Customs Service And The Needed Reforms

In an economy as distressed as Nigeria’s, all revenue-generating agencies are expected to be creative in the way and manner they carry out their duties of ensuring that all monies due to the government are collected and remitted as at when due. Prominent among these agencies is the Nigerian Customs Service (NCS). Aware of this expectation, since the coming into office of the Bola Ahmed Tinubu administration and the subsequent change of leadership and personnel, the agency is putting in place significant reform measures directed at actualising its mandate.

Before now, one of the agency’s challenges was curbing the negative effects of smuggling contraband goods through the nation’s porous borders. The effect on the economy was enormous: Apart from the loss of revenue, the country was literarily turned into a dumping ground for all manner of goods. The NCS tried to focus on its core mandate of trade facilitation but soon realised that it could do more to improve its revenue-generating potential.

Until June last year, when a new helmsman took over the saddle, the service faced many challenges. Comptroller General Adewale Adeniyi identified some of the inefficiencies, which included but were not limited to corruption and outdated practices. These constricted its ability to facilitate trade and generate revenue effectively. Multiple enforcement layers led to excessive checkpoints, frustrating legitimate trade while allowing smugglers to exploit systemic weaknesses. Amidst these issues, expectations for meaningful reform were cautiously optimistic.

However, recent reports on the service’s activities suggest that the new management has ushered in a wave of reforms that have significantly transformed the NCS. The policy thrust—consolidation, collaboration, and innovative solutions—have been the bedrock of what stakeholders describe as transformation.

On assumption of office, one of the first significant moves Adeniyi made was to dismantle existing Strike Force Teams, which had become part of the problem as they created multiple enforcement layers and excessive checkpoints.

We recall that multiple taxation has remained one of the disincentives plaguing the business environment. Therefore, setting aside factors that had sustained this archaic practice was the best way for the agency to resolve the issue of facilitating the movement of goods and services across borders.

By streamlining these into a recognisable structure of the Federal Operations Unit (FOU), the Service reduced the checkpoints from five to two per stretch, significantly easing the movement of goods and reducing opportunities for corrupt practices. This move alone has been pivotal in enhancing operational efficiency and transparency noticeable within the NCS.

Furthermore, the agency has embraced innovative solutions to modernise its operations. The inauguration of a Steering Committee to implement the Authorised Economic Operators (AEO) program aims to streamline customs processes for compliant traders, enhancing their competitiveness in the global market. Integrating geospatial technology and initiating a Time Release Study (TRS) further underscore Adeniyi’s commitment to leveraging technology for operational excellence.

The business environment is responding positively to these initiatives, yielding remarkable financial results. The average monthly revenue collection soared by 70.13 per cent, from N202 billion to N343 billion. In 2023, the NCS recorded a total revenue collection of N3.2 trillion, marking a significant 21.4 per cent increase from the previous year despite an 18.62 per cent reduction in transactions. This unprecedented revenue growth clearly indicates the efficacy of the reforms implemented under Adeniyi’s watch.

On the enforcement front, the NCS has made significant strides in combating smuggling and other illicit activities. The agency recorded 1,763 seizures valued at NGN 11.9 billion in Duty-Paid Value. The historic conviction of 52 offenders in 2023 alone highlights the NCS’s strengthened enforcement capabilities. Additionally, the interception of 2.9 million litres of PMS from smugglers underscores its enhanced operational vigilance.

However, some areas still require improvement to facilitate trade and curb smuggling. This newspaper considers modernising infrastructure and technology at border posts and customs checkpoints one critical area that must be attended to urgently. Enhancing the technological capabilities of these points through automated systems, real-time data sharing, and improved surveillance technologies can streamline operations and reduce human errors and opportunities for corruption.

Moreover, fostering stronger partnerships with neighbouring countries is crucial to tackling smuggling comprehensively. Coordinated efforts and intelligence sharing with customs services of neighbouring nations can help identify and dismantle smuggling networks more effectively.

It is pertinent to point out that NCS needs to focus on improving the ease of doing business by reducing bureaucratic red tape and simplifying customs procedures to make Nigeria a more attractive destination for legitimate trade. Strengthening community engagement and public awareness campaigns about the economic impacts of smuggling can also play a vital role in garnering public support for anti-smuggling initiatives. By addressing these areas, the NCS can significantly enhance trade facilitation and support the federal government’s goal of boosting non-oil revenue generation.

As we look towards the future, NCS does not need to be told that sustaining these reforms is crucial. The full launch of the TRS, AEO Pilot, and Advanced Ruling system, alongside implementing the NCS Customs Laboratory and establishing a Command and Control Centre, are priorities with the potential to cement further the gains made. The planned establishment of the Nigeria Customs University will be instrumental in building a skilled workforce capable of driving continuous improvement in the NCS.

We urge Adeniyi and the service in general to sustain and build upon this positive trajectory. Under the new dispensation, the NCS is well on its way to becoming a model of excellence in customs administration, contributing significantly to Nigeria’s economic growth and global trade facilitation.