Nigeria loses $8.810bn annually to lack of e-Customs modernization — FG

The Federal Ministry of Finance has estimated revenue losses arising from the absence of electronic-modernization of operations of the Nigerian Customs Service (NCS) to the tune of $8.810 billion annually.

This was even as drama of some sort engulfed the public hearing of the Joint Committees on Customs and Excise, Finance and Banking and Currency of the House of Representatives probing the delay in the take off Nigeria Customs Services E-Customs modernization project on Monday in Abuja.

The project when completed is expected to automate the activities of the Service, streamline the finances and stop revenue leakages from the system.

Specifically according to the Ministry, Nigeria is currently losing about $8.810bn annually from non-implementation of project just as the project is projected to generate about $176.2 billion within the 20 years concession period.

In her presentation to the Committee, the Minister of Finance, Mrs. Zainab Ahmed who was represented at the hearing by the Director, Home Finance, Stephen Okon said that there were pending court cases which had delayed the project.

“There is no doubt that the pending cases are impeding the commencement of the E-Customs Project. In order to pave way for the take-off of the project, the Ministry is liaising with the Office of the Honourable Attorney General of the Federation to ensure that the arbitration is speedily concluded. This we believe could settle all the pending matters and allow the E-Customs project to commence without further delay”, she said.

Delivering his speech at the hearing titled “Need to Resolve the Debacle Between Central Bank of Nigeria (CBN)/Technical Committee on Comprehensive Import Supervision Scheme (CISS) and Adani Mega System Ltd Hindering the Take Off of Nigeria Customs Services E-Customs Modernization Project,” the Comptroller General of Customs, Col. Hameed Ali (retd) represented by the Assistant Comptroller General (ICT), Galadima Saidu said that the matter had been previously heard and dispensed with by the House, wondering why it was reopening it.

He said that the contractor, Adani Mega System Limited who was supposed to execute the contract had been relieved of it.

“Adani Mega System Limited is to “Build, Operate and Own” scanning services infrastructure at designated ports across Nigeria without consultation or knowledge of the Federal Ministry of Finance or Nigeria Customs Service.

“This information was leaked to the Service by a whistle blower who was introduced to the NCS by the House Committee on Customs, backed with relevant documents.

“Consequently, the Chairman of the C138 Committee was invited by the Comptroller General of Customs and after series of discussions, he was made to realize that the Committee being a non-juridical person lack the capacity to enter into any legal agreement.

“Furthermore, investigations carried out by the Service revealed that Messrs Adani Mega Systems Limited outsourced the agreement to an unauthorized third party Adani International Limited (UK) registered 4 months after the agreement was signed and the Company has since been dissolved ( Copy of the search result is hereby enclosed as Annex A).

“Therefore, the assertion by Adani Mega System Ltd that its international partner has a proven track record, capacity, expertise and competence to execute and operate within the project field covered by the agreement was false and misleading.

“It was upon the realization of this misrepresentation that the Committee on CISS canceled the agreement entered into with Messrs Adani Mega Systems Limited, via a letter Ref:TED/DIR/GAM/GEN/Ol/OZS dated 18th September, 2017 (Capy attached as Annex ‘B).

“It is worthy of note also that the House of Representatives Joint Committee On Finance, Customs and Public Petition passed a resolution suspending the Concession Agreement on e-Customs pending the outcome of an Investigative Hearing.

“The hearing was conducted and the Committee Vide a second letter NAS S/9/CHR/2019/JOINT/002 dated 20th December, 2019 (Copy of the letter is hereby attached as Annex C) stated that after due consideration of the process towards the award has found no breach in the award of the contract for the e-Customs Project.

“They therefore advised that the Contract Agreement should continue pending the ratification and adoption by the full house when the report is laid before it.

“The then Joint Committee had diligently investigated the award of the e-Customs Modernization Project to a Consortium made up of two Companies who have complied with one of the requirements in the Letter of Award by jointly registering a Special purpose Vehicle known as E-Customs HC Project Limited and also reviewed the responses received from the Consortium, the Public and relevant Stakeholders on fundamental issues bordering the capacity of the Consortium to deliver and their compliance to the Procurement Act 2007.

“The findings of the then Joint Committee also showed that there was strict compliance to the Procurement Act 2007 and that the Consortium that was selected exhibited high technical expertise and financial capability to execute the project. After due consideration of the process of award, the Joint Committee found no breach since none of the extant laws were subverted. Hence, the Committee recommended that the agreement be finalized and the Consortium awarded the Contract (Copy of the House Committee’s report is attached as Annex D). It is therefore curious that the same House is raising the issue over again,” the Customs boss stated.

The use of the word “curious” angered the lawmakers, prompting a member of the Committee, Hon. Ndukwe Uko Nkole to ask the CGC to withdraw the remark and tender an apology.

