Benefits of the 20-year E-Customs concession
The Federal Executive Council on September 2 signed-on to one of the most significant concession projects in the history of Nigeria with the 20-year Nigeria Customs Automation Scheme. The project involves using technology to drive all processes and procedures in the Nigeria Customs Service, NCS and would lead to exponential increments in productivity, returns and process management.
The E-Customs project has a value of $3.1billion, but Nigeria will not spend a dime directly. The country will instead gain $176billion returns over 20 years from the $3.1b estimated expenditure granted to the concessionaire.
Finance, Budget, and National Planning Minister, Hajia Zainab Ahmed announced the concession and its details after the FEC meeting. “The purpose of the memo we presented to Council was for a project that will enable the complete automation of the NCS processes and procedures using the application of information technology in all aspects of Customs administration,” she announced.
Mrs Ahmed added: “So, Council today ratified Mr President’s approval for the PPP concession for 20 years to Messrs E-Customs HC Project Limited as a concessionaire for the delivery of customs modernisation project.
“This is a project that will not have a direct cost to the government. The investors are providing the financings, and this revenue will be deployed in three phases. They will look over the investment in the concessionary period of 20 years.”
The Customs Modernisation Project will deploy technology extensively. It is akin to the regular Build, Operate and Transfer schemes that operate in infrastructure projects. The Messrs E-Customs HC Project Limited consortium will invest their resources of money, expertise, human capital and time to develop and deliver a new, automated customs service to Nigeria.
The Federal Government went for the scheme because of the many benefits it promises to deliver.
The Nigeria Customs Automation Scheme is a presidential initiative on customs modernisation, e-customs project and, especially the establishment of a digital/paperless customs administration. It will change the mode of administration and results from the running of Nigeria’s 82 border stations significantly.
The Customs Automation Scheme will deliver a single-window model of cargo clearance. Other benefits include, but not limited to:
- Paperless customs administration
- E-payment of customs duty
- E-container loading
- Electronic risk-board inspection
- Single platform link to all other government agencies
- E-permit exchange among operators.
The scheme will reduce delays, bottlenecks and corruption within the ports. More crucially, it will increase productivity, national security, and revenue generation by the Customs.
The Customs Automation Programme will guarantee the evolution of integrated border management module with a centralised and automated Customs Risk Management system. The system would run real-time scanning. It will also ensure full automation of all customs procedures and business. Integral to the system is the full automation of Customs operations using the latest smart technologies supplied by Original Equipment Manufacturers. There would also be strategic capacity development for the personnel of the service.
President Muhammadu Buhari’s approval of the concession follows the success of the consortium in a competitive bidding process conducted in 2016. Ninety-four companies responded to the request for bids by the NCS. The service pre-qualified 15 companies and invited them to make presentations on their solutions. Bionica Technologies WA Limited topped.
The Nigeria Customs Service commenced a modernisation process in 2013. The goal remains to change the narrative of poor or under-performance associated with the service.
Stakeholders in the maritime sector agree on the imperative of leveraging technology to drive efficiency and productivity at the ports. They support the programme introduced in 2016 as part of the seaport reform plan adopted by the Federal Executive Council.
The NCS has been modernising since 2013 and has made some remarkable progress. For instance, it recently announced increased revenue of N1.125trillion due to electronic payment of duties and taxes generated from January to October 2019. The Bionica Consortium asserts that a fully automated system would increase the revenue exponentially.
Job creation is another feature of the port automation programme of great interest to stakeholders. It will also minimise smuggling as well as build partnerships with investors. There is a guarantee of external finance having no direct cost to the NCS for all projects. The Africa Finance Corporation leads the pack of waiting investors.
Companies in the Bionica Consortium have rich pedigrees. For instance, the Lead Partner of the modernisation exercise, Bionica Technologies WA Limited, specialises in system integration for advanced communications, government defence and security electronics. It also offers monitoring and other allied strategic and tactical requirements as well as expertise in various other areas of information technology. Bionica has both local and international original manufacturers as partners. They include Smiths Detection, a world-leading designer and manufacturer of sensors capable of detecting and identify explosives, weapons, chemical agents, biohazard, nuclear and radioactive material.
The 20-year concession arrangement provides latitude for long-term planning for the project. Various ports around the world have successfully run similar programmes. Success stories include Singapore, China, Qatar and Venezuela.
Ayodele is a finance analyst in Abuja