The Honourable Minister of Finance, Budget And National Planning, Mrs. Zainab Ahmed, has in a memo presented at the Federal Executive Council (FEC) yesterday sought the ratification of President Buhari’s anticipatory approval of the contract for the modernisation of Nigerian Custom Service (NCS) processes and procedures.
According to her, the purpose of the memo presented to the Council was for a project that would enable the complete automation of the NCS processes and procedures using the application and information and technology in all aspects of the Customs administration, in favour of a firm known as e-Customs HC Project Limited for concessionary period of 20 years.
Ahmed had said that the consortium would establish a project special purpose vehicle (SPV) to enter a 20-year concession arrangement with the Customs and Infrastructure Concessional and Regulatory Commission (ICRC) for the Customs modernization project.
“The main objective of this project is to completely automate every aspect of the Customs business processes, procedures and services and to institutionalise the use of smart emerging technologies that will enhance the NCS statutory revenue generation and trade facilitation in the national economy,” she said.
The consortium, the public private partner (PPP) group, that have been approved for the project with the total investment in the sum of $3.1billion is the Special Purpose Vehicle (SPV) named Messers e-Customs HC Project Limited with four members. So, the Council ratified Mr. President’s approval for the PPP concession of a 20-year period to Messers e-Customs HC Project Limited, the concessionaire for the delivery of customs modernisation project. The Honourable Minister disclosed that $3.1billion is made up of capital expenditure (CApEX) and operating expenditure (OpEX).
According to Ahmed, “In May, 2019, FEC set up a National Trade Platform (NTP) Committee for e-customs project through national single window (NSW) project to review all aspects of the project. The Committee, among other recommendations, noted that e-Customs is not a substitute for the NTP, but a subset, which will facilitate the realization of the NTP.”
The Committee that led this process also looked at the national trading platform process that has been going on for years and confirmed that the Nigerian e-customs project is a subset of the national trading platform. The Nigerian Customs is now set to play its leading role in the national trading platform.
On the consortium partners, “while Bionica Technologies West Africa Limited and Bergman Security Consultant and Supplies Limited are lead sponsor and co-sponsor respectively, Africa Finance Corporation (AFC) is the lead financier, and Huawei Technology is lead technical service provider,” Ahmed also said.
She further said: “This is a project that will not have an immediate cost to the government, the investors are providing all of the financing and this investment will be deployed in three phases. The investment will be recovered over concessionary period of 20 years.
The Nigerian Customs currently has some level of automation services but it is not holistic. This is an end to end automation of all of NCS’s processes and it is going to bring huge value to the country. “This investment of $3.1 billion is broken down into capital investment of $1.2 million which will be done in three phases over 36 months by these investors and $1.9 million is the projection of the operational cost over the 20-year period of the implementation of this project.
This project has the potential to yield up to $176 billion of revenue over the concession period The consortium 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. “This is the best possible way for Nigeria to roll out important capital project using funds from the private sector and providing service for the use of Nigerian people and businesses.
On the question whether the Customs is going to overtake petroleum as source of revenue for the country, the Honourable Minister said: “We hope that at some point revenues from oil will begin to be insignificant compared to revenue from the non-oil sector in the Nigerian economy. That is our aspiration and that is the true meaning of diversification.”