$3.1 Billion for the Automation of the Nigerian Custom Service set To Increase the Sector’s Revenue
The Federal Government has approved $3.1 billion for the complete automation of the Nigerian Custom Service (NCS) in order to enhance the agency’s mode of operation using information and technology in all aspects of its administration.
The Minister of Finance and Budget Planning, Zainab Ahmed in her remarks expressed her desire to see the non-oil sector, among which is NCS overtake the oil sector in the years to come with regards to revenue.
It took years but finally, last week Nigeria voted for the automation of processes at the ports as the Federal Executive Council approved a 20 year concession for the E-Custom project by a league of firms. According the Ahmed, this project will not have a direct cost to the government, investors will provide financing.
The breakdown of the $3.1 Billion approved is a capital investment of $1.2billion in three phases over three years or the average of $400million annually. On the cost side, the government approved for the concessionaire operational cost of $1.9b over 20 years. It translates to $95million annually.
What Nigeria Stands To Gain?
For years, the NCS has improved on its automation processes and the revenue it has been generating has steadily increased as a result. In 2019, it announced increased revenue of N1.125 trillion due to the electronic payment of duties and taxes generated from January to October 2019. This 36 month project may the grand slam that takes revenue generation to a whole other level.
There is a projection that the concession will yield $176billion in 20 years which is a huge contrast to the N957billion projects revenue for 2020 which due to the rippling effects of the pandemic may not be feasible as the year slowly runs out. This initiative will modernize customs processes and facilitate a digital customs administration. It will drastically change the running of border stations in Nigeria. The benefits are limitless:
- Minimization of smuggling.
- Job creation.
- Improved relationships and partnerships with investors.
- Possible increase in external finance.
- Paperless customs administration
- E-container loading
- Possibly the rise of E-boarders
As is, it seems there is no rush with the 20 year concession arrangement which provides room for long term planning. The main concern here is: Can Nigeria see this through? 20 years is a really long time and so much can change. Elections are around the corner, what if the new administration does not support the scheme? It could cancel out all the efforts already being put in place.
However, we can acknowledge the many efforts of the government and governmental bodies the adoption of digitalization in all aspects of the Nigerian society. Schemes of this nature is bound improve the overall economic output of the country and standardize productivity across board and improve the overall economic and financial stability of Nigeria.