Funding Customs for efficient port operations

The Nigeria Customs Service (NCS) is a critical agency of the Federal Government that is saddled with the responsibility of implementing the fiscal policies of the government that are connected with international trade, which include import and export businesses. The functions of the agency cut across generating revenue from import duties and levies, trade facilitation, fighting smuggling of unlawful items into the country through the seaports and land borders, and generation of trade statistics.

Industry close watchers believe that lack of proper funding of Customs, which results in poor staff welfare, is the major reason why corruption is still the order of the day among some officers and men of the service.

Apart from poor funding of the service, there is also the issue of delay in the release of the annual budget of Customs by the government, which has posed serious challenge to efficient operation of the service.

According to the Act establishing it, the Customs Service is currently being funded with about 7 percent of the entire duties collected in the preceding year, which forms the basis upon which the annual budget of the service is approved by the National Assembly. 

BusinessDay check reveals that the approved budget for the service in the last four years (2010-2014) amounts to about N379 billion, out which the Service has received an estimated sum of N279 billion, while the balance of close to N100 billion is yet to be released by the government as supposed.

Boniface Aniebonam, founder, National Association of Government Approved Freight Forwarders (NAGAFF), in a recent letter sent to President Goodluck Jonathan blamed the inefficiency and poor attitude to work among men of the service on poor funding of the service. He suggested that the Federal Government should look into the issue to find out why Customs’ funds are being delayed, and to establish a more sustainable means of funding the service. 

Aniebonam said the effect of the above-mentioned challenge was delay in cargo clearance at the port, which threatens government’s revenue as well as the country’s foreign exchange since shipping business is dollar-denominated.  

“We suggest that rather than the present arrangement of granting Customs 7 percent of the duty collected, which at the moment is inadequate as running cost, we urge Mr. President to look at granting about 5 to 7 percent of the Free-on-Board (FoB) value of imports to fund the service,” Aniebonam said, adding that such would enable the service take up the additional responsibility of Destination Inspection (DI) handed over to it eight months back by the DI service providers.

Further findings show that the service will soon take over the remaining part of the DI scheme, which is the management of the ASYCUDA system currently being handled by Webb Fontaine. In this regard, it is also expected that the right funding required by the service to enable it build a robust system of network devoid of downtime would be made available by the government. 

This is as stakeholders, such as Olayiwola Shittu, national president, Association of Nigerian Licensed Customs Agents (ANLCA), have lamented over the constant breakdown of Customs’ server that was built and is being operated by Webb Fontaine, which results in delay in cargo clearance at the ports. The stakeholders say that if the government adjusts the funding strategy of the service, it should also put an end to the collection of 1 percent Comprehensive Import Supervision Scheme (CISS) collected by Customs on behalf of the former DI service providers, since the contract is no longer in existence.    

Customs is a parastatal directly under the control of the Federal Ministry of Finance. This, observers say, has been a serious factor militating against the service. This is why the newly proposed Customs and Excise Management Act (CEMA) agitated for partial autonomy of the service.

Commenting, Aniebonam said partial autonomy would allow the service to be free from government control, adding that it would also help to limit the bureaucratic bottlenecks in the civil service that hinder the efficiency of Customs operations. 

Uzoamaka Anagor