A Look at World Bank’s Verdict on Nigeria Customs Service

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The World Bank ranking of Nigeria among the 15 lowest-performing countries in the world, as regards the efficiency of its customs service and border management processes, shows that the leadership of the Nigeria Customs Service may have abandoned its duty for politics, writes Eromosele Abiodun

On the 27th of August 2015, President Muhammadu Buhari approved the appointment of Col. Hameed Ibrahim Ali (rtd) as the new comptroller-general of the Nigeria Customs Service (NCS). He replaced Dikko Inde Abdullahi, who retired from the NCS on August 18. Ali was appointed to transform the NCS, eliminate corruption and ensure transparency and efficiency. Rather than focus on processes that will engender efficiency, the leadership of the NCS embarked on a war of attrition with stakeholders in the name of meeting revenue target.

In a bid to meet such targets, analysts believe, forced the NCS leadership to employ measures it thought would help it achieve success. Apart from its fight with the National Association of Auctioneers (NAA), the NCS has also clashed with the Association of Nigeria Licensed Customs Agents (ANLCA) and National Association of Government Approved Freight Forwarders (NAGAFF), with both bodies threatening to shut down the ports over unfriendly policies by the NCS.

That is not all; since he assumed office as the customs boss, Ali has consistently promised to acquire scanners to ease clearance of cargo and enhance trade facilitation. That has not happened. The customs still do physical examination, a procedure that delays cargo clearance and aid corruption. Bureaucracy and corruption in customs clearance processes have long posed significant challenges to the trading community in Nigeria. Operationally, clearing agents are facing a lot of hiccups. Also, the level of compliance on customs-related matter is quite low; that is why customs don’t facilitate trade.

Ranking

It was therefore not a surprise when the World Bank in its report described the NCS as inefficient.

The World Bank in its report ranked Nigeria among the 15 lowest-performing countries in the world as regards the efficiency of its customs service and border management processes.

The ranking is contained in a World Bank Connecting to Compete Report 2018 on trade logistics in the global economy, which evaluated the logistic performance of 160 countries, using data gathered through a worldwide survey of logistics professionals on how easy or difficult they experienced trade logistics along six generic dimensions.

The dimensions were customs efficiency and border management clearance, quality of trade and transport-related infrastructure; ease of arranging competitively priced international shipments; competence and quality of logistics services; ability to track and trace consignments; and the frequency with which shipments reach consignees within the scheduled time.

Across all the indicators, Nigeria took the 110th place out of the 160 countries, one of the bottom 50 performers in the world.

The report stated that Nigeria has a level of logistics constraints typical of low- and middle-income countries.

In terms of customs efficiency, Nigeria emerged 147th, logistics infrastructure, 78th; international shipments, 110th; logistics competence, 112th; tracking and tracing, 92nd; and timeliness, 92nd position. 

For the West African subregion, Cote d’Ivoire clinched the top position as the best-performing country in trade logistics with a global ranking of 50. Benin Republic was next at 76th position; Ghana, 106th; Nigeria, 110th; Togo, 118th; Gambia, 127th; Liberia, 143; and Sierra Leone, 156th.

The report said, “The six LPI indicators are divided into two main categories: areas for policy regulation which indicates main inputs to the supply chain, which includes customs, infrastructure, and services; as well as supply chain performance outcomes, which corresponds to LPI indicators of time, cost, and reliability — timeliness, international shipments, and tracking and tracing.

“Because operators on the ground can best assess the vital aspects of logistics performance, the LPI relies on an online survey of logistics professionals from the companies responsible for moving goods around the world: multinational freight forwarders and the main express carriers.

“Freight forwarders and express carriers are best positioned to assess how countries perform. Their views matter because they directly affect the choice of shipping routes and gateways, thereby influencing the decisions of firms to locate production, chooses suppliers, and select target markets.”

The report listed the bottom 10 countries in the world to include Afghanistan, Angola, Burundi, Niger, Sierra Leone, Eritrea, Libya, Haiti, Zimbabwe and Central African Republic.

“These are either fragile economies affected by armed conflict, natural disasters, and political unrest or landlocked countries naturally challenged by geography or economies of scale in connecting to global supply chains,” it said.

 Blame

It is not just the World Bank that is not happy with the NCS. Last week, customs agents in the country accused Hameed Ali of favouring officers of northern origin in postings to head most of the customs commands across the country.

Speaking on behalf of his colleagues, President, National Council of Managing Directors of Licenced Customs Agents (NCMDLCA), Lucky Amiwero, accused the customs boss of lopsidedness in the promotion of officers.

