Concerns Mount Over Concession of Nigeria Customs Revenue Functions to China
It is no longer news that the Federal Government has concessioned the revenue functions of the Nigeria Customs Service to a private firm, Africa Finance Corporation (AFC) and managed by a Chinese firm; Huawei Technologies Limited under a 20-year concession window.
Since the announcement was made last week, maritime operators have been expressing divergent opinions and concerns about the e-Customs concession project.
The latest is coming from Dr Eugene Nweke, former President of National Association of Government Approved Freight Forwarders (NAGAFF) in a statement sent to DAILY TREND.
Dr Nweke wrote;
RE:CUSTOMS SIGNS MODERNIZATION PROJECT CONCESSION AGREEMENT TO FACILITATE TRADE – NIGERIANS ARE STILL ASKING FOR CLARIFICATION OVER PERTINENT QUESTIONS AND ISSUES OF NATIONAL CONCERNS:
In response to the various journalists that sent sms and whatsapp text asking for my position on this latest development, below is my take:
First I subscribe to any value addition tool targeted towards trade facilitation, provided that the motives and objectives behind value addition are desirous and worthwhile, also provided the applicable processes and procedures were conducted in a very transparent, due diligent and accountable manner.
Permit me to say that, I observed and laughed when, the strong anti e-custom modernization projects voices in the National assembly in 2020/2021 seems to have suddenly lost their “nay” voices as the “iees have it” and they turned “eyes right ” as written and published by one of the critical actor.
Here again, the agency function so concessioned, is not a one man enterprise, but a public agency, as such Nigerians has a right to know how did and when was the biding process advertised and who are the bidders and what criteria was used to arrived at the choice of Chinese firms?.
The Law makers should answer and please explain to Nigerians.
Also, may I state the obvious, the present scenario became possible due to the absent of a seasoned Career Comptroller General of Customs. I can bet you no Career officer, no matter how unintelligent and corrupt he may be would accept nor succumb to the concessioning of any aspects of the Customs functions or operations.
Can I ask you: Do you the level of silent fight that has been deployed over the years to resist this temptation trading off the Customs functions, starting with the CROWN AGENT?. Do you also know the number of msilent fight deployed to wrestle back the Customs functions from the Pre-shipment cum Destination Inspection Agents ? I can tell you better, because a lot of us were involved, and to say that much has gone in. When I say fight, I refer to consultation, advocacy and constructive engagements, with facts and figures.
The Federal Executive Council wisdom is not under probe here, but they are also prone to mistakes because they always acts on what was presented before it by the miniaters, most times they are not in position to conduct a background check or unravel the vested interest in a given contract packaging. It relies solely on it related agencies.
Notwithstanding, the only vexation in that report that got me gilted , is the following two credited remarks aimed to hype and give credence to the Concession signing ceremony:
1. “The Comptroller-General of Customs, Col. Hameed Ali (rtd.) said the implementation of the project will generate a revenue of $176 billion over the next 20 years.
Ali who disclosed this in Abuja said, the e-Customs concession project would ease the cost of doing business, boost revenue, enhance productivity and put a stop to every arbitrariness in the service.
He said, “The $3.2 billion e-Customs project to be financed by the Africa Finance Corporation (AFC) and managed by Huawei Technologies Limited under a 20-year concession window, when fully implemented, will quadruple Customs’ current N210 billion average monthly revenue collection.
While appreciating Huawei Technologies Limited for their partnership, he noted that the NCS is becoming fully digitised”.
I am surprised that all previous efforts by the past administration and the incumbent were aimed at halfly and not to fully digitalise the NCS abinitio , except now.
In that case, there is need to set up a commission of enquiries to review the Customs Modernization Process and related contracts from year 2001 to date.
However, My simple take to the CGC on this matter, will be as officially communicated by the NAGAFF Headquarters in 2020 ( please see item 1-3 below extracts from the letters, especially item 3).
2. “The Acting Director-General of ICRC, Michael Ohiani, described the project as revolutionary, adding that it would bring digital smart processes and procedures to customs operations.
