NCS CG gives Q1 2024 Report

…Says Exchange rate adjusted 28 times; Ports cargo throughput drops by 4.89%; Generates N1.3 trillion; Commends Staff

By Abiodun OBA

The exchange rate utilised by the Nigeria Customs Service in the clearance of goods, which is determined by the Central Bank of Nigeria (CBN), was adjusted 28 times in the first quarter of 2024.

The Comptroller General of the Nigerian Customs Service (NCS), Adewale Bashir Adeniyi, on Wednesday, disclosed in a First Quarter Briefing on Wednesday.

This is even as the CG said that the cargo throughput at Nigerian ports declined by 4.89 percent in the first quarter of 2024 while the Service collected N1.3 trillion in the first quarter of 2024.

According to the Customs CG, “In the first quarter of 2024, the NCS demonstrated remarkable performance in revenue collection. Total revenue collected during this period amounted to NGN1,347,675,608,972.75.

“The collection for the first quarter represents a substantial increase of 122.35 percent compared to the same period last year, where NGN 606,119,935,146.67 was collected.

“Month-by-month analysis further illustrates the Service’s impressive growth trajectory. In January 2024, revenue collection surged by 95.60 percent, reaching NGN390,824,148,326.55 from NGN199,809,974,327.52 recorded in January 2023. This upward trend continued in February 2024, with a staggering 138.68 percent growth, elevating revenue collection to NGN450,209,267,557.15 from NGN188,625,011,386.87 in February 2023.

“By March 2024, the revenue collected by NCS revenue grew by 132.76 percent from NGN217,669,949,432.28 to NGN506,642,193,019.05.

“When compared to the Federal government’s annual revenue target of NGN5.07 trillion for the NCS to collect in 2024, the target translates to a monthly revenue target of NGN 423 billion. We are pleased to report an average monthly revenue growth of 6.2 percent over the set monthly target and a cumulative revenue collection of 18.6 percent equivalent to NGN78,675,608,972.75 over the set quarterly target of NGN1.269 trillion.

“In the area of suppression of smuggling, the Service in the first quarter of 2024, recorded a total of 572 seizures, encompassing various items valued at NGN10,593,099,654.50 in Duty Paid Value (DPV).

“Notably, January saw 111 seizures amounting to NGN842,992,751.50 in DPV, while February marked the highest seizure numbers of 432, totalling NGN3,704,703,350.34. Rice constituted 39 percent of the seizures, followed by petroleum products at 26 percent, with motor vehicles and textiles accounting for 9% and 6% of the seizures, respectively.

“During this period, the NCS detained 22 suspects, and appropriate legal measures will be taken in accordance with the Nigeria Customs Service Act 2023.

“In the area of trade facilitation, despite inherent challenges, we have diligently worked towards streamlining processes, minimizing bottlenecks, and optimising efficiency across our ports to ensure seamless trade transactions.

“In First Quarter 2024, the NCS processed a total of 311,492 Single Goods Declarations (SGDs) for imports, reflecting the volume of import transactions handled. This figure indicates a decrease compared to the total volume of 327,491 processed in 2023 and 403,233 SGDs in 2022.

“Regarding export transactions, a total of 10,786 SGDs were processed in 2024 compared to 9,752 transactions in 2023, representing a 10.60% growth in export activities. Notably, a significant portion of this growth occurred in January, with 4,067 transactions processed in 2024 compared to 3,352 SGDs in 2023, marking a 29.69% increase. The Service is particularly interested in the growth of the non-oil export sector, aligning with the priorities of the President Bola Ahmed Tinubu-led administration and the initiatives pursued by NCS in recent times.

“On our challenges, during the quarter, the NCS encountered several systemic challenges that impeded our ability to fulfill our statutory responsibilities effectively. These challenges encompassed issues related to non-compliance with regulations, infrastructure limitations, and a notable decline in cargo throughput, evidenced by a 4.89 percent decrease in the volume of transactions handled.

