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The $3.1bn E-Customs Modernization Project

The $3.1bn E-Customs Modernization Project
Written by Maritime First

…INTENTIONS, EXPECTATIONS AND POSSIBILITIES, DESPITE THE NATIONAL ASSEMBLY’S INITIAL INTERVENTION***

While Nigerians, especially those involved in Customs processes and Cargo clearance in the Ports, are still trying to find out the extent of the N3.25billion three Rapiscan scanners provision and installations at Apapa, TinCan & Onne seaports, we are yet again being reminded of the inability of Nigerians to solve their known problems themselves, through the resuscitation of a circular dated September 17, 2019 and signed by the late Chief of Staff to the President – Alhaji Abba Kyari (of blessed memory).

In that circular directed at the Ministers of Finance, Budget and National planning, and Justice, which was copied the Nigeria Customs Service, Infrastructure Concession & Regulatory Commission, Bionica Technologies WA ltd and Huawei Nig ltd, it was at that time directed, at paragraph 1(b)(ii) that the Ministers of Justice and Finance & Budget to “Ensure the agreement provides that: (i) the CISS/NESS revenue sharing arrangement commences, on a pro-rata basis against the phase one $300million investment program, only upon commissioning of investments, verifiable by CBN letters of credit or valid import documentation, and (ii) an appropriate termination clause be effective if the consortium is unable to reach financial close within 9 months of the concession agreement being effective.”

A further directive in that circular expressly states at 1(b)(iii), to “Ensure that strict performance guarantees are captured in the concession Agreement.”

These and many more details are yet to be known to the public, from the latest award of $3.1billion investment in the Customs e-modernization project, in which the Federal Government of Nigeria will not be committing a Kobo into it.

To think that it is still the same special purpose vehicles (SPVs) that will still be involved in this latest move shows that insincerity and lack of patriotism on the path of drivers of this project, is still playing out.

There is just no doubt that those behind this project do not mean well for Nigeria certainly. They aim to reap where they are certainly not going to sow.

Comptroller General of Customs, Col. Hameed Ali (rtd)

When the initial attempt was made public, the National Assembly stepped into the matter and requested for due diligence processes, in which the NASS and the public will be involved. Just maybe that is why in the current situation, the Honorable Minister of Finance, Budget & National Planning announced that the Federal Government of Nigeria will not be committing a dime to the project, but will be benefitting a humongous $176billion in 20years and this is without telling Nigerians what the consortium (SPV’s) will be benefitting for the deployed equipment and services yearly, or over the 20years projection. Incredible!

This writer, at the time this vexatious circular emerged in the public space in 2019, thought that Nigerians with access to power and influence keep deceiving Nigerians and the world as if every other Nigerian lacked the capacity to decipher between right and wrong, or perhaps analyze issues dispassionately.

Anyone who is as professionally passionate as this interventionist is in Customs Brokerage, would understand that virtually everything that is being discussed about the $3.1billion Customs e-modernization project is already in existence, except the installation of scanners which has been activated with the pilot project of the N3.25billion three Rapiscan scanners contract, to kick-start at  Apapa, TinCan and Onne seaports, before December 2020. We do not know for now, the stage the contractors – Airwave Nig Ltd has reached.

For those who do not know or understand the Customs Cargo clearing process, a little insight will suffice here.

The process is broken down into three stages – NICIS II, physical Examination, Releases/Exit.
Once complete Customs clearing documents are handed over to a Customs licensed agency by the consignee/client and given the power of Attorney to clear the cargo on its behalf, such agency interfaces with the Customs platform via the Nigeria Integrated Customs Information System (NICIS II) through its assigned Username and password on the www.trade.gov.ng site to data capture using information from the Pre-Arrival Assessment Report (PAAR), the Bill of lading, Form ‘M’ and the Final Invoice. Through this portal, the Assessment Notice and the Declaration Form/SGD is generated, showing the Customs Duty to be paid. This process, for those already proficient on it, takes less than five minutes.

