• Thursday, March 28, 2024
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Border closure: Customs’ N2trn annual revenue target dims hope of early reopening

border closure

Following the resolve by the management of the Nigeria Customs Service (NCS) to pursue a whopping annual revenue of N2trillion this year, there has been an increased concern among importers, and manufacturers, who depend on the nation’s seaports and borders for importation of their critical production inputs and machineries as well as export of their finished goods,.

For them, the quest to meet the huge revenue target may force the management of the NCS to persuade the Federal Government not to be in a hurry to reopen the nation’s land borders, which have been shut down for business, for the past six months.

This concern has also become worrisome following the claim by the management of Customs that the border closure has resulted in increased revenue collection by the Service.

BDSUNDAY can recall that recently, the Senate increased the 2020 revenue target of the NCS by N557.4 billion, from N942.6 billion to N1.5 trillion.

This, according to the Upper legislative House, was due to the recent report presented by Solomon Adeola-led Senate Committee on Finance in Abuja.

The Committee, which pointed out that Customs recorded an outstanding performance in 2019, by overshooting its annual target even in the first nine months of the year, recommended for the adoption of N1.5 trillion as target for 2020.

“Customs’ revenue as at September stood at N1 trillion against the budgeted figure of N969.8 billion for the year 2019. This exceeded the targeted revenue despite the global economic challenges and closure of the Nigerian boarders,” the committee said.

According to the committee, the revenue increment of NCS can be used to reduce borrowing by N200 billion and increase capital expenditure thereby decreasing the size of the budget deficit from N1.7 trillion to N1.5 trillion and also increase the total capital available to MDAs by N357 billion, from N1.01 trillion to N1.367 trillion.

Surprisingly, in addition to the proposed N1.5 trillion revenue targets, Hameed Ali (rtd), comptroller general of Customs, raised this year’s target to N2trillion, saying that the Customs has the capacity to deliver the new target.

According to Ali, the Service’s revenue has increased since the start of the closure of Nigeria’s borders, saying that Customs now collects between N4.7 billion and N5.8 billion daily since the Federal Government closed the nation’s major borders.

He said most of the cargoes that used to berth in Benin Republic and later smuggled into the country, now comes direct to Nigerian ports.

“Since border closure, Customs revenue has not dropped rather it has increased. When we closed the border, my fear was that our revenue was going to drop. To be honest, our revenue kept increasing. There was a day in September that we collected N9.2 billion, which had never happened before,” Ali stated.

Supporting this claim, was the recent assertion by Lai Mohammed, Minister of Information and Culture, who disclosed that Customs is now generating a daily revenue of N8 billion since the closure of land borders in August.

Mohammed, who stated during an assessment tour of the Nigerian side of the border with Niger Republic in Magama Jibia, Katsina State, said the figure represents over 30 percent increase in revenue, since the launch of Exercise Swift Response on August 20, 2019 to secure Nigeria’s land borders.

BDSUNDAY can recall that hope for early opening of the land borders to business was recently dashed following the failure of the Federal Government to come to agreement with its neighbors in order to re-open the borders before January 31 deadline, which was the expiration of the first phase of the Joint Security Operation ‘EX-SWIFT’ Response.

However, stakeholders especially Customs Licensed Agents have expressed worry over Customs’ emphasis on revenue generation rather than trade facilitation, which supposed to be the major responsibility of Customs operations globally.

The huge revenue target, they say, would only result in Customs officers going extra miles by imposing impossible duties and penalties on importers and their agents in their bid to realise the self-imposed N2trillion revenue target.

Babatunde Mukaila, national secretary of the Association of Nigerian Licensed Customs Agents (ANLCA), told newsmen that agents have vowed to resist attempts by Customs to arm-twist traders and clearing agents.

While stressing the need for Customs to focus more on trade facilitation rather than laying much emphasis on revenue generation, he said, Customs can target N10 trillion provided, it facilitates trade.

“It is only when Customs facilitates trade that it can get what it deserves. However, we will not allow them to arm-twist Nigerian traders to arrive at that target. They will collect appropriate duty, not the duty that would enable them get to their target,” he said.

He accused Customs of issuing wrong classification of goods to traders, with the sole aim of increasing revenue generation, a development that has remained a major concern for businesses in Nigeria.

Mukaila stated that Customs and Excise Management (CEMA) Act states that wrong declaration must attract penalty to discourage such importer, but pointed out that there was need to follow the law to the letter.

Tony Nwabunike, national president of ANLCA, told newsmen in Lagos that in other parts of the world, Customs’ main duty was trade facilitation and not revenue generation.

“All over the world, Customs is known to facilitate trade. It is only in Nigeria that one sees government setting revenue target for Customs. To us, this is unacceptable as that would make officers to deviate from their main function of trade facilitation and begin to do unnecessary things in order to meet such targets,” he said.

“By setting revenue target for Customs, government is technically discouraging export trade that would earn Nigeria foreign exchange to encourage importation because target could only be met through duty collection,” he explained.

Nwabunike called on the Federal Government to review the target, which he said was part of the things that were causing problems at the ports.

On his part, Boniface Aniebonam, founder of the National Association of Government Approved Freight Forwarders (NAGAFF), alleged that there was currently over-valuation of goods that are coming into the country.

While charging Nigeria Customs’ administration to pay more attention on the issue of values for imports, said such act would increase smuggling into the country.

Aniebonam stated that full-time smugglers pass through the authorised entry routes like airports or seaports and not the borders. “For instance, when an importer conceals or under-declares or makes wrong declaration, it is a form of smuggling because the motive was to short-change the government.”

Sadly, border closure has thrown many legitimate importers into confusion as over 2,000 trucks had been trapped at the Seme border corridor for the past six months.

This was why Nwabunike, who stated that his recent visits to the border post presented a disgusting sight of wastage of resources, said some of the perishable goods had expired, decayed or had rotten such that some of them now emit maggots.

While stating that it was difficult to place a price tag on the monumental loss incurred by Nigerians due to closure of land border, he blamed the neighbouring West African countries that had been sabotaging Nigeria’s economic and fiscal policies, which resulted in the drastic border closure policy.

Pundits believed that the Federal Government had not shown any sign of readiness to reopen the borders anytime soon.

Just last Tuesday in Lagos, Customs CG said the government would continue to engage neighbouring countries on the need to comply with the Economic Community of West African States (ECOWAS) protocols on transit trade.

Speaking at the Lagos Chamber of Commerce and Industry (LCCI) Stakeholders’ Forum on Border Closure, in Lagos, Ali, who was represented by Kaycee Ekekezie, zonal coordinator, Zone ‘A’ Lagos, said he had engaged Customs administration of neighbouring countries.

 

AMAKA ANAGOR-EWUZIE