Nigeria: A Time To Keep, And A Time To Automate

Last Updated: 21 February 2019
Article by Ikechukwu Nwakanma

Border security and international trade are two sides of a coin that constantly present significant concern – due to the inherent risk and benefit traditionally associated with both endeavours. The UK has chosen BREXIT to retake control of its borders, immigration and trade autonomy. The longest government shutdown in American history was connected to protecting America's borders from smuggling, illegal immigration and loss of government revenue from the Mexican border. In the Middle East, Dubai Customs recently launched "iDeclare" – a smart app which enables passengers into Dubai declare their belongings, if needed, in only 5 minutes, rather than 45 minutes which was the average required time prior to the innovation. The revenue generated by this innovation is better imagined.

In Nigeria, the Customs Service (NCS) is second only to the oil sector, in revenue generation for the Federal Government, generating over NGN 2.3 trillion in the last 2 years. But the NCS is far from attaining peak revenue generation, and this portends both opportunities and risk. Opportunities to leverage private sector partnerships through a PPP arrangement, to finance the full automation of its operations, and the risk of being overtaken by 'sister' countries in Africa that have completely moved away from the manual operations of import and export surveillance to a full or semi automation of their customs operation, making them the international trade destinations in Africa.

In 2016 the Malawian Revenue Authority introduced ICT innovations to its customs service which enables it to link the operations of its customs with road traffic development and the Malawi Police Services to improve efficiencies and speed up clearance of motor vehicles. Several years ago, Dubai's customs service launched an automated project (Mirsal 2) that deploys technology to enhance customs operations and ensure more effective border management. Like these countries, Nigeria copes with an evolving environment of international trade in the 21st century. But unlike them, Nigeria has failed to innovate and thus even with seemingly impressive annual revenue generation, much more can and should be received in revenue by the most populous black nation in the world. According to a report by allAfrica published on July 18, 2017, the Nigerian Senate Committee Chairman on Custom, Excise and Tariffs was quoted to have reported that over NGN 4.35 trillion worth of goods are smuggled into the country each year. The World Bank also disclosed recently that a staggering sum of NGN 750 Billion ($5 Billion) worth of assorted goods are smuggled into Nigeria through Nigeria's border with Benin Republic every year.

Something must be done. The Nigerian government has made strides in enhancing the ease of doing business. When the NCS introduced ASYCUDA++ and the Nigerian Integrated Customs Information System (NICIS) into its operations in 2017, annual revenues skyrocketed by almost 500 billion Naira. ASYCUDA++ is a software developed in the early 80's following the United Nations Conference on Trade and Development (UNCTAD) to automate the operations of customs. Currently, about 80 countries use this software. A PPP partnership would however enable the deployment of cutting-edge ICT tools in Nigeria's customs operations. Some of the automation tools that can be invested in, include infrared/ultraviolet tracking devices capable of detecting cargos or goods on land and water ways (to tackle smuggling and bring more revenue into government coffers); x-ray scanners for scanning cargos and goods (strengthening security); electronic clearance of goods using technologies such as block-chain (enhancing speed and efficiency); and technology that enables goods to be accessed and excise duties paid directly to the government, even without the physical presence of the importer at the ports and borders (enabling the fight against corruption).

One can therefore see the need to completely automate the operations of the NCS, to reap the full benefits of international trade and block leakage of revenue suffered in the hands of smugglers which comes at a time of great financial need in the country.

With a badly eroded security infrastructure and a diminished status in the eyes of the global community due to a ravaged economy, Nigeria has much to prove if she is to continue to enjoy the attraction of foreign investors. The government's 2017 Economic Recovery and Growth Plan (ERGP) has demonstrated a policy resolve to build an economy that is less dependent on the oil sector, and to leverage other initiatives through the benefits of Science and Technology Innovation (STI). It is time that resolve is matched by action, innovation and new private sector partnerships.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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