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Cargo tracking: How personal interests hinder Nigeria’s border security

Cargo tracking: How personal interests hinder Nigeria’s border security

Nigeria’s quest to secure its borders through an electronic system of tracking and monitoring cargoes and other vessels faces a complex hurdle, hampered not only by external threats but also by internal challenges.

While the country grapples with militant groups and transnational crimes, a less visible foe lurks within the system itself: the influence of personal interests.

20 years after the federal government first mooted the idea to revolutionise tracking and monitoring of cargoes destined for Nigerian seaports, there are concerns the scheme is yet to fully take off, on account of high-level horse-trading, corruption scandals, and rivalry between government ministries and agencies.

Q: “Aside from the billions of naira that could accrue to the Nigerian government in revenue from cargo tracking on the country’s borders, which are currently missed, the electronic system also allows Africa’s biggest oil-producing country to monitor its exact quantity of daily crude oil exports and tame the menace of oil theft.”

The scheme, known as the International Cargo Tracking Note (ICTN), is an electronic cargo verification system that monitors the shipment of cargo across borders, particularly seaborne cargo, and enables a real-time generation of vital data on ship and cargo traffic in and out of Nigeria, a government memo says, emphasising national security and economic benefits.

Aside from the billions of naira that could accrue to the Nigerian government in revenue from cargo tracking on the country’s borders, which are currently missed, the electronic system also allows Africa’s biggest oil-producing country to monitor its exact quantity of daily crude oil exports and tame the menace of oil theft.

The move to put in place a tracking system in Nigeria has been thwarted at different times since the idea was first muted under the administration of former President Olusegun Obasanjo in 2004. Since then, the scheme only worked for less than two years before it was halted at two different times.

Several confidential government memos and extensive interviews with insiders familiar with the matter and industry insiders attribute the dilly-dallies in the implementation to official corruption, the fight over control, and the quest to corner what is described as a lucrative job among contractors and top government officials.

In May 2007, the Federal Ministry of Transportation (FMOT) directed the Nigerian Ports Authority (NPA) to study a proposal prepared by a consortium, Ports Management System Company Limited (TPMS)-Antaser.

The TPMS, a company owned by a Beninese businessman, the late Jean Codo, had partnered with a Belgian maritime firm, Antaser Afrique, to form the consortium.

  Late Jean Codo, owner of TPMS

With the change of government later that month, the initiative was mired in bureaucratic bottlenecks, taking over two years before the Federal Executive Council (FEC) approved the NPA to work with TPMS-Antaser for the implementation of the scheme on March 5, 2010.

Two sides signed on to a sharing formula of 60:40 in favour of the NPA representing the federal government.

The scheme was, however, suspended and abolished on October 10, 2011, by the Presidential Task Force on Port Reforms, chaired by Ngozi Okonjo Iwela, the then-minister of finance and coordinating minister of the economy.

Ngozi Okonjo-Iweala, Nigeria’s former minister of finance

In her book, Fighting Corruption is Dangerous: The Story Behind the Headlines, Okonjo-Iweala, who also chaired a presidential committee on port reform, recalled how some importers complained about duplication of charges due to the CTN project.

She said importers were particularly irritated about the CTN regime because they argued it added costs to them for duplicated services.

“They said their cargos were already being tracked by the Nigerian Customs Service from origin to destination, so there was no reason for the NPA to collect these charges,” she said in her book.

“Upon inquiry, we learned that charges totalled about $6 million. I had never seen this money remitted to the Treasury.

“Clearly, the $6 million from the Nigerian Ports Authority from the cargo tracking note not being remitted to the Treasury must be going into some influential pockets,” she wrote.

Unremitted government revenue

BusinessDay gathered that over €45 million was remitted for onward transmission to Nigeria via TPMS; however, there are allegations that the funds were not remitted as expected.

