Analysts have bemoaned the 2017 performance of the Nigeria Customs Service, putting it below the performance in previous years. In this report, SAMSON ECHENIM writes that the prevailing policy environment formed a major consideration, while looking forward for a better performance in the current year.
AT the end of 2017, revenue generation by the Nigeria Customs Service stood at N1.037 trillion 2017, about 27 per cent higher than its target of N770.57 billion for 2016.
At the end of 2017, seizure of contrands and banned goods, as well as smuggled imports hit a total of 4,492, with a Duty Paid Value, DPV, of N12.78 billion.
The seizures include 2,671 pump action riffles, dangerous drugs, vehicles and rice among others. The Service also arrested a total of 207 suspects in connection with the seized goods.
Following the release of its revenue figures for 2017, some analysts have posited that despite having higher figures for 2017, when compared with previous years, especially 2014, before the advent of the current Customs management, the service’s revenue generation value in real terms is on the downward trend. They had compared the value of the naira in 2014 with its value in 2017 and arrived at the fact that 2014’s N977.09 billion revenue generations was higher than the N1.03 trillion.
Such analysts however, may lack a strong grasp of prevailing issues around the nation’s trade system, especially, with regards to Nigeria’s current trade policies targeted at growing the local economy, which when considered, could change their opinion.
For instance, the country’s recessive economy held sway for the larger part of 2017, as the government struggled to maintain an unfriendly import policy to help the local industries grow. One of the popular policies that was in the way of importation and its tariffs was the removal of 41 items from importable products for which shippers could source forex officially.
Again, the Federal Government, in working to create market for locally produced rice, further stiffened importation of the product, with the Customs Service maintaining high level intolerance for smuggling of the product from ports and land borders.
Consequently, rice, which made up N56.8 billion of the service’s revenue generation in 2014 only accounted for N264.85 million in 2017.
The analysts’ position can only be sustained, if the volume of trade and tariff remained the same between 2014 and 2017.
According to available Customs data, although the volume of imports declined, collection per volume increased. The data showed that in 956,574 vehicles were imported in 2014; 558,517 were imported in 2015; 451,507 in 2016, while in 2017, vehicles imported further declined to 399,556 units. Duty collected by the Customs for the respective years were N122 billion, N111 billion and N137 billion.
A shipper, Mr James Onyeagwu captured the scenario succinctly, saying, ‘’The enforcement of fiscal policies of 2017 led to the decrease in the average duty rate. The average duty rate which used to be 12.54 per cent was reduced to 11.1 per cent. In some cases, there was total removal of duty rates, such as for machineries and agricultural projects.”
He also noted that under the policy, which is still being maintained, tariffs on Prefabricated Agricultural Green House imports, which was 20 per cent, was dropped to zero per cent to encourage development in that area.
“Between 10 per cent and five per cent duties on Agricultural Machinery imports was also removed; To help the Automotive Industry Development Project, the Federal Government also in its wisdom reduced tariffs on semi-knocked down vehicle parts, SKDs, from 35 per cent to only five per cent and concession of one SKD to two fully-built unit, FBU, cleared without payment of 35 per cent levy.
‘’With the reduction in the average duty rate, a decline in revenue could have occurred but for due diligence, tax collection per unit was increased by 15 per cent. It was under this challenging environment in 2017 that the Customs Service collected the highest revenue ever for the Federal Government,” he said.
However, Customs Public Relations Officer, Mr Joseph Attah said generation of over N1 trillion in 2017, “was possible because of strict deployment of digital identification method which enables Customs officers to identify consignment such as vehicles using the mandatory vehicle identification number, VIN.”
‘’Declarations on vessels increased drastically in 2017 due to the use of digital application to locate vessels on Nigeria waters and request for payment of appropriate duties as data of the vessels are available through the digital platform,” he noted.
He said that the NCS received Federal Government support in 2017, adding that this would translate to more patrol vehicles and equipment to perform even better in 2018.
“We are prepared to do more of what we did last year and we look forward to breaking the record of 2017 in 2018,”Attah added.
Attah, who denied any form of friction between the Customs Service and the National Assembly, as reported recently clarified that the service had no issues with the Legislature.
“The management of the Nigeria Customs Service is not in competition with any agency of government. We believe that records are always there to be broken. As our performance in 2017 has broken the records of past collections, we look forward to 2018, or indeed any future Customs management breaking this record in the interest of the nation,’’ he said.