FEC okays $3.1bn Customs modernization project

*Targets $176bn revenue

By Chesa Chesa

The Federal Executive Council (FEC) on Wednesday approved $3.1 billion for additional automation of the operations of the Nigeria Customs Service (NCS).
The Minister of Finance, Budget and National Planning, Zainab Ahmed disclosed this at the end of the 14th virtual FEC meeting, presided over by President Muhammadu Buhari.

Ahmed, briefing alongside her colleagues, Attorney-General and Minister for Justice, Abubakar Malami; Works and Housing, Babatunde Fasola; Information and Culture, Lai Mohammed; Aviation, Hadi Sirika and Communications and Digital Economy Dr Isa Ali Pantami; said the funds would be sourced solely by the concessionaires who will be in charge of the project for 20 years.

The Minister who said government was targeting $176 billion revenue generation from the project, explained that the project would enable the complete automation of the NCS processes and procedures.

Ahmed said that the project was awarded in favour of a firm, E. Customs HC Projects Nigeria Limited, for concessionary period of 20 years.

She explained: “The main objective of the project is to completely automate every aspect of the customs business and to institutionalize the use of smart and emerging technologies that will enhanced the statutory function of the Nigerian Customs Service in the areas of revenue generation as well as trade facilitation and enhancement of security.”

Besides, “this is a project that will not have an immediate cost to the government, the investors are providing all of the financing 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 one thing, the $3.1 billion being proposed will be sourced by the sponsors and the partners”, she stated.

Responding to questions, Ahmed further explained that “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 project using funds from the private sector and providing service for the use of Nigerian people and the government.”

The strategic plan for the e-Customs Project began in 2016 and when implemented, it will encompass among other things, the deployment of e-Customs Production Applications including Production Applications include 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).

The memo presented to FEC on it indicated that the e-project would ensure a seamless co-ordination of all NCS operations through the development and deployment of e-Enforcement Platform with Unified Communications,

Intelligence Video Surveillance (IVS) to facilitate mobile Customs operation. the benefits of the e-Customs Project to include; to facilitate and hasten the urgently needed optimization of the NCS Systems which will enable trade facilitation and efficient revenue collection and this will in turn enhance Nigeria’s regional and global economic competence.

Others are that, “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 minimize government spending and allocation to the NCS for tasks already contemplated such as digitization 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”, it added.

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