Next, the shipping company and terminal charges are obtained online within minutes and, if funds are readily available for these three items, it is immediately paid on line, after which the terminal is approached, after booking examination, where the Chief Examiner/Releasing officer – whose service number and Name is already known, through the support information provided on www.trade.gov.ng

It is at the point of 100% physical examination that Nigeria Customs Service personnel, Customs Brokers and all manner of government/security Agencies – permitted by PEBEC or not to be in the Ports, converge to interact on the cargo.

This is the arena where time is wasted. This is the point at which all Kinds of corruptive tendencies manifest and is thrown up. This is the area that needs to be urgently automated/digitalized with the installation of rugged, tropicalized scanners, complemented with the installation of CCTV cameras and a well-lighted terminal environment.

This is the stage at which the cargo clearance process deserves technical/experts inputs, by way of ensuring the actualization of the N3.25billion three Rapiscan scanners installation, with over seventy-five more Seaports, Airports and Border stations spread across the entire landscape of Nigeria, to be covered in the due course of optimizing the efficiency of cargo delivery in Nigeria.

Attached to the provision of these Rapiscan scanners, it must be emphasized, and this must not be glossed over, is the establishment by the OEM (Original Equipment Manufacturers) of the scanners, spare parts manufacturing factories in some locations across Nigeria, such that all installed scanners can provide services uninterrupted throughout the lifespan of the procured Rapiscan scanners, or whichever ones might be added later.

Also, a scanners training Academy/Institute should be established alongside the provision of these scanners, in order to ensure that the technology is transferred to Nigerians.

Simply put, once the scanners replace physical interfaces, the processes of security checks and actual contents of cargoes can be ascertained in minutes. Suspected contents/security threatening cargoes are isolated for further checks.

If we assume that honestly declared cargoes goes through scanning and results tally with documentary declarations, reports are accessed by the releasing officer/Chief Examiner who does the needful officially to exit the cargo. The Customs brokers thereafter arrange for the cargo to be taken out of the Port.

If on the other hand cargo is suspected, that is where more time is needed to release such from Customs.

On www.trade.gov.ng website, the channel through which each cargo is treated is also provided.

Also on www.trade.gov.ng, all agencies that should interact with cargoes are listed. Many more relevant cargo-related information can be found on that website, and on www.customs.gov.ng

When cargoes to be examined by any examination officer is about to take place, related government agencies are invited to witness the examination and make their observations to the Terminal Customs head/releasing officer, before such cargoes are released.

Classification, Valuation, Security/Intelligence Alerts put on certain cargoes, only serve as warnings to the examination officers to be more vigilant of the contents, during examination and revert to those units, when the cargo falls off honest expectation.

A one-stop-desk being proposed to solve this drawback in the cargo clearance process, never found favor in the different heads of departments at Customs headquarters superintending over those units. If only they can subjugate their egos/personal interests to the collective Nigerian interests, the better it will be for all of us Nigerians.

Nigeria Customs Service presently is administratively digitally connected. Relating with the different officers, is online. All that is required is for the ICT department at the headquarters to ensure that requisite equipment and capacity building of officers are continually embarked upon.

Some terminals and shipping companies that have almost totally automated/digitalized their transactional processes are Maersk/APMT and Grimaldi/PTML. These two have also installed turnstiles to check cargo–unrelated entrances into their premises. Everyone that has to access cargo must be registered. The problem here is the number that unnecessarily swells the environment and clogs the processes. There is need to limit each agency to two or three registered personnel maximum.

One other thing. To make cargo clearance more efficient, even before the installation of scanners and completion of Customs processes automations, the relationship of the interacting Customs units has to be deliberately improved upon. All the units must imbibe the fact that they are all working for Nigeria and Nigerians, and not for somebody who appointed them, or for themselves. There must be espirit d’corp flowing in their blood.

For one Customs unit to officially release a cargo from the Ports and for another Customs unit outside of the Port to interdict/intercept/contravene it shows that there is no trust or confidence existing within the Nigeria Customs Service. There must be a deliberate effort to ingrain espirit d’corp in the minds and actions of every Customs officer.

Every Customs officer must endeavor to work for Nigeria and Nigeria alone. That is patriotism.

Now, back to this vexatious $3.1billion 20years contract to generate $176billion; has any one taken time to interrogate these numbers, even without knowing the details and how much will be made by those involved in the project for themselves assuming this project is approved by the National Assembly?

