High expectation as e-Customs project reloads
With the approval of $3.1 billion e-Customs projects, expectations are high that the trade facilitation mandate of the Nigerian Customs Service (NCS) will not only receive a boost but rub off positively on the country’s economy.
The project is expected to improve Customs’ clearance efficiency to facilitate trade, stimulate end user’s satisfaction, and foster mutually beneficial relationships between consumers and the Customs.
The Federal Executive Council (FEC) on Wednesday, September 2, 2020, approved $3.1 billion for NCS’ automation, which stakeholders are averse to because they feel it is a deal that is geared at concessioning Customs revenue collection function to private outfits at a time the Service is seen to be performing well in this area, especially, trade facilitation and application of existing technology to boost revenue to the government.
Though it is believed that the NCS should be completely overhauled, and its officers trained to be technology compliant, stakeholders are of the opinion that the project, wrapped under the ‘Customs Modernisation Project’ or ‘Customs Project’, whose mandate includes, establishing a digital/paperless Customs administration, is an initiative of Federal Government that aimed at concessioning revenue-collection function of NCS to a consortium of private firms.
However, the Minister of Finance, Budget and National Planning, Zainab Ahmed, while announcing the approval said the main objective of the project was to completely automate every aspect of the Customs business and institutionalise the use of smart and emerging technologies to enhance the statutory function of the NCS in the area of revenue generation.
She revealed that the project would be financed through Public-Private Partnership (PPP) under a concessionary period of 20 years.
“So, Council today (Wednesday) ratified Mr. President’s approval for the PPP concession for a 20-year period to Messers E-Customs HC Project Limited as a concessionaire for the delivery of Customs modernisation project.
“This is a project that will not have an immediate cost to the government, the investors are providing all of the financings and this revenue will be deployed in three phases and they will look over the investment in the concessionary period of 20 years.
“The key point is that it is not costing the Federal Government anything, the $3.1 billion being proposed will be sourced by the sponsors and the partners,’’ she said.
The minister said the Federal Government targets $176 billion revenue generation from the project.
She further said the project would enable the complete automation of the NCS processes and procedures using the application and information and technology in all aspects.
According to her, the PPP group approved for the project is led by Messers Y Technologies with four other members.
“The Bionica Technologies West Africa Limited, Bargain Securities and Supplies Nigeria Limited are lead sponsor and co-sponsor. We also have The Africa Finance Corporation (AFC) as the lead financier and Huawei Technology as a technical service provider,” she said.
The minister said the Customs Service currently has some of its functions and duties automated.
“This is end-to-end automation of all of Nigeria’s Customs Service processes and it’s going to bring huge value to the country.
“So, this investment of $3.1 billion is broken down into capital investment of $1.2 billion, which will be done in three phases over 36 months by these investors and $1.1 billion is our projection of the operational cost over the 20-year period of the implementation of this project.
“This project has the potential to yield up to $176 billion of revenue for the project and the consortia that are providing this investment are going to be paid over time according to the schedule that is negotiated for their investments including their profits and cost.
“So, this is the best possible way for Nigeria to roll out important capital projects using funds from the private sector and providing service for the use of Nigerian people and the government,” she said.
When implemented, the e-Customs Project would encompass, among other things, the deployment of e-Customs Production Applications including e-Clearance, e-Port System, Risk Control Centre (RCC), Logistics Management System (LMS), Electric Cargo Tracking System (ECTS), Intelligent Gate (i -Gate) and Mobile Enforcement (ME).
Stakeholders believe that the automation drive, as laudable as it sounds, is a smart way of concessioning the Customs through the private business interests, which will recoup their investments under the programme for 20 years.
President of the National Council of Managing Directors of Nigerian Licenced Customs Agents (NCMDLCA), Lucky Amiwero, described the project as “unnecessary duplication and waste of taxpayers’ money.”
He said: “What Customs have now is e-platform because from their system, the service supplies the Pre-Arrival Assessment Report (PAAR). When you say e-platform, it means that linking up Customs with shipping companies is electronic; linking up with terminal operators is electronic; linking up with banks is electronic; linking up from Customs to Customs is electronic, and clearing agents to Customs is electronic if you have the DTI (Direct Traders Input). I was a member of the Destination Inspection Committee, and a member of the Customs Reforms Committee and these things are there.