“We remitted a total of €45,590,618 for onward transmission to Nigeria via TPMS. Later on, we discovered that the funds were not remitted as expected,” an Antaser memo sent to the office of the managing director of NPA dated January 8, 2016, said.

It added, “We have the transfer evidence and would be ready to tender the same on request.”

This development prompted the Belgian maritime firm to float a hundred million in the capital base of Antaser Nigeria with the intention of working directly with the government of Nigeria.

“Our proposal was sent directly to the then minister of transport, and we were invited for a presentation in 2013 in the presence of the Hon. Minister, the NPA, the Shipping Council, and some directors of the ministry,” the Antaser memo said.

Documents reviewed by the EFCC showed the NPA constituted a committee to verify the revenue that accrued from the cargo tracking note scheme.

The report showed that from the commencement of the scheme in March 2010 to the time it was halted in November 2011, the sum of €16,692,642.20 was realised.

The sum of €10,015,585.32, representing 60 percent, was due to the federal government, but only €6,388,415.15 was remitted to the federal government; a total of €3,627,170.12 was unaccounted for.

“The remitted fund of €6,388,415.15 was deposited by NPA into its First Bank Plc account number 2015299613, named NPA Tracking Note, but sometime in August 2012, the NPA directed First Bank Plc to transfer the funds to First City Monument Bank (FCMB) account number 0129432143, named Nigerian Port Plc,” the EFCC document said.

“The NPA failed to transfer the fund to the Treasury single account on the excuse that the Accountant General of the Federation did not provide it with a Euro account. Consequently, the commission directed FCMB to transfer the funds to the EFCC Euro account domiciled with the CBN, from where the funds were transferred to the federal government,” the document explained.

The EFCC report, submitted on February 6, 2018, indicted the TPMS and Jean Codo, its managing director, for cornering parts of the proceeds of the scheme to the tune of €3,627,170.22.

“The managing director of TPMS, Jean Codo, stated that TPMS owes the federal government the sum of €3,627,170.22, while the director of finance, Yushua Mohammed Ahmed, informed that the sum of €2,000,000.00 was used to fund the primary and general elections of former president Goodluck Jonathan, while the rest was shared with the Senate and House of Representatives’ Committees,” according to an EFCC report signed by Ibrahim Magu, the then acting executive chairman of the commission.

It added, “The managing director of TPMS, Jean Codo, has undertaken to refund the balance of €3,627,170.22 belonging to the federal government.”

On May 21, 2020, Codo, who was also being investigated for alleged €29 million fraud by the EFCC, died at the Kirikiri prison in Lagos.

Power play and clash of government ministries

A transport ministry memo of August 26, 2021, to the Bureau of Public Procurement says that non-engagement with the scheme would continue to cause the country loss of revenue, worsen the country’s maritime security situation, and allow alteration of cargoes and under-declaration.

BusinessDay’s findings showed top government functionaries fought to win lucrative contracts to exert their influence, leading to duplicate efforts and policy summersaults for the next few months.

Ibrahim Gambari, former chief of staff

Donnigton Nigeria Limited, a Nigerian company, wrote a proposal to former president Muhammadu Buhari, through his then chief of staff, Ibrahim Gambari, for the re-introduction of the cargo tracking note service.

In the four-page letter dated January 19, 2021, the company reminded the Nigerian government of its international obligation to put the tracking system in place, as well as the loss in revenue due to its absence, while pledging to share proceeds in a 60-to-40 ratio in favour of the government if it is appointed to serve as the consultant for the scheme.

On August 19, 2021, Rotimi Amaechi, former minister of transportation, obtained interim approval from Buhari for the engagement of two companies, Medtech Scientific Limited and Rozi International Nigeria Limited, as consultants for the cargo tracking contract.

But “surprisingly,” the Bureau of Public Procurement (BPP) noted in a memo, the transport ministry on August 26, 2021, reverted to the public procurement regulator with approval dated August 19, 2021, from the president to adopt direct procurement in favour of MedTech Scientific Limited, a healthcare company, in partnership with Rozi International Nigeria Limited, a property development company.