“This is a migration from analogue to digital. We urge the concessionaire to stick to the rules of engagement as we will be monitoring the project every step of the way,”.
MY TAKE :
This is yet another shocking statement credited to the Acting Director General of the ICRC. As inferred here, I never believed that, all along the NCS has been wasting the tax payers funds, going front and back, but dwelling strongly on analog imports and exports trade tools applications .
Perhaps, if by his submission here, that: ” This is a migration from analog to digital ” is based on an informed position, then there is urgent need for the veracity of the automation processes in the NSC as written and published by DC Omale in his “Nigeria Customs Service- An Overview” ( Customs Monthly Order October Edition 2012, Page 27):
” DEVELOPMENT OF e-CUSTOMS THROUGH ASYCUDA:
The development of the ASYCUDA project was intended to ensure a smoother, fast and transparent goods clearance process. To this end the service under the period developed the following electronic (e-) applications to boost the ASYCUDA operations:
■ e-manifest. ■ e-payment. ■ e-remittance . ■ e-notifications ■ e-Government platform for single window to stakeholders in international trade. ■ e-release. ■ e- provision of NCS National Private Telecom Network ..”.
The question will be, if the Acting Director General has done some due diligence checks and arm himself with adequate information about the NCS modernization efforts so far, and then under take a reevaluate the structures on ground, in relation to ascertaining if the NCS has actually achieved this e-applications or not. If yes, then at what costs? This to me, essentially formed the basis for Concession evaluations, considerations that rebirth a concrete terms and conditions.
In my opinion, the choice word ” analog ” was promptly used to show cause that nothing was found on ground, hence, the need to start a fresh e-custom modernization all over again.
Honestly, I WEEP.
To Conclude my position on the subject matter, I want to refer us to an earlier position stated by NAGAFF and to state clearly, that the position suffices, especially, item 2 is very critical to the whole essence, even though that, the Concession has been perfected and sealed:
1: UNANSWERED QUESTIONS BY THE FINANCE MINISTER AS WAS RAISED IN THE LETTER:
Firstly, recall that, in its official letter for clarification, written by the Nagaff Headquarters dated 5th September, 2020, the following contentious issues were raised and unanswerd questions was posited to the Honorable Minister of Finance:
” It is on the basis of these, that we wish to officially seek for clarifications on the above awarded contracts, recently approved by the Federal Executive Council as noted above, thus:
1. What Has Been The Administrative/Supervisory Roles Of Federal Ministry Of Finance On E-Customs Modernization Process And Its Impact To The Nigeria Customs Service & The Economy In General, Since 1996 To 2020 ?
a. In addressing the inefficiencies that bedeviled the Service in the early 70’s, Pre-Shipment Inspection Scheme introduced in 1979, later was backed up by legal agreement via Pre-Shipment Inspection Act of 1996 aka Decree No.11 of 1996. – Pre-Shipment Inspection Companies were paid a whooping sum of $70 to $75 million yearly for escalating trade malpractices, while the Service was partly paid less than #1 billion.
b. Within March to September 1999 Destination Inspection was retroduced, under a contractual agreement with Destination Inspection Agents (DIA’s), the essence was for a full computerisation and interconnectivity of the ASYCUDA to all stakeholders
c. On the 3rd July, 1997 FMOF signed agreement with the Economic Community of West Africa States ( ECOWAS) for the installation of Asycuda in Nigeria Customs Service Headquarters and Area Offices of Seaports, Airports & Border Stations. The Objectives of this agreement is hinged on e-customs modernization.
d. The contractor/consultant installed outdated 2.7 site instead of the 3.0 site paid for, prompt the need for upgrade to Asycuda 3.0 site .
e. 5 years after, the Asycuda agreement was not completed, out of the17 sites covered in the contract only 7 sites were installed, wherefore pursuance to the upgrading into Asycuda 3.0, UNCTAD estimated $2,950,000:00 for its components, and non UNCTAD components at $66,900:00. Noted that, the completion of phase 1 of the project between 6 – 8 months at the cost of $27,805,000:00. WAS THERE ANY SANCTION TO ECOWAS?