Searches on this latest Messrs. E-Customs HC project limited, which was not mentioned in the initial circular on this project, returned nothing about the company, other than the fact that they are the lead of the consortium.

$176billion expected over 20 years, implies $8.8Billion per annum revenue to be collected by Customs. At a current exchange rate of approximately N450 per dollar, returns an annual average of N4trillion per year of collectible revenue by Nigeria Customs Service.

Question that readily pops up is: Does it mean Nigeria would, as at then, still be importing virtually everything needed in Nigeria? Furthermore, does it mean that everything being done by the current government of President Mohammadu Buhari in the areas of power/energy provision, infrastructural development and Agriculture, with its expected multiplier positive effects will pale down to zero? Are we mindful of the fact that as power/energy provision improves, and industries being setup in every local government in Nigeria or ward, agricultural produce/products will find their way to refrigeration, preservation silos, industries for value addition, and with improved infrastructure (Rail, roads and inland waterways), most of the products will find markets for our teeming population to access cheap and affordable food and products?

So, it is the general belief that the taunting of no single window, when NICIS II is already in place, and that there is inefficiency in cargo clearance presently, is only making a mockery of the quality of personnel of Nigeria Customs Service who have not been challenged to come up with solutions to the known challenges to the inefficiency of cargo clearance in all the Ports and Border Stations.

Any officer worth his/her salt who grew through the ranks, after serving in almost all units/departments, at the commands and zonal levels before engagements in the management team of Nigeria Customs service at the headquarters, must be aware of the challenges militating against efficient cargoes clearance and delivery in Nigeria.

And so, if the opportunity to be on the management team presents itself, best bet is to articulate solution that will ultimately ensure optimal performance or efficiency in the Cargo clearance processes.

The case of Alhaji Dikko Inde Abdullahi, MFR, CFR – the immediate past Comptroller-General of Customs (CGC) comes to mind. He took some of Customs’ brightest, young, brainy, smart and ready-to-learn-more youngsters, sprinkled with some seniors abroad, to train on the automation of the Pre-Arrival Assessment Report (PAAR) project.

PAAR is a home grown Customs clearance document, which once introduced, was perfected over time.
The Vehicles ex-factory prices portal was nearing completion before he exited. One cannot understand why, since the immediate past CGC left, this laudable project has been in the cooler.

Ghana, to which the lady that was working on this project – Valentina Mintah, relocated to, has since being enjoying their PAARS, which they copied from Nigeria and the portal for Vehicles ex-factory prices, such that they do not need to “beg” or “see” anyone to know how much Customs Duty they have to pay to the Government for their Vehicles imports.

When the ports were concessioned with glee in 2006 to private terminal handlers, it was expected that the concessionaires will invest in Equipment & Machinery, train local personnel, etc and importantly drive down Port charges and improve on efficiency in the Ports, what we see today are deficient plants/equipment, arbitrary costs escalation, inefficient service provision, impunity of the highest order and many more annoying behaviors.

Methinks that what is about to happen in the case of the subject matter, is the uncertainty of the project with the attendant disappearance of almost all of the $3.1billion, somehow coming from the coffers of the Federal Government of Nigeria, even though it has been said that no Kobo will be spent on the project by the FGN.

Without mincing words, this project will go the way of very many others that litter the entire landscape of Nigeria – spending Nigeria’s hard-earned resources on nothing.

The take here is: Challenge Nigeria Customs to come up with ways and means of actualizing the complete automation of port processes and pronto, this will be delivered by the highly trained, patriotic, passionate and committed personnel of Nigeria Customs Service. They have done it before (in the PAAR issue) and can certainly do it again.

One thing is very sure already – the low-hanging fruit is ready for plucking to start with, and that is the vehicles ex-factory prices portal. This can be activated, as soon as now.

Meanwhile, let’s start with that, while efforts are a foot to harmonize other seemingly solvable snags in the cargo clearance processes, before the Rapiscan scanners are installed by December 2020, to eliminate the physical examination bays.

At the basics and essentially, cargo-related agencies, especially the security based ones, must endeavor to share information with their counterparts at all levels, to forestall lapses in the processes of ease of doing business and trade facilitation according to international best practices.

 

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Maritime First