As part of the effort boost Nigeria Customs Service (NCS) operations, Federal Government has approved $3.1 billion modernization project for the agency.
The modernization project which is a Public and Private Partnership (PPP) concession was expected to last for 20-years and would improve Customs’ clearance efficiency in trade facilitation, support end-user satisfaction.
Also, the project completion would foster mutually beneficial relationships between consumers and the NCS and would improve stakeholders’ confidence in customs services.
The modernization project would minimize government borrowing and spending whilst diverting funds that could have been used to facilitate this project to address other pressing needs of the government.
Above all, it will eradicate tax and duties’ evasion towards increasing revenue generation with the introduction and interplay of the Unified Customs Management System, e-Port, Logistic Monitoring, electronic-Cargo Tracking, and Mobile Enforcement Systems, which all imports and exports would go through.
The Minister of Finance, Zainab Ahmed, and his Information and Culture counterpart, Lai Mohammed, announced the approval on Wednesday after a Federal Executive Council (FEC) meeting chaired by President Muhammadu Buhari in Abuja.
They noted that the project, led by Messers Y Technologies with four other members, would minimize government spending and allocation to NCS for tasks already contemplated such as digitization of Customs processes, integration of ICT, and intelligence facilities, among others.
Ahmed stressed that the project would not cost the federal government anything like the $3.1 billion being proposed will be sourced by the sponsors and their partners.
The minister stated that Customs modernization project was part of the diversification plan of government and that it was expected to yield up to $176 billion of revenue for the country.
She said: “The main objective of this project is to completely automate every aspect of the customs business and to institutionalize the use of smart and emerging technologies that will enhance the statutory function of the Nigerian Customs Service in the areas of revenue generation as well as trade facilitation and enhancement of security.
“This is a project that will not have an immediate cost to the government, the investors are providing all of the financings and this revenue will be deployed in three phases and there will look over the investment in the concessionary period of 20 years.”
“The Nigerian Customs currently has some level of automation services but it’s not all of its serves that are automated. 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 million which will be done in three phases over 36 months by these investors and $1.1 million is our projection of the operational cost over the 20-year period of the implementation of the project.
The minister emphasized that the agreement indicated that consortia were to provide investment that would be paid overtime.
“So this is the best possible way for Nigeria to roll out an important capital project using funds from the private sector and providing service for the use of Nigerian people and the government.”
According to her, we hope that at some point those revenues from oil will begin to be insignificant compared to revenue from the non-oil sector in the Nigerian economy. That’s our aspiration and that is the true meaning of diversification.
Mohammed in his explanation hinted that the project was not costing the federal government any additional fund and that the $3.1 billion proposed would be sourced by the sponsors and the partners.