“Hon. Colleagues, as a rider to what my colleague has submitted, chairman, banking and Currency, the CG of customs, his address to this parliament, especially in paragraph 4, is very derogatory to the parliament and it is very wrong for a public officer, an appointed officer to address elected representatives, that he’s curious. So I demand that the CG of customs must apologize to this parliament for using such a derogatory statement on the parliament,” he said.

Responding, the lead chairman of the joint committee and substantive chairman on Customs and Excise, Hon. Leke Abejide asked Nkole to read the paragraph again.

Nkole did and added that “The House that has a supervisory role by hierachy, the parliament towers above. Then why would you respond in such a manner using such a word to your supervisors? Mr Chairman, I take exception to this and as a responsible parliament I expect that the CG of customs should withdraw and apologize to the parliament over the statement. It’s wrong in its entirety.”

In his response, Abejide said “Your observation is noted. I think the co-chair spoke on it earlier but let us hear from the CG himself.”

Given the opportunity to speak, Saidu veered off the issue at stake, speaking about the importance of the project.

But another member of the Committee, Hon. Bamidele Salam interjected, insisting that the CGC must address the issue raised by Nkole.

He said, “Mr. Chairman, point of order, please, “I think we need to get this very clear. The remark and the demand of Rt. Hon. Uko Nkole is not about whether…”

At this juncture, the CGC interjected.

But Salam said “Excuse me, please! We know about the importance of this project and programme. This remark that you made, you said it is curious that the House is raising this matter. What’s curious about it? That’s the issue. It is not about whether this is a very needful project. We, ourselves know and you can see that even from the speech of the Chairman Customs earlier on, unfortunately, you came very late which should have been the first point of your comment here”.

Again, Saidu said “But I apologized”.

But Salam continued “Excuse me, please. The House raised a matter over which we have the Constitutional power to raise. It is disgraceful to the House and that’s the point he’s making. And that is the point you need to address. Mr. Chairman, that’s my submission. He’s dodging the main point raised by Hon. Uko Nkole.”

“Off your Mic”, chairman Abejide quipped.

Intervening in the matter, a co-chair of the joint committee and substantive House chairman, Committee on Banking and Currency, Hon. Victor Nwokolo said that the hearing will be postponed.

He was particularly angry that Adani Mega System didn’t make any submission.

He said: “Off your Mic, Hon colleagues, if I heard him well. He apologized. We rest for today. It boils down to the same thing I have said that from the submissions, the matter is still in court. That’s one. Two, Adani, you said you have something to say.

“What we are saying is that as at this moment, you are not ready. Whatever caused it whether human, you are not ready. Both agencies have given you examples. They came with hard and soft copies and if you have given us soft copy by Friday, we would have gone through them. Now, you are bringing us soft copy after we are sitting, it is difficult for us to peruse the soft copy. Now, you go and tidy up your documents. That’s what I suggest. Go and put your papers in order. The matter is in court. It’s been said here repeatedly. You have three suits. In fact, we are even urging you to go and do a consolidation of suits because they are all related,” Nwokolo said.

Also speaking, the Co-chair, Hon. Chike Okafor representing Chairman, Committee on Finance, Hon. James Faleke moved the motion for adjournment.

“The two points have been made. One, this matter is in court and again, another very key point is that Adani mega systems, we don’t have your submission and so, we can’t speak. So, it’s also part of the reasons why we are considering to take an adjournment. My co-chair, if you don’t mind, I can move for us to take an adjournment”, he said.

Reacting, Abejide expressed surprised that Adani did not make any submission.

“Adani, I am very surprised. We did advert in three national dailies for three days asking for submissions. We specifically mentioned Adani because you are an issue in this project. But I am surprised that you didn’t make any submission. You didn’t see the adverts in the national dailies? You don’t read papers? So, I will allow my colleague to move his motion”, he said.

“We are going to adjourn this hearing till 4th of March, 2022 to allow the remaining parties like the Central Bank of Nigeria CBN, Adani mega systems to present their own submission and again, if possible, go and withdraw the matter before that date so that we can have time to resolve the matter amicably. It is an advise. I am asking you to do so that when you come on the 4th, we will sit down, discuss and resolve it,” Abejide said.

Earlier in his welcome address, the lawmaker said that Nigeria was losing over the the sum of $8.810 billion for not implementing the project.

“The cost of concession implementation over a 20-year period is $3.1 Billion American Dollars and the project is projected to generate about $176.2 Billion American Dollars within the 20 years Concession period. We equally understood the SPV is to recover their investment based on negotiated and staggered recovery strong ratio from the Comprehensive Import Supervision Scheme (CISS) and Nigerian Export Supervision Scheme (NESS)

“This joint committee shall appreciate your openness to let us know where to come in to ensure the obstacles are done away with to allow the project commence in earnest so as to reduce to the barest minimum the issue of borrowing money to fund our National Budget yearly.

“The the sum of $8.810 Billion American Dollars will be generated yearly from the implementation of the project which I believe shall be more if properly implemented and this will go a long way to reduce our vulnerability to external debts and it will strengthen our currency too,” he said.

(Daily Independent)