“Additionally, significant fluctuations in exchange rates applied in the Customs clearance of consignments posed considerable difficulties. As per protocol, the exchange rate utilised by Customs in the clearance of goods via the Nigeria Integrated Customs Information System (NICIS) is based on the rate determined by the Central Bank of Nigeria (CBN).

“In the last quarter, a total of 28 rates were directed by the CBN, ranging from NGN 951.94 per USD 1 in January 2024 to a peak of NGN 1,662.35 per USD 1 in February 2024. While a singular exchange rate of NGN 951.94 per USD 1 was maintained in January, February witnessed 15 different spot rates ranging from NGN 951.94 per USD 1 to NGN 1,662.35 per USD 1. March saw a total of 13 different spot rates applied, ranging from NGN 1,303.84 to NGN 1,630.16.

“These fluctuations resulted in an average applied exchange rate of NGN1,314.03 per USD 1 in the clearance of Customs goods during the quarter.

“The repercussions of these fluctuating rates have sent concerning signals to our stakeholders, affecting and disrupting activities. Beyond the speculation regarding potential gains it may have on NCS revenue, the implications on transaction volumes are significant and outweigh any possible benefits. These concerns are already manifesting in current activities, with the potential for lagged effects in the coming months.

“Mindful of these implications on the trading public and the overall economy, the NCS, with the support of the Honourable Minister of Finance, has initiated periodic consultations with the Central Bank of Nigeria (CBN) to mitigate the potential impact of exchange rate fluctuations on import activities.

“The relative stability in the past days can be attributed to the interventions of the Honourable Minister of Finance and the Governor of the CBN.

“Furthermore, the NCS encountered non-operational challenges stemming from deliberate attempts by malicious actors to undermine the reputation of the Service. It is crucial to underscore that the NCS remains resolute in addressing genuine, evidence-based observations, as we have consistently done in the past. Constructive, fact-based criticisms channelled through appropriate means are always welcomed by the Service, as they keep us vigilant in fulfilling our commitment to the crucial responsibilities entrusted to us.

“Despite these challenges, we are steadfast in prioritizing transparency and accountability in all our operations, reaffirming our dedication to serving with integrity and excellence.

“Additionally, I want to draw the public’s attention to recent attacks on some of our officers and relevant provisions of the Nigeria Customs Service Act. Section 239 imposes penalties for armed or bodily assault of an officer, including threats or any form of aggression. Conviction for this offense can result in imprisonment for up to 10 years. I urge members of the public to conduct their business with officers in a cordial and mutually respectful manner. Officers have also been cautioned to uphold professionalism and restraint in their interactions.

“Moving forward, the NCS is actively implementing various measures to address these challenges. One notable initiative is the integration of geospatial technology alongside the utilization of satellite imagery and artificial intelligence tools and techniques.

“These efforts were initiated upon assuming office to combat the longstanding issue of smuggling and enhance the NCS’s enforcement capabilities for effective monitoring of our extensive 4,000 km borders.

“Additionally, this initiative will establish a command and control center to monitor activities along our borders comprehensively. Earlier this year, the NCS launched an extensive Time Release Study (TRS) with significant participation from the Federal Ministry of Finance and the Ministry of Marine and Blue Economy, further grace by the presence of the Honourable Minister of Industry Trade and Investment. The TRS aims to identify bottlenecks in the clearance process, to enable the implementation of measures to promote transparency and commitment among key stakeholders and enhance trade facilitation. NCS reaffirms its dedication to publishing the TRS report to foster transparency and address the current challenges hindering trade facilitation.

