FG Approves $3.1bn for Customs Automation, Targets $176bn Revenue

  • Earmarks N13bn for automation of four airports

Omololu Ogunmade in Abuja

The federal government in pursuit of diversification of the economy is targeting $176 billion revenue from $3.1 billion concessionary investment for full automation of the operations of the Nigeria Customs Service (NCS).

The Federal Executive Council (FEC) has also approved N13.122 billion for the automation of four Nigerian airports and consequent transformation of the airports from their current analogue to full digital operations

Briefing journalists after the 14th virtual Federal Executive Council (FEC) meeting in the State House, Abuja yesterday, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said whereas some services of the NCS are automated, the vast majority of them are still analogue and hence, the necessity to bring the entire operations of the agency to full modernisation and automation for optimum output.

According to her, the $3.1 billion project, which she said would not cost the country a dime, would be concessioned to E. Customs HC Projects Nigeria Limited for a period of 20 years.

She listed sponsors of the project as Bionica Technologies West Africa Limited, and Bargain Securities and Supplies Nigeria Limited.

She also listed the Africa Finance Corporation (AFC) as the lead financier and Huawei Technology as a technical service provider.

She explained that the $3.1 billion approved yesterday was an anticipatory contract for customs’ full-fledged transformation.

She said: “The purpose of the memo we presented to council was for a project that will enable the complete automation of the Nigerian Customs Service (NCS) processes and procedures, using the application and information technology in all aspects of customs’ administration, in favour of a firm known as E. Customs HC Projects Nigeria Limited for concessionary period of N20 years.

“The main objective of this project is to completely automate every aspect of the customs’ business and to institutionalise the use of smart and emerging technologies that will enhance the statutory function of the Nigerian Customs’ Service in the areas of revenue generation as well as trade facilitation and enhancement of security.

“The total cost of the project is in the sum of $3.1 billion. The consortium, the PPP group that has been approved is led by Messrs Y. Technologies with four other members.

“The committee that led this process also looked at the national trade impact process that has been going on for years and confirmed that the Nigerian e-customs’ project is a subset of the National Trade Impact and would prefer the Nigerian Customs to play its lead role in the national trading platform.

“The Bionica Technologies West Africa Limited, Bargain Securities and Supplies Nigeria Limited are lead sponsors and co-sponsors. We also have the Africa Finance Corporation (AFC) as the lead financier and Huawei Technology as a technical service provider.

“So, council today ratified Mr. President’s approval for the PPP concession for a 20-year period to Messrs E. Customs HC Project Limited as a concessionaire for the delivery of customs modernisation project.

“This is a project that will not have an immediate cost to the government. The investors are providing all of the financing and this revenue will be deployed in three phases and they will look over the investment in the concessionary period of 20 years.

“The key point is that it is not costing the federal government one thing. The $3.1 billion being proposed will be sourced by the sponsors and the partners.”

Ahmed who explained that the project would be implemented in phases, disclosed that these phases would involve a capital investment of $1.2 million in three years and $1.1 million projection of operational cost during the 20 years of implementation.

According to her, investors would only be paid for their services as scheduled and negotiated.

“This project has the potential to yield up to $176 billion of revenue for the project and the consortia that are providing this investment are going to be paid over time according to the schedule that is negotiated for their investments including their profits and cost.

FEC Earmarks N13bn for Automation of Four Airports

Meanwhile, the Federal Executive Council (FEC) also yesterday approved N13.122 billion for the automation of four Nigerian airports and consequent transformation of the airports from their current analogue to full digital operations..

Briefing reporters after the 14th virtual meeting of the council, the Minister of Aviation, Senator Hadi Sirika, said the approval was sequel to the presentation of a memorandum by the Nigeria Civil Aviation Authority (NCAA) for upgrading and refurbishing of control tower equipment at the airports.

Sirika, who listed the affected places as Lagos, Kano, Abuja and Port Harcourt airports, said the automation would enhance efficiency of the airports and reduce workload.

He also said the development would enhance speedy and automatic display of collected data from the runway about weather, wind, rain, macro burst, among others, on the control tower platform.

Sirika said instant display of data would enhance efficiency of the pilot in the air adding that the pilot will not have to wait for the next one hour before receiving reports from the tower because there will be instant transmission of information.

According to him, this new initiative will aid the advent of several flights into the airport.

He also explained that execution of the projects would be in two phases, with the first phase entailing the spending of $28,489,565 million, an equivalent of N3.491 billion including 7.5 percent value added tax (VAT) and a duration period of 12 months.

“Today, civil aviation submitted a memorandum to council which was consequently approved. The memo is to upgrade and refurbish the safe tower equipment in four airports – Lagos, Kano, Abuja and Port Harcourt.

“This is just to increase the efficiency of the airports and reduce the workload in the control tower and to automate what was hitherto analogue system to digital. Quick example is all of the data we collect at the end of the runways within the airports will now be displayed instantly on our platform in the control tower. Information regarding weather, regarding all of the components of weather, winds, rain, macro burst et cet era will be displayed automatically.

In his own briefing, the Minister of Communications and Digital Economy, Isa Ali Pantami, said the council also approved a memorandum seeking to direct federal government institutions to patronise Galaxy Backbone Limited.

In the same vein, Minister of Works and Housing, Mr. Babatunde Fashola, said FEC approved N10.589 billion for the completion of a 55-kilometre road in addition to N1.145 billion approved for the construction of emergency work on Gadan Zaima-Zuru-Gamji Road in Kebbi State.

According to him, the contractor had earlier carried out construction work on an area covering seven kilometres of the total 62-kilometre road in 2019 as an emergency activity at the cost of N1.145 billion.

He said yesterday’s approval of N10.589billion yesterday therefore was only meant to complete the reconstruction of the long road.

“The Ministry of Works and Housing presented a memorandum to council for the Gadan Zaima-Zuru-Gamji Road in Kebbi State for two approvals. The first was to ratify the emergency works that were undertaken over seven kilometers between and 2019 at N1. 145billion, and then to approve the award by the same contractor to now complete the balance of 55 kilometers which was approved also at N10.589billion.

“So, just by way of emphasis, we did emergency seven kilometers out of 62 kilometers. Because it was emergency, we need to come for ratification which was given and we now got approval to award the remaining 55 kilometers so that we can complete the road which was also given,” Fashola said.

Also briefing, the Attorney-General of the Federation (AGF) and Justice Minister, Abubakar Malami, said the council also approved N1.196 billion including VAT for the purchase of a-156 room building in Aviation Village, Abuja for the operations of National Drug Law Enforcement Agency (NDLEA).

He said the contract for the purchase of the three-wing two-storey building near the Nigeria Customs Service (NCS) building was awarded to Messrs Chachangi Airlines Nigeria Ltd. with the delivery period of four weeks.

Explaining the rationale for the decision, Malami said the purchase of the property had become compelling because since NDLEA moved from Lagos to Abuja, the staff of the agency have been scattered all over the capital city.