On Ali’s three years in office, he said, “Although there have been some improvement in terms of promotion but it is as if the (Nigeria) Customs Service is just for the northerners.  Almost all the area commands you go, you see northern officers. This is not too good for a government agency. There is need to redesign the (Nigeria Customs) Service such that it will not be a northern service whereby northerners are placed in certain positions. Promotion has to be redistributed to comply with the procedure. What is happening in customs should be redirected so that people can be placed properly.”

Amiwero also scored Ali low on performance after three years, saying that the ex-military officer has failed to carry out much-needed reforms in the NCS.

He said, “Reforming customs is not just posting people from one place to the other. I don’t think customs has been reformed because the tools for reformation are not there; no scanners at the ports, procedures are still archaic, and containers spend more time at the port because of complex alert.

“Customs’ job is about procedure and there are many procedures that are not complied with in terms of convention and agreement.  For instance in Ghana, they have the satellite tracking system and they are also meeting up the challenges of the single window. But what do we have here in Nigeria?

“The CG is a stranger as far as customs is concerned. He cannot reform customs because most of the tools are not there and the procedures he does not know. He is not a seasoned officer. In terms of revenue, are we really having the cargo coming in? What customs is doing is imposing value and killing the industry because most of the cargoes are leaving the country.”

Ease of Doing Business

On his part, Director General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, scored the customs boss low on the Ease of Doing Business and facilitation of trade.

According to him, “On the business climate perspective, things have not been easy for us at all because the focus of customs is too much on revenue. They are too relegated in the Ease of Doing Business to the background. Particularly on the issue of arbitrary valuation, issues of classification and the problem of Customs operatives intercepting containers on the road. All these make things very difficult for business people.

“Trade facilitation is almost not on the agenda of customs. Main agenda and the key performance indicator for Customs have always been revenue generation which is why not more attention is being given to Ease of Doing Business and trade facilitation. There is too much focus on revenue generation and it is coming at a great cost to businesses,” he said.

The LCCI boss is also of the opinion that reformation of the service under Ali has not recorded any remarkable progress as envisaged, noting that it will be easier for an insider who has knowledge of customs operations to reform it than “an outsider” like Ali.

A retired customs officer, who pleaded anonymity said Ali had not achieved much in terms of discipline within the rank and file while corruption in the service has risen to a larger scale.

“Discipline has been shored up, but it is not yet uhuru when we talk about discipline in the service. Corruption is still what it is, even at a larger scale. The fight against corruption in the service shares the same fence with the fight against corruption in Nigeria and impunity is still the order of the day in the service.

“In terms of restructuring, the CG has tried to align the service with military structure by the establishment of the Customs police. The intelligence unit has also been given a more professional touch. In terms of revenue generation, we saw a remarkable increase, but the argument was that what was the difference in exchange rate during the former CG’s tenure and the present administration? The CG may have tried in some aspects within available resources, but he has to put more effort in making government provide tools for the service. For example, none of the scanning machines we have at the port is functioning,” he said.

The Founder, National Association of Government Approved Freight Forwarders (NAGAFF), Boniface Aniebonam, also said “high-level corruption” still existed in the service.

He, however, argued that Ali had been doing his best within available resources to achieve the mandate handed to him by the President.

“We all know he has good intentions in line with the mandate given to him by the President, but the port is extremely corrupt. But every stakeholder has a role to play for the NCS mandate to be achieved. He cannot succeed unless everybody joins hands with him.

“For example, on matters of compliance to regulation, the level of compliance on customs-related matter is quite low and that is why customs don’t facilitate trade. So sometimes, when people bring up the issue of trade facilitation, I believe they are only misinterpreting it because customs cannot facilitate illegitimate trade or trade that is in breach of the law. In terms of promotion, a lot has happened and these are things that spur the willingness of an officer to do the job,” he said.

Beginning

Ali was appointed at a time the NCS’s reputation was marred by corrupt practices and allegations of fraud against its former management.

Ali’s anti-corruption posture was reportedly one of the reasons Buhari considered him best fit for the customs top job.

Considering his military background and being an outsider , Ali’s appointment was however criticised by stakeholders, including customs agents and legal practitioners, who unanimously voiced their opposition to the appointment, which they described as a retrogressive step; as they said Ali might not have what it takes to steer the NCS to modernisation.

On September 10, 2015 when Ali assumed duty, he stated that his mission was to undertake reforms and restructuring that would strengthen the capacity of the NCS to generate more revenue for the nation.

In his maiden meeting with the Customs management, Ali had stated the mandate given to him by President Muhammadu Buhari.

He said, “The mandate he has given me are three basic things: Go to Customs, reform Customs, restructure Customs and increase the revenue generation, simple. I don’t think that is ambiguous, I don’t think that is cumbersome.”