“The NCS recently concluded a stakeholder engagement, marking a critical step towards achieving the Authorized Economic Operators (AEO) program, set to be launched by mid-April. This initiative, endorsed by the World Customs Organization (WCO), recognizes businesses involved in international trade that demonstrate strong compliance with customs regulations and security standards. “Participants in the AEO program stand to benefit from expedited customs clearance processes, reduced inspections, priority treatment, and enhanced predictability in customs procedures, ultimately enhancing their credibility and competitiveness in the global market. The presence of 7 beneficiaries, including importers, exporters, logistics companies, customs brokers, and Small and Medium Scale Enterprises (SMEs), at the pilot launch underscores the program’s significance and stakeholders’ commitment to advancing trade facilitation efforts in Nigeria.

“The NCS is currently finalizing measures to implement Advanced Rulings, set to take effect in the coming months. This mechanism empowers traders to seek clarity and certainty regarding the classification, origin, and valuation of goods before importing them into the country. Essentially, an Advanced Ruling provides a binding decision from customs authorities on specific aspects of a proposed import transaction, offering traders predictability and consistency in customs procedures. Obtaining advanced clarity on customs matters enables businesses to plan their import activities more effectively, minimize the risk of non-compliance, and ensure smoother customs clearance processes. Additionally, the Service is perfecting arrangements with the Central Bank of Nigeria (CBN) to stabilize the exchange rate for import declarations, further enhancing predictability and facilitating trade operations.

“The NCS is also gearing up to launch the NCS Customs Analytical Laboratory, a critical measure set to take effect in Q2 and Q3. The Customs Analytical Laboratory is a specialized facility equipped with advanced analytical instruments and techniques for the scientific analysis of goods and materials. Its primary objective is to ensure compliance with customs regulations by providing accurate and reliable testing and analysis of imported and exported goods.

“The laboratory will conduct various tests to determine the authenticity, composition, quality, and safety of goods, including testing for chemical composition, product integrity, and adherence to regulatory standards. Leveraging state-of-the-art technology and expertise, aided by the Customs Analytical Laboratory is expected to enhance NCS’s capacity to detect and prevent smuggling, counterfeit goods, and other illicit activities, thereby safeguarding public health, safety, and economic interests. Additionally, it facilitates trade by expediting the clearance process for compliant traders and promoting confidence in the integrity of the customs system.

“On the export front, the NCS initiated discussions with the leadership of the Nigeria Export Promotion Council (NEPC) in the First Quarter to explore avenues for sustaining the positive growth in export transactions. A dedicated technical committee has been established to address specific areas of concern and enhance export facilitation.

“This proactive measure aligns with the President’s agenda to promote export trade, diversify the economy, and generate foreign exchange from non-oil exports. Furthermore, it aims to prepare Nigeria for the commencement of the African Continental Free Trade Area (AfCFTA) on 30 April, 2024, through guided trade initiatives.

“The NCS remains committed to fulfilling its obligations to ensure the success of these initiatives and contribute to the nation’s economic development and integration into the global market.

“The NCS is cognizant of the challenges faced by members of the public, particularly regarding the verification of customs documents.

“In response, we have initiated measures to provide accessible application gateways for the public to verify relevant customs documents, such as duty payments on vehicles, at their convenience. This initiative aims to eradicate fraudulent activities and prevent exploitation by intermediaries or rent seekers in this area.

“Through the provision of convenient and reliable verification channels, our goal is to enhance transparency, empower stakeholders, and foster trust in our processes. Our commitment is to consistently improve our services and meet the needs of the public, ensuring a seamless and efficient customs experience for all.

“Ladies and Gentlemen, It’s important to highlight that the reforms discussed are part of the President’s ongoing efforts to enhance port operations. A recent development is the introduction of a Single Window system, spearheaded by the Minister of Finance. President Bola Tinubu will soon inaugurate a Steering Committee, with full implementation expected to commence by the second quarter of 2024.

“In closing, I extend heartfelt gratitude to our dedicated officers for their commitment and tireless efforts in advancing the mission of the NCS. Your dedication is instrumental in driving the success of our initiatives and ensuring the security and prosperity of our nation. As we move forward, I call upon all.“