FG finally concessions Nigeria Customs — as FEC approves $3.1bn for automation processes.

Abiola Seun /Peter Adeniyi |

In what appears as a discreet concession of the Nigeria Customs service by the Federal government and utter disregard for stakeholders’ opinions on the issue, the Federal Executive Council (FEC) on Wednesday approved $3.1bn for the service’s automation operations.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, made this known to State House correspondents at the end of the virtual meeting of the Council, presided by President Muhammadu Buhari, in Abuja.

Ahmed, said the approval for the e-Custom modernization project followed a memo she presented to the Council.

She said: “The purpose of the memo we presented to Council was for a project that will enable the complete automation of the Nigeria Custom Service processes and procedures using the application and information and technology in all aspects of Customs administration.’

According to the minister, the main objective is to completely automate every aspect of the customs business and institutionalize the use of smart and emerging technologies to enhance the statutory function of the NCS in the area of revenue generation.

She revealed that the project would be financed through Public Private Partnership (PPP) under a concessionary period of 20 years.

“So, Council today ratified Mr President’s approval for the PPP concession for a 20-year period to Messers E-Customs HC Project Limited as a concessionaire for the delivery of customs modernization project.

“This is a project that will not have an immediate cost to the government, the investors are providing all of the financing and this revenue will be deployed in three phases and they will look over the investment in the concessionary period of 20 years.

“The key point is that it is not costing the federal government one thing, the 3.1 billion dollars being proposed will be sourced by the sponsors and the partners,’’ she said.

The minister said the federal government targets $176 billion revenue generation from the project.

She further said the project would enable the complete automation of the NCS processes and procedures using the application and information and technology in all aspects.

The minister said the PPP group approved for the project are led by Messers Y Technologies with four other members.

“The committee that led this process also looked at the National Trade Impact process that has been going on for years and confirmed that the Nigerian e-customs project is a subset of the National Trade Impact and would prefer the Nigerian Customs to play it’s lead role in the national trading platform.

“The Bionica Technologies West Africa Limited, Bargain Securities and Supplies Nigeria Limited, are lead sponsor and co-sponsor. We also have The Africa Finance Corporation (AFC) as the lead financier and Huawei Technology as a technical service provider.

The minister said the Nigeria Customs Service currently has some level of automation services.

“This is an end to end automation of all of Nigeria’s Customs Service processes and it’s going to bring huge value to the country.

“So, this investment of $3.1 billion is broken down into capital investment of $1.2 billion which will be done in three phases over 36 months by these investors and $1.1 billion is our projection of the operational cost over the 20-year period of the implementation of this project.

“This project has the potential to yield up to $176 billion of revenue for the project and the consortia that are providing this investment are going to be paid over time according to the schedule that is negotiated for their investments including their profits and cost.

“So, this is the best possible way for Nigeria to roll out important capital projects using funds from the private sector and providing service for the use of Nigerian people and the government,” she said.

When implemented, the e-Customs Project would encompass, among other things, the deployment of e-Customs Production Applications including Production Applications include e-Clearance, e-Port System, Risk Control Centre (RCC), Logistics Management System (LMS), Electric Cargo Tracking System (ECTS), Intelligent Gate (i -Gate) and Mobile Enforcement (ME).

Stakeholders believed that the automation drive, as laudable as it sounds, was a smart way of concessioning the Customs the private business interests which will recoup their investments under the programme for 20 years.

“Yes, you are correct if you call it Customs concession programme.

“Under the PPP arrangement, the concessionaires, as I will describe them, led by E- Customs HC Project Limited, will source for the capital($3.1b)to fund the project which they will recoup within 20 years.

“During this period, they literally own Customs as they will be in full control of its revenue generation.

“It is just like how NPA concessioned its terminals to private investors” a knowledgeable source close to the Customs claimed