NAGAFF Demands Clarity On $3.1bn Customs Modernization Project

NAGAFF Demands Clarity On $3.1bn Customs Modernization Project
Head, Research and Policy Group, National Association of Government Approved Freight Forwarders (NAGAFF) Chief Eugene Nweke
  • Highlight several failed e-Customs contracts

By Kenneth Jukpor


In a bid to address the ambiguity surrounding the $3.1billion Customs Modernization concession contract approved by the Federal Executive Council (FEC) recently, the National Association of Government Approved Freight Forwarders (NAGAFF) has written to the Federal Ministry of Finance.

The Association noted that in 2020, FEC has also approved the contract sum of  $18.12 million and N3.255 million for the acquisition of three (3) Rapiscan Cargo Mobile Scanners awarded to Messrs  Airwave Limited and another contract of  N280,992,888:75 inclusive of VAT for 5 units of fast Ballistic Reverie Assault Boats/ 5 units of Patrol Boats with assorted accessories  awarded to Messrs C.Y. West Africa Limited.

NAGAFF in a letter signed by its former President and current Head of the Association’s Research and Policy Group, Chief Eugene Nweke asked for the link between the contract award  sum of $18.12 million  and N3.255 million to Messrs Airwave Ltd for the acquisition of Rapiscan Cargo Mobile Scanners and the concession contract award sum of $3.1billion to  Messrs E-Customs HC Project Limited.

“In a situation where the Federal Government will be acquiring Rapiscan Cargo Mobile Scanners with public funds; we care to know what E-Customs HC Project Limited would be bringing to the table of reasonable value services”, NAGAFF said.

The freight forwarding group also pointed out that there is no attached milestone in the concession investment and recoupment plan, as concessions should attract foreign direct investment (FDI).

“It is pertinent for us to ask, if this concession merited being classified under the FDI status? What are the applicable financial indices and parameters used in arriving at the projected revenue generation to the sum of $176 Billion? Presently the Nigeria Customs makes an average yearly revenue of N1Trillion × 20 years = N20 Trillion. However, it is not clear if the concessionaires projections are monthly, yearly or daily or 20 year cumulative projection based. We will appreciate if the detail contract terms and conditions be made available to us.”

NAGAFF also urged the Ministry of Finance to reveal if the condition of the one percent Comprehensive Import Supervision Scheme (CISS) would be applied in the present concession arrangement.

Chronicling some of the e-Customs projects and the flaws since the 1970s, the report said “Pre-Shipment Inspection Scheme introduced in 1979, later was backed up by legal agreement via Pre-Shipment Inspection Act of 1996 aka Decree No.11 of 1996. – Pre-Shipment Inspection Companies were paid a whooping sum of $70 million to $75 million yearly for escalating trade malpractices, while the Service was partly paid less than N1 billion.”

“Within March to September 1999 Destination Inspection was re-introduced, under a contractual agreement with Destination Inspection Agents (DIAs), the essence was for a full computerization and interconnectivity of the ASYCUDA to all stakeholders.”

“On 3rd July, 1997, the Ministry of Finance signed agreement with the Economic Community of West Africa States (ECOWAS) for the installation of Asycuda in Nigeria Customs Service Headquarters and Area Offices of Seaports, Airports & Border Stations. The objectives of this agreement are hinged on e-customs modernization. The Contractor/Consultant installed outdated 2.7 site instead of the 3.0 site paid for, hence the need for upgrade to Asycuda 3.0 site.”

“5 years after, the Asycuda agreement was not completed, out of the17 sites covered in the contract only 7 sites were installed, wherefore pursuance to the upgrading into Asycuda 3.0, UNCTAD estimated $2,950,000:00 for its components, and non UNCTAD components at $66,900:00. Noted that, the completion of phase 1 of the project between 6 – 8 months at the cost of $27,805,000:00. Was there any sanction against ECOWAS?”

“In June, 2001, a Presidential Committee, chaired by Federal Ministry of Finance was set up to review the Pre-shipment Inspection (PSI) Scheme, The Committee examined the objectives and mode operations of the PSI.”

“In 2002, Government further commissioned Messrs J.C.E. CONSULTING ASSOCIATE (CROWN AGENT) to undertake a study on the CISS and Nigeria Customs Service for the purpose of disengaging the services of Pre-shipment Inspection Agents and enhancing revenue.”

“In June, 2003, the Federal Government signed an agreement with Messrs COTECNA INSPECTION SA on the provision, installation and operation of 14 X-ray Scanners on Build, Operate & Transfer (BOT) basis, at prescribed locations to scan all imports coming through the approved imports entry points. The 10-year contract also included the yearly training of 50 Customs officer on the Computerized Risk Management System (CRMS), to train 500 officers within the contract period of ten years. Again, the implementation was marred with several flaws and compromises.”

The Association wondered when there will be an end to perennial modernization attempts and how the Finance Ministry could reconcile the impact of financial losses amid the non performing contracts.

Noting that clarification on these issues will go a long way in setting the records straight and set the template for careful future administrative considerations, NAGAFF also asked for evidences of sanctions or recovery for default or non-performing contracts.

Recall that in December 2019, the suspension of the then controversial $300 Million Proposed contract for the e-customs modernization was reported after public outcry that trailed the proposed contract, especially on the conflicting imputed contract values and integrity of the promoters of the scheme.

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