A Review of the Nigerian Energy Industry

Ports: Customs, destination inspection and obsolete scanners

09 August 2015, Lagos – Stakeholders  are worried  about the poor performance of scanning machines at the nation’s ports, a development that appears to be  threatening the Destination Inspection regime inherited by the Nigeria Customs Service (NCS) from private service providers 19 months ago,  writes Francis Ugwoke

apapa-port-terminalDestination inspection of goods which was inherited by the Nigeria Customs Service (NCS) from private operators known as Destination Inspection Agents (DIAs) who managed the scheme under contract  appears to be at risk owing to the malfunctioning  of scanning equipment at the ports. Although, officials of the Customs Service claim that some mobile scanners are still working at both Apapa and Tin Can Island ports, freight forwarders insist that most of the equipment were not working. The implication is that importers or their freight forwarders have to spend more time waiting for their containers to go through 100 percent physical examination which was the practice some years ago. The problem associated with manual examination of containers is that it is cumbersome and therefore a nightmare for both importers and their freight forwarders. Apart from building congestion, it is also full of corruption. This situation appears to favour some skeptics  who doubted the capacity of the Customs to handle Destination Inspection regime  which  for about eight years was managed by the DIAs. Yet, the argument by some customs officials and indeed freight forwarders is that what the DIAs handed over to the Customs were mere obsolete scanning equipment.

Customs and Destination Inspection
After about eight years, the DIAs handed over the management of destination inspection of imports to the Customs Service. That was in December 2013.  This was after series of moves by the service providers to keep the contract. The operators had used their high level connection to keep the contract which ran into several billions of Naira being the collection from the one percent FOB for the service providers. The scanners were then working, but occasionally malfuctioning in many of the ports.  Among the DIAs were Cotecna Destination Inspection Limited, Global Scan Systems and SGS Scanning Nigeria Ltd.   They provided scanning services at all the ports and border stations for about eight years before the Customs took over in 2012. One of the DIAs, Cotecna had claimed  that it was bequeathing $70million worth of  scanning equipment to ensure that clearing process was  affected. The scanners were installed at Apapa, Tin Can, Port Harcourt, Seme land border, Kano and Abuja Airport.  Most of these equipment, according to freight forwarders, have not been working. But customs officials in Apapa and Tin Can Ports claimed that two mobile scanners   were currently working.

Lamentations of Freight Forwarders
Freight forwarders who spoke to this writer said the scanners were no longer working. Factional President of National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Amiwero, said that he was concerned about the collapse of scanners at the ports. In a letter he addressed to President Muhammadu Buhari and dated July 28, Amiwero said the scanners had all collapsed.  He  wrote,    “The Scanners handed over to Nigeria Customs Service have all collapsed, as all process relating to scanning in the ports are now done physically, bringing us back to complete manual era with lengthy, cumbersome and costly process in the ports”.  He said that in effect the risk assessment system of the Customs under destination inspection regime has also collapsed due to non-functioning of the scanners.
Amiwero argued that apart from the delay and the congestion as a result of the absence of scanners, there was also the security risk involved. He called on the President to investigate the Customs Service on the state of Destination Inspection Scheme.     He identified other components of destination inspection which he claimed had collapsed as  Pre- Arrival Assessment Report (PAAR) that replaced  the Risk Assessment Report (RAR)  introduced   by the DIAs. According to him, the PAAR is being encumbered with “various duplication intervention from headquarters, zone, and Area and unit of “Alert” and imposition of illegal procedure that negates trade process. The core of dispute resolution mechanism is all collapsed”.
President of National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Eugene Nweke also said that scanners had  failed to work at the Lagos ports.  But Nweke had a contrary view to Amiwero, explaining that 80 percent of the scanners handed over to the Customs from 2013  were refurbished.
He also said that the poor state of scanners at the ports had made examination of goods cumbersome.  He disclosed  that though Apapa Customs  had  a Memorandum of Understanding (MOU) with the APMT to drop 250 containers for scanning daily,  less than 100  is being  examined, a development that has caused a lot of delay in clearance. He added that the drop in cargo throughput due to the economic situation has become the saving grace under the situation.
Customs   on State of   Scanners
Officials of the Customs Service who spoke to this writer acknowledged that the  Service was having challenges with the scanning machines.
But they said that this is being blown out of proportion by freight forwarders, who according to them, wanted Destination Inspection regime to be returned to the former service providers.
However, Comptroller of Tin Can Port of the Customs, Alhaji Jibrin Zakare, told this writer that his Command had one mobile scanner that  scans between 250 to 300 containers daily. Zakare however said that freight forwarders complained because the Command could not meet their demands in terms of the number of containers they wanted scanned. But he said that the freight forwarders were being requested to reroute the remaining consignments for physical examination. Similarly, the Public Relations Officer of the Apapa Command of the Customs, Mr Emmanuel Ikpa, said that one of the two mobile scanners was working in his area. Ikpa claimed that those who said the scanners had totally collapsed were wrong. But he could not say the number of containers his command could scan in a day. Sources said that the situation in Lagos ports is not different from what happens in Eastern ports.
A top official of the Customs disclosed that already the Comptroller-General, Mr  Dikko Inde Abdullahi, was making frantic moves to acquire new scanning machines. But when this will be possible could not be ascertained. The prices of scanners run into several millions of dollars. Founder, NAGAFF, Dr. Boniface Aniebonam, said the scanners handed over to the Customs were not facilitating trade in the ports as they were meant.  He described the scanners as not giving effective result during scanning.
Aniebonam disclosed that the truth was that many freight forwarders  did not want scanners because they (scanners) didn’t give proper description which at the end forces the Customs to start physical examination on the same items it had scanned before.
He said such double  examination and the attendant delay were the reasons why agents do not want scanning machines.
Aniebonam said some importers, particularly reputable manufacturers, were allowed to clear their goods under fast-track arrangement of the Customs. He  advised  the Customs management  to go for higher version of scanners that could give clear description of  the  consignments being scanned.


– This Day

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