“In the electronic platforms, you have the backbone whereby all the transactions are done electronically. Yes, Customs might have some setbacks, but they can overcome that by upgrading and training of officers. These things are very clear; we don’t need to go into new agreement again,” he said.
Vice President of the Association of Nigerian Licensed Customs Agents (ANLCA), Kayode Farinto, said: “The e-Customs agenda is one of the conditions of the World Customs Organisation (WCO), but my concern is that there is a need for attitudinal change on the part of the Customs. How workable is the agenda? Is it that same Customs that will want to see all documents on every consignment? NCS has to train their officers; there should be what we call attitudinal change on their part before this new agenda can work effectively.
“It’s not about just bringing a new policy, you must sensitise some people; they have not sensitised them. Half of the Customs officers don’t understand what they are saying. It’s so unfortunate.
“The Customs has not been able to perfect the e-auction platform after several years, but they are now talking of paperless agenda,” he said.
However, the Chief Consultant, Proedge Limited, Tajudeen Kareem, in a document made available to The Guardian, said Nigerians would derive huge benefits from the successful execution and implementation of the e-Customs project.
He said the project would facilitate and hasten the urgently needed optimisation of the NCS systems, which would enable trade facilitation and efficient revenue collection. This in turn would enhance Nigeria’s regional and global economic competitiveness.
“It will contribute to improving national security through the development of systems and networks aimed at prevention and suppression of smuggling activities.
“Furthermore, the e-Customs Project will improve Customs’ clearance efficiency to facilitate trade, support end user satisfaction, and foster mutually beneficial relationships between consumers and the NCS, as required to improve the confidence of all stakeholders in the NCS.
“It will minimise the government’s spending and allocation to the NCS for tasks already contemplated such as digitisation of Customs processes, integration of ICT and intelligence facilities, among others. This in turn would minimize government borrowing and spending whilst diverting funds that could have been used to facilitate this project to address other pressing needs of the government.
“Above all, it will eradicate tax and duties’ evasion towards increasing revenue generation with the introduction and interplay of the Unified Customs Management System, e-Port, Logistic Monitoring, electronic-cargo tracking and mobile enforcement systems, which all imports and exports would go through,” he stated.
By partnering with the Bionica-led consortium, he said there would be a reduction of financial burden on the government to provide and maintain the e-Customs Platform, thereby freeing up resources that could be channeled to other areas of government activities and projects.
According to him, the project will in turn support and build the local economy of the host communities through direct or indirect participation of small and medium-sized companies by affording them the opportunity to serve as service providers.
“It will also improve the quality of service delivery of the NCS as a result of the effective infrastructure that is in place and restores consumer confidence in NCS officials and processes,” he stated.
The e-Customs project includes an integrated and robust infrastructure for Customs supervision, which will ensure the stability and efficiency of Customs operations at its headquarters and branches.
The infrastructure, according to him, includes a cloud data center, all connected to the Customs network, video surveillance system, among others.
Embedded in the e-Customs Project is the design and deployment of a digital/paperless NCS with the following advanced functionalities: Office Automation Application; Human Resources Management (HRM), Documents Management System (DMS), and Asset Management System (AMS). In addition, Advanced Non-Intrusive Inspection (NII) equipment will be deployed in all NCS operational locations with complete technical support and maintenance.
He explained that seamless co-ordination of all NCS operations would be enabled through the development and deployment of the e-Enforcement Platform with Unified Communications, Intelligence Video Surveillance (IVS) to facilitate mobile Customs operation.
The project, he added would introduce a robust Enterprise Network covering NCS sites (Headquarters, Zonal Headquarters, Area Commands, and Border Stations) inclusive of a centralized data center with disaster recovery that will enable the service interchange intelligent data with other departments, partner government agencies in the trade chain, and other stakeholder agencies such as the Standards Organisation of Nigeria (SON), Central Bank of Nigeria (CBN), National Agency for Food and Drug Administration and Control (NAFDAC), Federal Ministry of Finance and Federal Inland Revenue Service.
To ensure that there are no interruptions of the e-Customs Project, he said a critical part of the project would include the deployment of integrated power supply solutions on all NCS sites. This will be enhanced through the development and deployment of cybersecurity networks for all NCS Data Centers, as well as monitoring and communications systems, which will consist of intelligent video surveillance and unified communications systems.
The e-Customs project would also introduce advanced and faster X-ray scanners at the airports; seaports and land borders to assist NCS to improve clearance efficiency in order to meet trade facilitation needs.
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