FACT CHECK: Was Customs CG correct on increased revenue generation after border closure?  

hameed ali

Hameed Ali, Comptroller-General, Nigeria Customs Service.

 

The Comptroller-General of Customs, Hameed Ali, on Wednesday told members of the National Assembly that the Nigeria Customs Service (NCS) has been raking in between N4.7 billion and N5.8 billion daily since the Federal Government closed the nation’s land borders.

Ali stated this when he appeared before the Senate and House of Representatives joint committees on Finance and National Planning, working on the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The NCS boss had while addressing the lawmakers said the land border closure was a blessing to the nation.

He said, “When we closed the border, my fear was that our revenue was going to drop. To be honest, our revenue kept increasing. There was a day in September that we collected N9.2 billion in one day. It has never happened before.

“This is after the closure of the border and since then, we have maintained an average of about N4.7 billion to N5.8 billion on a daily basis which is far more than we used to collect.

“What we have discovered is that most of those cargoes that used to go to Benin (Republic) and are then smuggled into Nigeria now come to us. Now that we have closed the border they are forced to bring their goods to either Apapa or Tin Can Island and we have to collect duty on them.

“If that (border closure) would continue, to us, it is a welcome situation. Our revenue has not reduced. As a matter of fact, it is increasing as a result of the closure of the border.”

However, checks ran by SHIPS & PORTS to verify the claim of increased revenue generation by the Customs CG as presented to the lawmakers, which of course made headlines in various newspapers, showed that despite the border closure, Customs has made no significant improvement in revenue generation.

In June 2019, prior to the border closure, Zonal Coodinator in charge of Customs Zone A, Lagos, Assistant Comptroller General Kaycee Ekekezie, had during a visit to the National Association of Government Approved Freight Forwarders (NAGAFF), said Customs revenue generation had increased to a region of N5.5 billion daily.

Going by the above figures by ACG Ekekezie, it is instructive to establish that the claims by the Customs CG on increased revenue collection after the border closure was inaccurate. 

In real terms, the Nigeria Customs Service has actually generated far less than what was generated in previous years before the border closure. In August 2018, the service generated 140 billion as against N115 billion generated in September 2019. But for the border closure, the performance of Customs in terms of revenue generation would have gone higher especially at the ember months when level of imports is expected to increase.

“The impression we are being given is that the border closure is a positive one. I have been trying to understand how positive it is when the prices of food have skyrocketed.

“Our CG went to the National Assembly and he told the lawmakers that the border closure was a good thing and that Customs is generating on the average every day N5 billion. He said that has never happened before but was due to the border closure. The truth is, there is nothing new about the figure. If not for the border closure, our revenue would have gone higher above what is being collected. The lawmakers are ignorant of most of the workings of Customs, that is why it is easy to convince them, they accept anything,” a senior Customs officer told SHIPS & PORTS on condition of anonymity. 

The claim of increased revenue collection by the Customs CG may also have informed why the lawmakers increase the NCS annual revenue target from N887 billion in 2019 to N1.5 trillion for 2020 fiscal year.

While it is not to say there are no benefits to the border closure especially in curtailing the smuggling of light weapons, vehicles and rice, the sad truth is that legitimate businesses, which ought to have increased Customs revenue, have been left stranded since the abrupt closure of the borders.

Presently, there are over 735 trucks loaded with Nigeria-bound import goods trapped at the Benin Republic border, many of which are yet to pay Customs duty.

Speaking on the development, Chairman, Association of Nigerian Licensed Customs Agents (ANLCA), Seme border Chapter, Lasisi Fanu, said the border closure has no positive impact on Customs revenue generation.

According to him, “Between when the border was closed and now, we have over 735 trucks stranded. Only a few have paid duty before the closure of the border. So the statement by the Comptroller General of Customs does not represent the true revenue figure of customs.

“This is a seasonal period. Between August, September till year end, people will travel to buy goods and Customs revenue will increase in all Customs formation. If the borders were not closed, Seme command alone can generate more than N1 billion in a month because of the season. So the closure of the border no doubt has a negative effect on Customs revenue generation because it would have been more.

“What they (Customs) generated in June should not be the same with what they are having now because this is a seasonal period with Christmas approaching. If people are aware that border would be closed, they won’t bring their goods to the border. Now that it is like that, they should just give us a platform where they can come and conduct physical examination and duty will be collected on the goods so that people who have them can sell them now because most of the goods are already depreciating in value.

“We are not against the border drill but genuine business should be allowed to go so that Customs can maximise their revenue collection.”