Customs :Low Cargo, More Revenue

By Stephen Ubanna

Until December 26, 2017, there was no sign that the Nigeria Customs Service, NCS, could be able to generate a trillion naira for the government for the year. This is because of the low volume of cargo traffic into the nations seaports , airports and the land border stations.

More worrisome was the ban of 41 frequently imported high yielding revenue items from accessing the Forex market  by the Godwin Emefiele led Central Bank of Nigeria, CBN.  The items, which include rice, private airplanes and jets, steel pipes, textiles among others, according to Isaac Okorafor, acting Director, Corporate Affairs  had a transactions value of $20,000  per quarter and below  each.

The government may have approved  a  lower Forex concession rate to importers of other items  not on the banned list to encourage them  but that was how far it could go. The 2017 budgetary provision was said to have provided a soft landing to the NCS    by approving a benchmark of N305.00 to a United States dollar in calculating their revenues but luck was on their side as the  naira   repeatedly depreciated during the year to a miserable level of between N350.00 and N600.00 to the dollar before the CBN wielded the big  stick to intervene to stabilize the local currency .

It would be  recalled that the Customs had generated a scandalous N779.74 billion in 2016 as a result of the various  government fiscal policies, particularly the removal of 41 items  from  accessing the Forex market. Hameed Ali, a retired Colonel and  the Comptroller General and his management team  who were forced to go back to the drawing board  were said to have devised strategies to block areas of revenue leakages at the seaports, airports and land border stations as a way of bossting its revenue in 2017 and beyond.

Ali’s watch word was the Presidential mandate given to him to” reform, restructure and improve the revenue collection of the Service”.   He was said to have given a matching order to the Comptrollers to sit up.

Investigations by the Magazine shows that prior to the Comptroller General’s orders to the Comptroller’s, the country was losing billions of naira   from the seaports, airports and  land border stations monthly to fraudulent agents with their importers and their Customs collaborators.

Officials of the National Agency for Food and Drug Administration, NAFDAC, Nigeria Drug Law Enforcement Agency, NDLEA, Standard Organisation of Nigeria, SON,  other security operatives were also said to be part of the revenue loss because of their policies which  provided  soft landing for the importers to cheat the government .

The Comptroller General may have known that the government was losing billions of naira at the ports of entry and the land border stations  with  the  monthly recovery of millions of naira by Federal Operations Unit, FOU, across the country,  for the government. The FOU, Zone A, led by Comptroller Mohammed Uba Garba was said to said to have made the greatest monthly recovery  of such lost revenue for the government. The revenue were recovered from importers who had committed  offences ranging from wrong classification of their goods, transfer of value, to underpayment discovered during physical examination of impounded Containers or truck laden goods in the Command warehouse at Ikeja.

Also, many believe that Garba,  may have been a pain on the neck  on the Comptrollers at the seaports , airport and border stations in the south west by forcing them to do right thing instead of coming to his office to make demands in order to allow imports in which they have interest or any of the  big men at the Abuja Customs Headquarters  to go without being stopped by his men for proper checking .

The Comptrollers were said to have faced their work instead of visiting the FOU , Zone A , office to see Garba on any problem relating to imported goods through their area of jurisdiction  or put a call to him for fear that Ali, the Comptroller General may hear about it.

The Comptroller Genera was said to have set up a structure to monitor the movement of Comptrollers or call by the Assistant Comptroller Generals and Deputy Comptroller Generals on the Comptrollers for help. The fallout was that the Customs big boys at Abuja  were said to have kept away  from the Comptrollers to avoid  being queried by the Customs strong man. There are insinuations that the Customs helmsman has informants all over the Commands that brief him on what is happening.

This may  haveput the Comptrollers at the ssea ports and airport on their toes including the Comptrollers at the land border stations who think they could easily  collect money from rice importers and  allow truck loads to pass at night to perform.

The Customs boss, was said to have heaved a sigh of relief when information  started  filtering out from the  major revenue  generating Commands – Apapa, Tincan Island, Port Multi-service terminals limited, PTML, Onne, Murtala Muhammed International Airport, MMIA, Kirikiri Lighter Terminal , KLT, hase 1, and Oyo towards the tail end of 2017 that their monthly revenue  had  not gone below the target set by the management for them.

