The claim by Hameed Ali, comptroller general of the Nigerian Customs Service, that border closure has increased the agency’s revenue appears to be a far-cry from available data, a fact check by BusinessDay has revealed.
Nigeria had on August 20 shut its borders with Benin Republic in order, the government said, to check the effect of smuggling, particularly rice and petrol, which it said is hurting the economy.
The directive given by President Muhammadu Buhari was initially supposed to last for about 28 days but was later extended indefinitely.
The claim
Hameed Ali, while recently analysing the impact the closure has had on the economy, highlighted several benefits, including increased production for local rice millers and a drastic reduction in Nigeria’s consumption of petrol, which was hitherto smuggled out to Benin where the price is higher.
However, more striking was his statement that the closure has supported the agency with increased revenue as goods coming into the country now pass through the country’s busiest ports.
According to Ali, since the closure of the border, the agency has seen increased revenues. This, he explained, was contrary to his fears that the closure would lead to a fall in revenue for the agency.
“Since we closed the border, we have maintained an average of about N4.7 billion to N5.8 billion daily which is far more than we used to collect,” he said.
According to him, most of the cargoes that were hitherto shipped from other countries to the Benin Republic, discharged and then smuggled into Nigeria, are now being forced to go through Apapa or Tin Can Island Port where the agency can collect duty on them.
“If the closure can continue, for us it is a welcome situation because as a matter of fact, we are seeing increasing revenues as a result of the closure,” Ali told the joint National Assembly Committee on Finance working on the 2020-2022 Medium-Term Expenditure Framework and Fiscal Strategy Paper.
The fact
To verify the authenticity of this statement, BusinessDay fact-checked Ali’s claim using available data obtained from the Central Bank of Nigeria’s economic report for the third quarter.
The data show that revenue generated by Customs declined by 1.94 percent to N210.77 billion from N214.93 billion generated in the previous quarter.
A 1.9 percent fall is contrary to claims by Customs blowing the trumpet of an increase in revenue owing to the border closure.
For the records, the CBN data covered three months from July to September. The border closure started on August 20, which is about halfway into the period covered by the report.
There were nine working days left in August after the directive since payments are made to the bank and not directly to Customs. Similarly, there are 21 working days in September. This gives 30 working days.
BusinessDay multiplied 30 days with the N5.8 billion that Ali claimed the agency generated daily to arrive at N174 billion for the 30-day period.
The above figure appears unrealistic seeing that the agency generated a total of N210.77 billion for the three months, July-September 2019.
So, Ali’s claim on Customs generating daily revenue as high as N4.7 billion to N5.8 billion shows that his math does not add up. Given that the agency generated N210.77 billion in the quarter, if it actually generated N174 billion after the border closure, it would mean that it generated N36.77 billion in the period July 1-August 19, which is most unlikely.
Conclusion
Since data obtained from the CBN, an agency of government that over time has been a custodian of statistical data, show otherwise, BusinessDay concludes that Ali’s claims should be taken with a pinch of salt.