Direct procurement is single sourcing of a contractor with no room for competition either in a selective exercise, which invites interests from a restricted number of companies based on experience and capacity, or an open exercise, which is publicly advertised for companies to express interest and compete.

Months later, Amaechi accused Gambari, the then chief of staff, of interference with the procurement process on the adoption of an international competitive bidding exercise to engage contractors for the international cargo tracking note scheme, domiciled in the Nigerian Shippers’ Council under Amaechi’s supervision.

In a memo dated October 14 and addressed to the former president, Buhari, Amaechi said Gambari, the then Chief of Staff, had consistently sought to impose his interests on issues relating to procurement processes in his ministry.

Making it official that he had evidence that the then Chief of Staff was not acting in the public interest but to benefit from the contract through proxies, Amaechi told Buhari that Gambari’s daughter, Bilkisu Gambari, approached him for the contract.

“I am particularly concerned that his opposition to my ministry’s initiatives in respect of the ICTN Scheme has increased in tempo after the visit of a certain Miss Bilkisu Gambari, at his behest, to my office with her partners to solicit for the award of this same ICTN contract—which request was not granted,” Amaechi said in his letter to the President.

“It would appear to me that it is the desire to satisfy multiple partners such as those referenced above that has led to the Chief of Staff’s continued advocacy and advice that this sensitive contract be split into several tranches with multiple service providers—even against standard practice in several jurisdictions.

Data sourced from the Corporate Affairs Commission showed Bilkisu Gambari is one of the directors of Donnigton Nigeria Limited.

Antaser Afrique BVBA emerged as the winner

On February 15, 2023, the federal government announced Antaser Nigeria Limited/Antaser Afrique BVBA, a Belgium-based company, and other local companies such as MSSRS Velocity Logistics and Marine Services, Saham’s Crystal Investments Limited, Winslow Logistics Limited, and Equal Logistics Limited as preferred winners for the installation of electronic cargo tracking notes for seaports nationwide.

“Surprisingly, the contract was awarded jointly to the five companies rather than to the lead technical partner, as is normally the case in direct procurement,” a source who was part of the bidding process said.

The concession is for a period of 15 years to enable the investors to recoup their investments between 12 and 15 years.

It is expected that this scheme will generate revenues to the federal government ranging from about $90 million per annum to a peak of about $235 million per annum in direct revenue and much more in indirect revenue,” Mu’azu Sambo, the immediate past minister of transportation, said at the end of a Federal Executive Council meeting.

The revenue sharing formula will be 60–40 percent, with the FG taking the greater share.

The public-private partnership, Sambo said, will enable the tracking of oil exports and “eliminate oil theft” that has cost the government billions of dollars.

Sambo said the project implementation comes at no cost to the government as the investments are from private sector companies.

Despite FG’s approval, the cargo tracking note has yet to be implemented.

BusinessDay’s findings showed the implementation of cargo tracking notes is yet to begin despite receiving approval from the previous administration of President Muhammadu Buhari.

In March, the House of Representatives expressed displeasure over the failure of the management of the Nigeria Shippers Council to commence implementation of the International Cargo Tracking Note.

“Why haven’t we started implementing the ICTN? What are we waiting for? Why are we allowing Nigeria to lose so much revenue and not doing anything?” Abdussamad Dasuki, chairman of the House Committee on Shipping Services, said.

While responding, Pius Akutah, executive secretary of Nigeria’s Shipping Council, however, assured the committee that plans for the takeoff have been concluded.

“It is important that we commence implementation of the ICTN not only because it is an economic facilitation tool, but also because it is also a revenue generation platform for this country; it’s one good that will be coming to Nigeria through the ICTN, and besides that, it will also tackle some of the security challenges that we face as a country today because we will know from the onset what kind of cargoes are coming to the country, and then it will also ease business, reduce the time spent, and bring about multi-efficiency,” Akutah said.