Five reforms to expect as $3.2bn e-Customs project begins

On May 30, 2022, the Federal Government, through the Nigeria Customs Service (NCS) signed a $3.2 billion Customs mordernisation project concession agreement with Huawei and the African Finance Corporation (AFC).

The concession, which would be fully financed by AFC and has Huawei as the lead technical service provider, is aimed at modernising and providing ICT infrastructures for Customs operations.

It does not cede the core functions of the NCS to private operators, rather it seeks to modernise Customs processes and reduce evasion of duties as well as smuggling.

As businesses including port users, operators and manufacturers await the commencement of the newly signed modernisation project, there are five critical reforms that the e-Customs project is expected to introduce in ports and other aspects of Customs operations in Nigeria.

Comprehensive automation of Customs processes

Although the NCS has evolved in the use of technology for several years now, not all of its operations are automated. The technological evolvement of Customs processes started with the pre-ASYCUDA era, with the introduction of ASYCUDA 1, followed by the upgrading to ASYCUDA 2.0. NCS introduced NICIS 1, after which it moved to NICIS 2, which is where it is today.

This shows that several managements of NCS have deployed user-friendly systems that are accessible by importers and agents. However, users believed that the system can only get better.

To actualise this, Customs brought in Huawei to introduce a comprehensive hardware and software technology that would further automate other Customs processes.

Expected to be accessible on the web and mobile apps through the Customs website, the modernisation of Customs operations will ensure better policing of the nation’s borders and help in better monitoring of import and export.

It is an end-to-end electronic flow of Customs processes, which would serve as a paradigm shift from paper or manual work processes to automated flows.

Removal of multiple alerts on cargo

Importers and their agents have been complaining of multiple alerts and several other interventions on their either released or already examined containers at the port. These alerts cause delays that hinder importers from taking delivery of the consignments as and when due.

This is one of the major issues the e-Customs project is expected to resolve by creating an efficient audit mechanism.

Timi Bomodi, national public relations of NCS, said with the e-Customs, cargo examinations and release of import/export goods would be subjected to live feeds across multiple platforms.

This, he said, would enable different units of Customs to know the state of every import and export being examined or released at the port.

He said it would curb arbitrary decision-making at all levels and also guide interventions.

“The Service has been working with Webb Fontaine as technical partners from the ASYCUDA era to NICIS. As technical partners, all they did was manage our ICT infrastructure that focused on enhancing user interface and user experience on imports/exports. Yet, many aspects of the Customs job are still not automated. As efficient as NICIS-II is, it still has limitations, which the e-Customs would further address,” he said.

Creates single monitoring system for factories

Beyond revenue collection from import and export goods at the port, another source of Customs revenue is taxes paid by manufacturing companies on goods produced in-country. This function of Customs is called excise operation.

Currently, the excise operation of Customs is mostly done using analogue means. This is because the infrastructure needed to automate this process is massive.

But with the e-Customs, Huawei is expected to provide the technological backbone for the automation of Customs excise operations.

According to Bomodi, the agreement will see to the upscaling of all excise monitoring activities by bringing them up to par with what happens on the import and export side at the ports.

“It will connect factories across the country and create a single monitoring system that checks daily production. It will also help to monitor taxes using more sophisticated platforms like telecom operations,” he added.

Read also: Nigeria to earn $176bn from modernisation of Customs’ operations- ICRC

Automates escort operations of Customs

Escort operations of Customs for goods in transit are an example of a Customs job that is still not automated.

Today, according to Bomodi, because of a shortfall in manpower, requests for escort take quite a while before approval, and this causes a serious delay in the delivery of transit containers.

“With an automated e-tracking system, which the e-Customs project will provide, the delays will be things of the past. The same thing is applicable for border management and control as well as interface with other government agencies,” he said.

According to him, Customs is moving into an era of high efficiency, which can only be technologically enabled.

Increases Customs revenue

The e-Customs project lays emphasis on making Customs processes and procedures more efficient. Its modernisation covers all the activities of a Customs administration.

It is expected to greatly enhance trade facilitation through achieving efficient service delivery.

An efficient system will attract more users, and more users will translate to more revenue for the government and the whole industry will be better off for it.

According to Hameed Ibrahim Ali, comptroller general of Customs, about $176 billion in revenue will be generated into the coffers of the Federal Government within 20 years through its e-Customs project.

He said that the e-Customs will quadruple Customs’ current N210 billion monthly revenue collection.