Following the concession agreement of the Nigeria Customs Service Modernisation Project, Trade Modernization Project Limited has assured that the $176 billion revenue target would be met and surpassed.
The $3.2bn investment is set to help achieve the diversification of Nigeria’s economy and development of the non-oil sector, which is close to the heart of President Muhammadu Buhari.
The agreement was signed on 30th May, 2022.
The Managing Director of the Trade Modernization Project, Dr. Jummai Umar-Ajijola, congratulated the president for his “great vision and direct intervention in modernizing Nigeria’s trading culture and practice.”
Dr. Jummai explained that “As the concession period begins, we wish to assure Nigerians that the revenue target of $176 billion for the Federal Government will be achieved, if not surpassed.
“More importantly, we are excited about the real economic benefits for the country, in terms of business growth for exporters and import-dependent businesses, improved global supply chains, enhanced industrial capacity utilization, and creation of employment opportunities.
“With the support of its technical partners (Huawei Technologies) and financing from Africa Finance Corporation (AFC), Trade Modernisation Project Limited (TMPL), through our global team of experts, is ready to hit the ground running. The U$3.2 billion investments required for the project is already being finalized through an AFC led initiative.”
WHAT YOU SHOULD KNOW ABOUT THE CUSTOMS MODERNISATION PROJECT
The Customs Modernisation Project will fully automate the Nigeria Customs Service businesses processes, both operational and administrative. It will usher in a new era of fully computerized and paper customs for Nigeria. This will enhance the profile of the country as a foremost facilitator of trade, an important global development practice, in line with the requirements of the World Customs Organisation (WCO).
The Concessionaire and its technical and financial partners will invest a total of $3.2 billion to fully automate the Nigeria Customs Service, in Phase. In essence, the Federal Government will pay nothing to the concessionaire and its partners. Phase 1 will run from 2022 to 2025.
Other aspects of the project will be deployed in Phase 2 and Phase 3.
This investment will be spent in areas that plug the current loopholes in the operational and administrative functions of the Nigeria Customs Service. By plugging the loopholes, the consortium and the Federal Government have projected that revenue that will accrue to the Federal Government will be at least $176 billion. Clarifying this, the Managing Director, Dr. Jummai Umar-Ajijola said that this is a conservative estimate.
WHAT ASPECTS OF CUSTOMS ACTIVITIES DOES THE PROJECT COVER?
You will recall that Nigeria began implementation of WCO guidelines on Customs automation, but the current system deployed has now become a legacy system, that requires total overhaul, to meet new demands of the Nigeria Customs Service.
In addition to overhauling the platform, PREMIUM TIMES gathered that the project will also address the inefficiencies in the administrative work of the Service. This includes a Human Resources Management System, Document Management System and Business Continuity Management system. By the time the project is fully implemented, it will cover all areas of customs activities, including duties collection, clearance operations and border security.
Nigeria Customs Service has said that the project will require that all its personnel become computer literate and this is a major aspect of the project. The capacity building aspect of the project, will include comprehensive training of Nigeria Customs personnel in technology adoption and deployment, including becoming certified programmers for the successful running of the project when the Concessionaire hands over.
IS THIS A NEW PHENOMENON?
No. Customs modernisation projects are being implemented around the world as part of efforts to harmonize global trade regimes and simplify trading across borders. Many countries are complying with WCO requirements and standards and if Nigeria is to benefit from global trade expansion, the country must move in tandem with the rest of the world.
In addition, if we are to take full advantage of the increase in trade volumes projected under the Africa Continental Free Trade Agreement (AfCTA), then it is a must that the Nigeria Customs Service and all other government agencies involved in the trade facilitation value chain, modernise.
Modernisation is inevitable and the Customs Modernisation Project has come at a right time when the country can truly experience the gains from an interconnected world. This is so as many small and medium businesses take advantage the various export promotion schemes of the government.
WHAT ARE THE BENEFITS TO THE NATION?
The major advantage of the project is the significant growth in the revenue profile of the Federal Government. The project will generate in excess of $176 billion to the Federal Government over the life of the concession. The project will bring Nigeria at par with the rest of the word in the deployment of technology to facilitate international trade.
The economic diversification activities of the Federal Government will receive a strong boost by providing further ease of cross-border trading.
Premium Times