f. In June, 2001, a Presidential Committee, chaired by Federal Ministry of Finance was set up to review the Pre-shipment Inspection (PSI) Scheme, The Committee examined the objectives and mode operatons of the PSI.
g. In 2002, Government further commisioned Messed J.C.E. CONSULTING ASSOCIATE ( CROWN AGENT) to undertake a study on the Comprehensive Import Supervision Scheme (CISS) and Nigeria Customs Service for the purpose of disengaging the services of Pre-shipment Inspection Agents and enhancing revenue.
h. In June, 2002, a Specialized Technical Committee of Stakeholders was set up to review the Pre-shipment Inspection preparatory to re-introduction of Destination Inspection – DI.
i. In June, 2003, the Federal Government signed an agreement with MESSR’S COTECNA INSPECTION SA on the provision, installation and operation of 14 X-RAY SCANNERS on BOOT BASIS , at prescribed locations to scan all imports coming through the approved imports entry points. The 10 years contract also included the yearly training of 50 Customs officer on the computerized Risk Management System ( CRMS), to train 500 officers within the contract period of ten years. Again, the implementation was marred with several flaws and compromises.
g. Because of space consideration, the WEBB FONTAINE Contract with the government, still on e-customs modernization to install the optic server for the use of the Nigeria Customs Service Asycuda project will not be mention in detail, due to several noticeable intricacies.
j. In December, 2003, Federal Executive Council set up a presidential Committee on the Implementation of Destination Inspection and Asycuda, under the Chairmanship of the Honorable Minister of Transport.
k. In year 2012 to 2013, the Nigeria Customs Service self nurtured, developed and commenced the Pre Arrival Assessment Report -PAAR regime, and it received global commendations, even the World Customs Organization attested it as a model for Africa. Subsequently,n the Republic of Ghana took a cue and adopted same model. Since then, it has been a success story, all that was required was prompt consolidations and supervision. Today PAAR has since been upgraded to NICIS 2.
l. On the 16th November, 2019 at the graduation ceremony of the Senior course three of the Nigeria Customs Service at the command and staff college, gwagwalada, Abuja, the CGC Col. Hameed Ali (Rtd) announced that, the President has approved the development of electronic based Custom known as e-customs. Ostensibly, implying that previous e-customs modernization efforts inspite of the huge public fund deployed in it, is of no recourse. There is need for a proper definition of the term, e-customs modernization.
m. On the 20th December, 2019 the NTA reported you as saying that, the Federal Executive Council has approved the award of $10 Billion to Messrs Fore -Core Technology Solutions Limited under a PPP/ BOOT arrangement to manage the automobile registration automation and the issuance of exports/imports exemption certificates, under the auspices of the Federal Ministry Of Finance, Budget & Economic Planning. The firm is expected to earn 10% of the revenue to enable recoup its investment. We are wondering why such Customs functions can not be integrated nor find a place in the NICIS 2 platform, instead of contracting it out. Don’t you think that, this singular contract seemingly casts questions of integrity and relevance on NICIS 2 e-Platform?
n. On the 8th December, 2019, the suspension of the then controversial $300 Million Proposed contract for the e-customs modernization was reported, the noticeable intrigues was greeted by a public out cry that trailed the proposed contract, especially on the conflicting imputed contract values, and integrity of the promoters of the scheme, was overwhelming.
2: OTHER UNANSWERED QUESTIONS BY THE FINANCE MINISTER AS WAS RAISED:
Recall also that, in the same official letter for clarification written by the Nagaff, the following unanswerd questions was posited to the Honorable Minister of Finance:
a. In a situation where the Federal Government will be acquiring RAPISCAN CARGO MOBILE SCANNERS, operatonally cargo scanners are integral component e – automation /seamless integration for customs purposes. Since the Federal Government is acquiring RAPISCAN SCANNING MACHINES with public funds, we care to know what is the E-CUSTOMS HC PROJECT LIMITED be bringing to the table of reasonable value services ?.
