiled as a revenue booster.
An industry expert and President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, described the project as a “fraud” that will set the country backwards in terms of development.
According to him, those promoting it have no knowledge about Customs modernisation and are not suitable to undertake such task on behalf of the country. He, therefore, urged the new administration of President Bola Tinubu to audit the entire system.
“It is a fraud, you don’t do such things. Why do you need such huge amount of money for Customs project after you have all the scanners and platforms, but misused them? Webb Fontaine is still there and you still want to bring in new people who know nothing about Customs. Which modernisation are they bringing? Where did they come from? An internet company will just put things together and start quoting billions in dollars.
“What you need to do is to reorganise Customs, it already has the facilities, which can be improved upon in any area it is lacking. This won’t create such huge cost or concession. We don’t need any serious enforcement unit; any time from now, we will be having free trade under African Continental Free Trade Area. Free trade means that you are not going to pay duty, so why do you need all these expensive technology? What you need is technicality.
“It’s all fraud, which is very unfortunate. How many times will you reform Customs? What you need is to audit the platform which we made in our recommendation from a presidential committee that I served, identify gaps and upgrade to fill them,” Amiwero said.
President of the Association of Nigeria Licensed Customs Agents (ANLCA), Tony Iju Nwabunike, described the proposed deal as a “debt trap” for the country that requires critical examination. He called on the Federal Government and the National Assembly to weigh in on the matter, warning that perhaps the pressure on the NCS to generate outrageous revenue could have influenced the modernisation plans.
Yet, concerns over the project pervade within the Customs. A group, writing under the aegis of Concerned and Patriotic Customs Officers, has also written to President Tinubu requesting that he should review the project critically and quash it to save the country like he did in the removal of fuel subsidy.
According to the group, the $3.2 billion Customs modernisation project amounts to a concession of Customs for 20 years and will result in some persons with vested interest taking away government revenue under the Comprehensive Import Supervision Scheme (CISS) account domiciled with the Central Bank of Nigeria (CBN).
“We call for your attention and intervention in stopping the $3.2 billion modernisation project which has generated controversies. This modernisation will only eat up from our revenues while Nigeria as a country will benefit less. The company asked to handle it was hurriedly registered, without the required technical experience and could set the gains achieved by the service backwards,” the group noted in its appeal to President Tinubu, adding that “claims that some concessionaires have already invested $300 million in Customs modernisation is untrue because the companies have not brought anything worth that amount into the NCS. They only want to reap from the output of our officers collecting duty for government.”
While some issues surrounding the project have become controversial and subject of litigation, it has been argued that such costly project is unnecessary as the NCS is believed to have gone far with its modernisation over the years without getting the country tied to a debt trap.
Nwabunike agreed that the NCS is presently one of the most automated government agencies in the country with its homegrown Nigeria Integrated Customs Information System (NICIS). This, he explained, only requires upgrade to meet the demands of current realities and dynamism in trade.
Findings show that the country’s Customs modernisation started from the 1990s with the introduction of the Automated System for Customs Data (ASYCUDA) software. The ASYCUDA, which is a computerised Customs management system that covers most foreign trade procedure was created by the United Nations Conference on Trade and Development (UNCTAD). ASYCUDA handles manifests and Customs declarations, along with accounting, transit and suspense procedures. It also generates trade data that can be used for statistical and economic analysis.
Over time, the NCS moved from ASYCUDA to higher versions called ASYCUDA 2.0 and ASYCUDA ++. The service technology backbone has evolved further with the establishment of Nigeria Integrated Customs Information System (NICIS). The NICIS, a homegrown platform like GCNET being used in Ghana, has been upgraded to NICIS II to accommodate higher volume of trade and link up other government agencies and strategic stakeholders in a single window platform.
“Using our existing modernisation template, Mr. President, we make bold to inform you that the service has been able to move from generating N800 billion in 2015 to collecting over N2.6 trillion in 2022 without the controversial modernisation concession and we can do better under this system because over 3500 officers of the Nigeria Customs Service have been trained while 150 of them are presently undergoing technical training on various aspects of modernisation required for trade,” the group argued in their letter to the president.
The NCS, the group maintained, has attained a status for paperless and electronic operation without “this expensive modernisation” insisting that $3.2 billion on such project is a waste of resources.