A source told the Magazine that when Ali  became convinced that the revenue  collection of the Service in 2017 would be  much better than that of 2016, he was ready to face Kemi Adeosun, the minister of Finance and President Muhammadu Buhari , to brief them on the activities of the Service for the year 2017.

Given the impressive revenue generation of the Service in 2017 which was put at N1.04tn, Ali, the Comptroller General, a source said was ready to face the western press to drum about the superlative performance of the Service. He may have changed his mind  due to pressing urgent office matters and therefore,  sent   Joseph Attah, a  Deputy Comptroller and the Service Image maker to represent him.

An elated Attah who may have spoken the mind of his boss  said the impressive revenue collection was made” possible  because of the strict deployment of  digital identification  method which enables officers  to identify  Consignment  such as vehicles using mandatory  vehicle identification number, VIN”.

He also disclosed that the ”declaration  on vessels increased  drastically  within the year due to  the  use of  digital application  to locate  vessels on Nigeria  waters  and request for payment  of appropriate  duties  as data of the vessels  were available through the digital platform which had a spillover effect on the revenue collection of the Service  during the year. Before now, vessels shedulled to discharge at Nigeria ports had discharged mid sea and diverted  to other ports in the West African sub-region. The greatest beneficiary was Republic of Benin. These diverted  goods, particularly rice, are smuggled to Nigeria through unapproved routes causing Nigeria loss of billions of naira annually.

It is not surprising why  Ali, the Comptroller General said ” As collections of 2017 had broken the  records of past collections, we look forward to 2018 or any future  management  breaking  the record in the  interest of the nation”.  The Customs Image maker said the N1.04 tn  generated by the Service  could have been higher but for  the lowering or total removal  of  duty rates on Agricultural projects from 12.54 to 11.1 percent.

Given an insider information, he  confirmed that the 2017  government fiscal policies had   reduced  Prefabricated Agricultural Green House from 20 percent to 0 percent,  Agricultural  machinery  from 10 percent to five percent and later 0 percent, Automotive  Industry project, SKD  vehicles from 35 to five percent and Concession  of one SKD to two fully -built FBU cleared  without payment  of 35 percent levy.

He noted that with the reduction  in the average duty rate, a decline  in revenue could  have occurred but for due diligence and ”tax collection per unit of cargo  which was increased by 15 percent by the government.

This is evident going by the revenue collection of the Commands which revenue collection were  not impressive at the first and second quarter of the year.  Uche Ejieieme, a Deputy Superintendent of Customs and the Command Image maker says the Command collected N287.6 billion between January and December of the past year. The figure, he said, represent 92.71 percent of the Command 2017 revenue target of N310.2 billion.

He disclosed that the Command generated that much because  Yusuf Bashar, the  former Comptroller of the Command had ” introduced  several reforms  in the entire administrative  and operational value  chain  which resulted  in the remarkable revenue collection”. According to him, ”part of the strategies  was on the issue of  due diligence  and professionalism  in documentations and examination of cargo”.

Many  believe that  Yusuf, the then Command Customs boss still have much to do in the Command to block all the areas of revenue leakage. A source told the Magazine that there is a syndicate that operates at the Command comprising of officers occupying strategic  positions, agents and other security operatives  who determines the amount to clear goods at the seaport irrespective of the approved clearing amount going by the government fiscal policies . The source disclosed that no Comptroller that had headed the Command had been able to break into the syndicate as they could make things difficult for the Comptroller to achieve the Command yearly revenue target.

The large number of Containers that had been impounded by both past and Roving team of the Federal Operations , Zone A, Ikeja, which had been traced to Tincan Island port and some bonded terminals under the Command speaks volume of the rot at the Command. An officer in one of the terminals told the Magazine that some of the Containers released from any of the terminals which fell into the waiting hands of FOU, Zone A, Roving team personnel should be blamed on the Tincan Island management. He disclosed that  that some of the officers in-charge of the terminals are under severe pressure from the the main office on particular Containers to release because of their pecuniary interest.

The Magazine took up the matter with Dantani, a Chief Superintendent of Customs, and the Command , officer in-charge of Bonded terminals , who exonerated the Comptroller from influencing any releasing officer at the terminals on how to go about his job.

The Magazine learnt that the importer decides where his Consignment should be taken to by applying to the Comptroller who could not on his own do it.