b. Again, there is no attached milestone concession investment and recoupment plans, as concession are meant to attract foreign direct investment (FDI). It is pertinent for us to ask, if this concession merited or could be classified under the FDI status?.
c. What are the applicable financial indices and parameters usee for arriving at the projected revenue generation to the sum off $176 Billion.?. Presently the Nigeria Customs makes an average of a yearly revenue generation of #1Trillion × 20 years = #20 Trillion. However, it is not clear if the projections is monthly, yearly or daily or a 20 years cumulative projection based. We will appreciate if the detail contract terms and conditions be made available to us.
d. For emphasis, at what applicable foreign exchange rate forecast and costings, did your department cum the ICRC applied to arrive at project costs, especially the projected cumulative 20 years revenue generation of $176 Billion?.
3 . A MATTER OF INTEGRITY AND PATRIOTISM:
Furthermore, in another letter addressed to the Comptroller General of Customs dated 15th September, 2020, with subject heading: THINKING ALOUD ON THE CONCESSION OF THE E-CUSTOM MODERNIZATION, the NAGAFF Headquarters also expressed and counseled as thus:
“Knowing that your wealth of knowledge, experience and vantage position, can afford you access to global information, kindly verify the list of Countries that concessioned it’s Customs administration in the present dispensation globally. Other than concession some countries preferably out sources some aspects of operatons in which they lacked financial and technical capacity to cope with?.
Mr CGC, Ideally, the implications of a rated performing management who sudenly resort and gave into concoted benefits of concessioning its agency, which in reality is a mirage, to say the least, such action can be likened to an open admittance self administerative defeat by you and your management team.
To state the obvious, it is unbelievable that you and the perceived Professional
management team has resolved to toe the path taken by the Nigeria Port Authority in 2003 to 2006 following their acknowledgement of lacking administerative capacity in managing the ports, hence, the ports concession.
Permit me to lay credence to the report which noted that: One established, undeniable and constitutional facts is that, the citizens are actually the legal owners of public enterprises/agencies, but unfortunately the citizens having been conquered, lacks the ability or the incentive to monitor their hired agents (Officials). Whereby the hired agent, simply capitalizes on the citizens weakness to run a given public enterpprises in such a manner that he comonizes and treats the citizens as a subdued and unwise people.
It is a common place for the hired official, assigned to manage/run the enterprises, but rather goes on to use the agency as a cash cow or a launch pad to nurture its personal business empires aimed to maximize endless profits for selfish interests, while pretensousily positioning the enterprises as being potentially profit yielding.
Indeed such agents deploys and explores the antics of a “mafia manager”- merely a cannon folder via conspiracies of furthered interests which it calls consortium, invariably deploying the services of an International crooks who have a pedigree in propounding sophisticated graphs for economic, business and financial theories to the government.
They always achieve this selfish interests, by insider trading, political contacts and lobbying rather than the ideal administerative commitment, performance and capacity to raise productivity for an overall survival of the enterprise.
Unfortunately, under such scenario, the citizens ( who are actually the principal) finds it impossible to call them to order, because of the inherent deficiency in information, not being in position to query or interrogate the behavior of the hired agent, hence, the free-rider problem amongst the agencies officials abounds
Mr CGC, we have a duty to change the narrative towards prompt sensitization of the port stakeholders including the trading public. As it stands the Public has to understand the link between ” free market”, ” financial liberalization” and free-rider”. Wherefore, Industry concern with regards “controlling stakes” and of course the encroachment of our financial lending nation like China is increasing by the by day. A clear loud suspicion has been that, this modernization is a subtle take over of public assets under the pretence of consortium or concession by our lender China.
Mr CGC, It was reported that you and your management team were flown to South Africa to understudy the applicability of the said brand of concession cum modernization, by the so called consortium, which they undertook at the early stage of their seeking for your patronage and partnership”.
Hope this has answered all the questions and as well meets your reporting needs.
Thanks for your attention.
Fwdr (Dr) Eugene Nweke Rff Ksm.
Former National President Of Nagaff.
Head Of Research, Sea Empowerment Research Center LGT
CREFFPON – Enlisted Consultant.