A Review of the Nigerian Energy Industry

Customs in statutory test on Destination Inspection

Inde-Dikko-Abdulahi, Comptroller General of Customs, Nigeria08 December 2013. Lagos – After years of politicking, the Nigeria Customs Service (NCS) finally got the nod of the Presidency to take over the job of destination inspection of goods at the ports. This has been a subject of controversy in the past one year when government twice extended the contract of the Destination Inspection Agents (DIAs) when it expired December 31, last year, to July this year. Government had again extended the contract from July to November 30, for the Customs to fully take over from December 1, this year. The Federal Government last week fully confirmed this, thus ending earlier speculations that it may succumb to pressure from the private operators running the system to further extend the contract.

President Goodluck Jonathan had following the amended Import Guidelines of the Destination Inspection Scheme approved the transition of Destination Inspection Service from contracted Service Providers (SSPs) to the Customs. Under the arrangement, the transition took effect from December 1. Customs was under this conferred with the responsibility of full processing of all import transactions to Nigeria in line with the guideline.

Implication of the Customs Take-Over
Following the take-over of the scheme from Cotecna, SGS and Global Scan, the former service providers will no longer approve new Form M or issue Risk Assessment Report (RAR). They will no longer perform scanning services for goods imported into the country. In a statement, Mr. Paul Nwabuikwu, who is the Special Adviser to the Finance Minister, Dr Mrs Ngozi Okonjo Iweala, explained that the service providers are to hand over all valid Form Ms and existing Valuation Database to the Customs Service. The Federal Government however extended the provision of ICT infrastructural back up for the scheme currently being executed by Webb Fontaine for a period of 18 months. During this period, the Customs would have prepared enough to take over smoothly. Apparently expecting some challenges from the take-over which was part of the reasons for the delay in Customs taking over, government provided hotlines, including 09 4621597, 09 4621598 and 09 4621599 , to enable stakeholders make complaints, observations and suggestions as the Customs takes over the full implementation of the scheme. Part of the statement from the Ministry of Finance read:
“As we enter this era, the Federal Ministry of Finance urges stakeholders and all Nigerians to give the Comptroller General of Customs and his team all the support necessary to manage a smooth and successful takeover. While no effort was spared in the build up to this process, we should all bear it in mind that transitions of this magnitude may throw up some implementation challenges. It will require the understanding of all stakeholders to manage whatever initial challenges that may arise before the process fully stabilises”.

From Pre-Shipment to Destination Inspection
The Destination Inspection of imports started over seven years ago when Nigeria decided to end the pre-shipment inspection scheme, apparently because it failed to achieve desired objectives. Pre-shipment inspection was flawed with malpractices such as under-invoicing, under-declaration and concealment. Pre-shipment inspection agents who were supposed to check these malpractices failed as importers had a field day with fraudulent practices which forced government to introduce destination inspection. Many had expected that the Nigeria Customs Service (NCS) should have taken over the scheme fully but government thought it wise to engage consultants who implemented the scheme along with the Customs. Destination inspection of goods in the country has not actually ended the problems associated with pre-shipment inspection, but the good thing is that such exercise has been domesticated. With the Customs taking over fully, it is expected that the amount paid to the private service providers can now go to the government which can use it to provide social services. Although, the sad aspect of the issue here is that the service providers who also employed many Nigerians may have to lay them off with the end of the contract. This is sad enough. But the argument is that the Customs will have to employ more Nigerians and pay them better than what is being described as peanut salaries of some of the service providers
Fight Over DI
Shortly before the Federal Government renewed the contract of the service providers, stakeholders were divided on the issue. While some felt that the Customs Service should be allowed to take-over the scheme, others were in favour of the continuation of the consultants engaged to provide the services. There was a sharp division between various associations of customs agents. Those who had issues with the Customs kicked against handing over the scheme to the organisation. Others who maintained smooth relationship with the service supported the Customs on the scheme. Each side lobbied either for the private companies or the Customs. At the end, those who wanted the private operators to continue won. But they were labeled as having been settled. In the same manner, those who favoured Customs were accused of not doing so just for the love they have for the service but for other reasons. Now, it is the turn of those in favour of Customs running the scheme to smile.

Customs Boss on the Scheme
Reacting to the policy, the Comptroller-General of Customs, Inde Dikko Abdullahi has assured that the Service will not disappoint Nigerians and the trading public as far as destination inspection is concerned. Abdullahi said that officers and men of the Customs Service have been undergoing training over the years in preparation for the exercise. He disclosed that a state of the art Ruling Centre has been put in place for issuance of Pre-Arrival Assessment Report (PAAR) in Abuja. The centre, according to him, has such features as “world class data centre with disaster recovery plan; robust internet connectivity with backup; dedicated power supply backed up with two units 1000 KVA; and 350 trained officers working round the clock in 3 shifts”. Abdullahi also added that the trade information portal, www.nigeriatradehub.gov.ng, has proven to be a platform that puts information at the disposal of all actors in the trade chain.

“We therefore appeal for your understanding and cooperation as the NCS takes over the destination inspection process especially in the area of compliance with the trade regulations. This new regime we are starting promises better management of our revenue generation, operations, enhanced trade facilitation and better collaboration with other agencies of government to enhance national security”, he said.
Abdullahi added that since no change ever comes without some pains, the Service will anticipate some hiccups at the beginning before it can fully stabilise.
According to him, “some of these may arise from the sheer volumes of declarations. However, as a Service, we have taken measures to address these risks and manage them to the advantage of our stakeholders. We are however pleading for the understanding of all Nigerians that whatever hiccup faced at the initial stage should not create anxieties”.
PAAR Replaces RAR
As a follow up to the full take-over, the Customs Service, the Ruling Centre of the Nigeria Customs Service issued the first Pre-Arrival Assessment Report (PAAR) during the week, in less than 24 hours.The document which replaces the Risk Assessment Report (RAR) issued by erstwhile service providers is a mandatory requirement for imports into the country. The issuance of the first PAAR was announced by Abdullahi at a Town Hall meeting held with Traders in Lagos to sensitize them on the new scheme. In a statement issued by the Public Relations Officer of the Service, Deputy Controller Wale Adeniyi, the Comptroller General of Customs described the document as indicative of the level of preparedness of the Service to handle the scheme. “We have invested a lot preparing for this feat. Service Providers took a minimum of 5 working days to issue their RAR. We convinced Government that we can produce the replacement in 6 hours. Now we have achieved that in less than an hour”, Abdullahi said.

Stakeholders’ Views
Stakeholders who spoke to THISDAY on the take-over of destination inspection by the Customs said it was a good development. They also said they have no doubt that the Service will succeed in the scheme. A maritime lawyer, Mr Emma Ofomata told THISDAY that he has no doubt that the Service will succeed. Ofomata, however, advised the Service to do everything possible to ensure that it proves detractors wrong by living up to expectations as far as the scheme is concerned. He added that the good thing about customs taking over the scheme is that more revenue will go to government purse, adding that this will have a multiplier effect on the national economy.

– Francis Ugwoke, This Day

In this article

Join the Conversation