Modernisation: Another Game Changer for NCS Under Adeniyi By Abdulsalam Mahmud
Despite its wealth of natural resources, Nigeria struggles with insufficient revenue to fund its governance and development projects.
The International Monetary Fund (IMF) noted last December that Nigeria’s revenue, at nine percent of its Gross Domestic Product (GDP), is too low to support its social safety nets and development needs while protecting vulnerable households.
In this year’s budget presentation, Minister of Budget and Economic Planning, Abubakar Bagudu, identified revenue generation as the primary fiscal challenge to Nigeria’s viability.
He mentioned that the federal government is reviewing current tax and fiscal policies to improve revenue generation.
Last October, Era Dabla-Norris, Assistant Director, Fiscal Affairs Department at the IMF, highlighted Nigeria’s low revenue-to-GDP ratio compared to other emerging markets.
To address these concerns, the Nigerian government has developed policies and programs to boost revenue generation and accelerate economic growth.
One key initiative is the Nigeria Customs Service Modernisation Project, launched in 2022 by the administration of former President Muhammadu Buhari. This project aims to diversify government revenue and reduce dependence on the oil sector.
The modernisation project intends to enhance the services of the Nigeria Customs Service (NCS) by enabling it to generate more revenue and facilitate trade. Implemented through a Public-Private Partnership (PPP), the project was formalized in a Concession Agreement signed two years ago between the federal government, represented by the Nigeria Customs Service Board, and Trade Modernisation Project (TMP) Limited.
The project aims to digitize customs operations at ports and streamline duty collections via the Unified Customs Management System (UCMS).
It involves seven working groups: Software Development, Geospatial, Project Management, Networking and Telecom, Server and Cloud, Cybersecurity, and Non-Intrusive (Cargo Scanners).
Expected to boost federal revenue by $250 million over the concession’s duration, the project will unfold in three phases. The first phase (years one to six) focuses on deploying necessary systems.
The second phase (years seven to 13) involves managing, maintaining, and replacing components. In the third phase (years 14 to 20), TMP Limited will hand over operations to customs officers after comprehensive training.
The project promises numerous benefits, including advanced technology infrastructure for efficient services to businesses and government agencies.
The Concessionaire will provide operational support, maintenance, and training throughout the 20-year concession period.
The National Public Relations Officer of Customs, Abdullahi Maiwada, at a recent interface with journalists, underscored the project’s role in facilitating trade and revenue collection, while General Manager of TMP Limited, Mr. Ahmed Ogunsola, highlighted ongoing collaboration with NCS to achieve outlined milestones, including the development and deployment of a new Customs management system.
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Ogunsola said that the system’s software, described as the Unified Customs Management System (UCMS), has seven layers of security designed to withstand cyber attacks.
He noted that the TMP has been built foolproof against cyber-attacks adding that the TMP was built with the latest security network gadgets to ensure its safety and integrity.
He described the system’s software as the Unified Customs Management System (UCMS), which has seven layers of security built to resist cyber attacks.
On the ease of revenue collection, Ogunsola said: “The TMP is the automation of the business processes of the NCS to simplify and enhance the experience of stakeholders in the trade value chain as it is expected to ease export and import clearances in paying duties and obtaining releases of good, adding that the project was incorporating high level of security for its operations.
“We are operating seven layers of security in terms of building the software to be deployed and we are working with one of the leading cyber security firms in the world to ensure the safety of the software.
“Similarly, there is a code level cyber security analysis of the software as well. Before any code that is written for the software is pushed into the software, it analyses and assesses it. In fact, we are developing the ISO 27001 information security standard; that is the highest you can get in the world”.
Maiwada further explained that the modernisation project will aid trade facilitation, efficiency in customs delivery, which remains the essence of trade modernisation.
“The project is just about simplification, standardisation, harmonisation and automation of processes and procedures. It is part of our efforts to ensure that we facilitate trade and effectively collect revenue for the federal government and enforce fiscal policies of the government in terms of anti-smuggling and other responsibilities”.
Specifically, he said under the Unified Customs Management System, the service would be able to scan 200 containers within an hour, adding that this would significantly aid the decongestion of the nation’s ports.
While customs modernization is still in its early stages in Nigeria, it is well-established globally. The Automated System for Customs Data (ASYCUDA), managed by the United Nations Conference on Trade and Development (UNCTAD), is used in over 80 countries.
The European Union, the United States, the UAE, and China have successfully implemented customs modernization, significantly enhancing trade facilitation and port efficiency.
Automating Nigeria’s customs processes will increase revenue by improving trade experiences and proper duty collection, addressing revenue leakage.
Although this disruptive technology may lead to job displacement, it will create new jobs through the service points required for the project’s effective functioning.
It is imperative that stakeholders support this project designed to digitize customs operations at Nigerian ports comprehensively. The Customs Modernisation Project, aimed at streamlining duty collections and enhancing efficiency and transparency, is crucial for Nigeria’s economic growth.
Therefore, diligent efforts must ensure the project’s full and efficient implementation, as it offers significant benefits for Nigeria in many vital areas.
*Mahmud is the Deputy Editor of PRNigeria and wrote via: [email protected].*
