TRADE FACILITATION, BORDER DRILL AND IMPLICATIONS FOR NIGERIAN ECONOMY.
BY DC, JOSEPH ATTAH,
CUSTOMS NATIONAL PUBLIC RELATIONS OFFICER, ON THE OCCASION OF JIFORM ONLINE SUMMIT, SATURDAY, 9TH MAY 2020.
Nigeria Customs Service derives its powers from the Customs and Excise Management Act (CEMA) Cap 45 LFN 2004.
NCS functions include:-
Generation of revenue for the Federal Government of Nigeria
Suppression of Smuggling
Facilitation of Trade
Collaboration with international organizations viz, WCO, WTO, UNCTAD e.t.c
Trade Facilitation is the “simplification, standardization and harmonization of procedures and associated information flows required to move goods from seller to buyer and make payment”. Simply put, TF looks at how control/procedures governing the movement of goods can be reduced to ease ways of doing business in the international best practices.
As a responsible member of the World Customs Organization (WCO), the Nigeria Customs Service has introduced many measures to facilitate trade in Nigeria.
The commencement of destination inspection in 2013 with Pre-Arrival Assessment Report (PAAR) which enables advance documentation before arrival of cargoes in Nigeria. Upfront self assessment, electronic declaration and e-payment are all ways of facilitating legitimate trade.
The collapse of all hinter land check points and reduction of checkpoints along borders to 40km radius.
Introduction of one-stop shop, joint examination bays for all relevant agencies to examine container same time at the ports.
Direct Trader Input (DTI) – which enables Importer/Clearing Agents to self declare in the comfort of their offices and homes.
Continuous public sensitization on Import and clearance procedures
Palletatization of cargo to ease examination.
Introduction of fast track facility for credible Importers.
In all these, the greatest threat to TF is still non-compliance by stakeholders. Unfortunately, in our clime, there is high tendency to false declare, wrongly
classify, conceal goods, under or over value goods with the intention to either evade appropriate payment of duty or to launder money.
Consequently, operatives try to balance TF with National economy and Security interests. The consequences of facilitating illegitimate trade should only be imagined than experienced. If for instance, on the altar of trade facilitation dangerous items such illicit drugs, arms and ammunitions, are allowed easy passage or goods that should have paid 35% duty rate allowed at 5%, the nation will lose revenue and be confronted with all sorts of security challenges. In other words, all necessary action(s) should be taken to ensure that no prohibited item is allowed in under the guise of trade facilitation.
This therefore means that TF is easily implemented and appreciated where the compliance level of Importers/Agents is very high.
Over the years, Nigeria has been confronted by trans-border security and economic challenges. These challenges include arm banditry, smuggling, illegal migration, illicit drug trafficking and proliferation of light weapons among others which have led to increasing insecurity and economic downturn for Nigerians.
Nigeria Customs Service had engaged the Customs administrations of our neighboring countries several times drawing their attention to the need to comply with the ECOWAS protocol on transit of goods and persons. You may recall that the protocol came into force during former President Olusegun Obasanjo’s regime.
For clarity, the ECOWAS protocol on transit of goods demands that when a transit container berths at a seaport, the receiving country is mandated to escort same without tampering with the seal to the border of the destination country. Our experience has shown that our neighbors do not comply with this protocol. Rather, they break the seal of containers at their ports and trans-load goods destined for Nigeria. This action is fraught with security and economic consequences on the destination Country which is Nigeria.
Unfortunately all previous efforts including provision of Escort vehicles for them yielded no positive change.
Consequently, in order to deal with this situation, the NCS and Nigeria Immigration Service in collaboration with the Armed Forces of Nigeria (AFN) as well as the Nigeria Police Force (NPF) and other security and intelligence agencies commenced a joint border security exercise, codenamed ‘EX-SWIFT RESPONSE’ in 4 geopolitical zones of the country,
namely; South-South, South-West, North-Central and North-West on the
20th August 2019. The exercise is being coordinated by the Office of the National Security Adviser (ONSA) and is aimed at better securing our borders in order to strengthen our economy and address other trans-border security concerns.
In the area of security, the ongoing exercise has recorded a number of seizures and arrests that would have had grave security consequences. 697 illegal migrants have been arrested. Also, some items seized include: 106,280 of 50kg bags of parboiled foreign rice, 1,172 vehicles, 2,997 drums filled with PMS, 16,771 Jerri cans of vegetable oil; 66,000 litre tanker of vegetable oil; 656 motorcycles, 15,089 Jerri cans of PMS and 695 bags of NPK fertilizer used for making explosives among others. The estimated monetary value of the seized items is N8,759,015,371.44.
From statistics available, Seizures dropped since the commencement of the Partial Border Closure. This is because the increase in manpower and working tools from the participating agencies made it possible for rigorous patrol of all nooks and crannies of the porous borders. This sent fear down the spines of Smugglers with some of them re-routing their cargoes to Seaports raising revenue from such Commands.
It is important to note that about 90 percent of illicit drugs and weapons that are being used for acts of terrorism and kidnapping in Nigeria today came in through our porous Land borders. However, since this partial closure, the acts have been considerably reduced. This means that the arms and ammunition these terrorists and criminal elements were using no longer gain entry into the country through their usual points. In addition, the drugs which affect the health and the wellbeing of Nigerians have equally been reduced.
The partial border closure has so far curbed the smuggling of foreign rice into the country, in addition to other prohibited items. Our series of interactions and engagements with Rice Miller Association of Nigeria since the commencement of this exercise has shown that the border closure has impacted positively. Farmers have been expanding their farms engaging more hands (job opportunities) as a result of patronage. Coincidentally that decision is helping to curb the hardship brought by Covid-19 pandemic now.
The global lockdown now mean that Nationals depend more on locally produced food items since international trade has been negatively impacted by the outbreak of Coronavirus. The consequences of depending on foreign foods at this difficult time of global lockdown are better imagined than experienced.
On revenue generation of the Federal Government, NCS daily revenue collection before border closure ranged between N4 to N5 billion, NCS now collects N5 to N6 billion daily. This will in turn be used to build more infrastructures and develop critical sectors of the nation’s economy. The border drill has also curbed diversion of petroleum products from Nigeria to neighboring countries. NNPC record shows 30% drop in fuel consumption meaning we have been subsidizing fuel for our neighboring countries.
The decision to partially close the land borders and address those concerns that necessitated the action is providing opportunities for ECOWAS to identify and discuss the challenges and proffer solutions. Possibly this should include strict punitive measures that must be taken against any member state that may be willing to engage in activities that is capable of compromising the neighbors security and economic interests.
Nigerian economy is expected to receive a boost with more interest now on local production and higher revenue.
The on-going diplomatic engagements aimed at resolving the issues will eventually smoothen the way for the forthcoming ACFTA which Nigeria with her population, human capital and production capacity is expected to occupy a prime place.
Thank you for your attention.