EXCLUSIVE: Customs High Command Endorsed Modernization Project, Behind its Presidential Approval – Investigation

Contrary to the widespread reports that the recent $3.1billion federal government contract approval for Customs modernization project is an imposition on the Nigeria Customs Service, the top management of the service was part of the processes that led to its approval by President Muhammadu Buhari and subsequent ratification by the Federal Executive Council (FEC), Business & Maritime West Africacan authoritatively reveal.

Investigation shows that it was Col Hameed Ali (Retd), the Customs Comptroller- General of the Service, that called for the modernization, contrary to views being expressed by some stakeholders that customs operation has been sufficiently modernized and needs no further private sector-led modernization.  

Business & Maritime West Africa can authoritatively reveal that the Customs Service was part and parcel of the project and duly gave its approval before the Presidency came into it. It was the Customs CG himself who took Bionica Technologies W.A Limited to the Presidency, a highly placed source in the service revealed.

Our investigation shows that in 2016, Bionica Technologies W.A. Limited demonstrated the technology that will drive the project to the Customs management. The management it was gathered, were satisfied with what they saw and clarifications made by the company on questions that rose from the demonstration. Their endorsement of the project, a source within the management told our reporter, was due to what the service believed would curb ongoing infractions in import policy. 

To further convince the service of the efficiency of the technology, the source said that the company took the Customs CG and some of his top management to China, France and South Africa, where the companies that will provide technological backbones for the project are domiciled. 

It was also gathered that on return from the trip and thrilled by what he saw, the Customs Comptroller-General led the Bionica Technology officials to the Presidency where the company’s proposal was presented for approval.

Tracing the genesis of the contract, Customs sources told BMWA that in 2016, Bionica Technologies W.A. Limited responded to a bid request by the NCS along with 93 other companies. Fifteen companies were pre-qualified, including Bionica Technologies, and were invited to make presentations on their solutions that will help Nigeria realize its vision of attaining complete automation of its customs operations and enthrone best practices as obtained in advanced countries.

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Bionica Technologies W.A. Limited was the preferred bidder after a rigorous evaluation process. The company presented its bid together with a consortium namely, Huawei, Smiths Detection, Nuctech of China, Larsen & Toubro Group, and Paramount Group, Huawei Technology. The Africa Finance Corporation (AFC) came in as both an equity investor and the Mandated Lead Arranger (MLA) which will facilitate loan syndication with foreign and local banks.

To finance and implement the project, a Project Company Concessionaire, Messers E. Customs HC Project Limited, was set up to partner with NCS under a Public, Private Partnership (PPP) arrangement, to develop and implement Customs modernization through the establishment of a digital/paperless customs administration (the “e-Customs Project”).

The concession which is targeted at eradicating tax and import duties’ evasion,  increasing revenue generation with the introduction and interplay of the Unified Customs Management System, e-Port, Logistic Monitoring, electronic-Cargo Tracking, and Mobile Enforcement Systems, which all imports and exports would go through, was awarded to Messers E. Customs HC Project Limited, and is expected to run for 20 years.

Following the presentation of this impressive proposal, the Presidency gave its anticipatory approval last year before opposition started mounting over it, leading to a temporary suspension.

The President’s anticipatory approval was ratified recently by the Federal Executive Council (FEC), after the memo was presented by the Minister of Finance, Budget, and National Planning, Zainab Ahmed.

The Finance Minister said, “The purpose of the memo we presented to the Council was for a project that will enable the complete automation of the Nigerian Custom Service processes and procedures using the application of information technology in all aspects of Customs administration, in favour of a firm known as E. Customs HC Projects Nigeria Limited for a concessionary period of 20 years.”https://3f777603e77675cb2db85bfaa98d1ef0.safeframe.googlesyndication.com/safeframe/1-0-37/html/container.html

“The main objective of this project is to completely automate every aspect of the customs business and to institutionalize the use of smart and emerging technologies that will enhance the statutory function of the Nigerian Customs Service in the areas of revenue generation as well as trade facilitation and enhancement of security.”

The $3.1bn Customs modernization project which is at no cost to government is expected to eliminate problem of under-valuation and under-declarations and other sharp practices which had bedeviled the import supervision process and boost customs revenue. It is projected that the project if successfully implemented will yield up to $176billion annually.

Contrary to fears that the project will take away jobs from Customs, a source said that no job will be lost as the firm and the customs will work together to execute the project. BMWA learnt that the  committee that worked on the process also looked at the National Trade Impact process that has been going on for years, and confirmed that the Nigerian e-customs project is a subset of the National Trade Impact in which the Nigerian Customs will play its lead role in the national trading platform.

Inside sources believe that if the project is successfully executed, without the Nigerian factor coming into it, it will eliminate all the sharp practices in the goods clearance process, constant system failures and blackouts being experienced with the present platform which is run by Webbfontain, curb abuse of government’s fiscal policies and industrial incentives which are targeted at boosting local production and triple customs revenue. 

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