Trade Facilitation, Review Of Customs Modernisation Top Expectations From New Customs CG

On Monday 19th June, 2023, President Bola Tinubu retired the service chiefs, the Inspector General of the Nigeria Police as well as the Comptroller General of the Nigeria Customs Service (NCS), Col. Hameed Ali (rtd).

After the announcement, President Tinubu immediately announced replacements. In the NCS, the President approved the appointment of deputy comptroller general of Customs, DCG Wale Adeniyi, as the acting comptroller general.

Adeniyi’s appointment received commendation and applause from stakeholders in the sector who believe the appointment is that of a round peg in a round hole.

They argued that finally, the service has been returned to career Customs officers that understand the rudiment of the system, trade facilitation and also foster officers’ career growth.

Speaking on the appointment, the acting national president, Association of Nigerian Licenced Customs Agents (ANLCA), Dr Kayode Farinto, said Adeniyi’s appointment was a round peg in a round hole which  will make an impact in the Nigerian maritime sub- sector.

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Farinto said, “ We in ANLCA are particularly glad that our yearning for a career Customs Officer to be appointed the CG of Customs has been achieved. Remember,  ANLCA was at the 9th National Assembly during the amendment of the Customs and Excise Management Act (CEMA) where  one of our prayers was that the law  should make it mandatory for a career Customs Officer to be appointed as the Comptroller General of Customs and it was adopted and signed into law. We are grateful for what is happening in our eyes and we  thank President Tinubu for this feat.”

However, the acting Comptroller General of Customs must ensure further reform of the service, enforce trade facilitation, automation of Customs processes, increase ease of doing business and re-opening of land borders to Importation and revisiting of the Customs modernisation project.

Enthronement Of Trade Facilitation Rather Than Revenue Generation

In as much as the country needs Internally Generated Revenue (IGR), to provide basic infrastructure and Customs is pivotal to revenue generation for the country. This zeal to generate revenue has made Customs give revenue targets to their Area commands. However, in a bid to achieve the targets, the officers put everything in place including jettisoning trade facilitation.

Jettisoning trade facilitation has made Nigeria ports rank low on the Ease of Doing Business (EoDB) ranking. The poor ranking on EoDB is also responsible for diversion of cargoes to neighboring countries where they are being smuggled into the country through the nation’s porous borders.

The former statistician general of the federation, Yemi Kale, faulted the incentivising the Nigeria Customs Service to become a revenue-generating agency rather than facilitating international trade.

Kale said the federal government has created an incentive for Customs to drive revenue rather than trade by giving the service a percentage of the total annual revenue generated.

According to him, the government needs to change the wrong incentive given to Customs by giving the Service an incentive to facilitate trade rather than revenue.

“I do not believe in imposing taxes on businesses because when a government increases taxes beyond normal, the business in question would be forced to pass the additional cost on to the consumers. Rather than impose taxes on business, the government needs to block revenue leakages,” Kale said.

Ending Duty Benchmarking Policy

The acting Customs CG must automate the revenue collection processes of the service and put an end to benchmarking. Under the benchmarking policy, every 20ft or 40ft container pays a uniform duty rate irrespective of the value as contained on the invoice.

Importers and customs agents argue that the prices of goods in the international market depend on negotiations outside the advertised online price tags.

Speaking on the policy, former president of the National Association of Government Approved Freight  Forwarders (NAGAFF), Dr Eugene Nweke, said the policy exposes the customs service as toeing the line of illegality and unprofessionalism for the sake of more revenue generation.

Nweke argued that this was without considering the consequences on Nigerians since importers will introduce higher prices to recoup their investments. He argued that the policy throws to the wind professionalism and expectations of the valuation officers whose responsibility is to calculate duties based on the value of the goods before them.

Nweke, while condemning the decision said it will trigger inflation and bring more harm to the ailing economy than good. He called on the CGC Hameed Ali to save Nigerians from such hardship by halting the policy of benchmarking.

Also speaking, the managing director of Procter and Gamble Nigeria, Mokutima Ajileye, said dealing with the Customs has been difficult.

According to her, manufacturers have situations where they import a product under a certain HS-Code only for it to get to the point of clearing at the port, the Customs will say that is the wrong HS-Code.

“Then, the product will be held at the port while the importer tries to resolve the HS-Code issues but at the end of the day, the manufacturer will be forced to pay demurrage and rent to the shipping company and terminal operators,” she explained.