ISSUES: Again, Nigeria Customs Service up for Sale (Part 1)

– Why FMFBNP, Freight Forwarders, NACCIMA, MAN, others are against Customs

By Innocent Orok

Just like the recent aquisition of the over 102 years old Union Bank of Nigeria PLC ,by a barely two years old Titan Trust Bank. The over 123 years old Nigeria Customs Service (NCS), may soon be taken over by the Federal Inland Revenue Service (FIRS), if the National Assembly yields to the proposal of the Federal Ministry of Finance, Budget and National Planning (FMFBNP). The Federal Ministry of Finance is the supervising Ministry of the Customs Service in Nigeria and the Minister of Finance is the Chairman Board of the Customs as currently enshrined in the Customs and Excise Management Act (CEMA).

The latest happenings in the Nigeria’s finance Ministry is that the Ministry has proposed so many damming and withering proposals against it’s own agency in order to reduced the Customs to a toothless bulldog in retaliation to the Service’s autonomous seeking status.

At a Public Hearing organized by the House of Representatives Committee on Customs and Excise to repealed ( amend ) the Customs Excise and Management Act (CEMA), which according to the lawmakers has not been reviewed in the over 123 years of the Nigeria Customs Service (NCS), held recently at the National Assembly complex, the FMFBNP made it’s proposal known, which has again attracted the attention of the Nigerian populace. Aside, from the Ministry, Freight Forwarders, NACCIMA, and other stakeholders also made presentations and submissions which is now shaking the foundation of the NCS.

The House Committee has called for memoranda from stakeholders, mostly the NCS, Federal Ministry of Finance, ANLCA, NAGAFF, etc on how to amend the over 123 years old CEMA.

The Committee agenda according it’s Chairman for the public hearing
was to reform the Service and repositioned it for greater productivity through adequate funding, proper recruitment, training among others.

Like a house fighting itself, the Federal Ministry of Finance, Budget and National Planning ( FMFBNP) in its presentation to both the Senate and House Committee on Customs and Excise has disowned some of the powers and autonomy being seek by the Nigeria Customs Service in the 2021 Bill.

In its superiority protest to wittingly name and shame the ambitious moves by the NCS for independent from the FMFBNP as it’s supervising ministry as presented in the 2021 Bill seeking to provide for reforms of the administration and Management of Customs and Excise in Nigeria, the establishment of the NCS and repeal of the Customs and Excise Management Act CAP C45 of 2004 as amended and other Customs and Excise legislation.

The Finance Ministry said is in support of the modernization of the legal framework for the administration and Management of the Customs to complement ongoing reforms initiated by the ministry, but that a preliminary review of the Bill reveals the following, which the FMFBNP has kicked against.

AUTONOMY FOR CUSTOMS
In its four pages presentation, the Finance Ministry kicks against autonomy for the NCS in taking decisions without the Ministry, it’s posited ” The bill as presented seeks to create an autonomous customs regulatory body which is separate from the supervision of the FMFBNP. This is not in line with International best practices as Customs Administration in most developed democracies and indeed our developing nation is under the supervision of the Treasury or the Ministry responsible for finance or Economic Management”.

The Ministry cited examples of Countries like United Kingdom, New Zealand, Argentina, Spain, Peru, Ghana, Uganda among others. Saying specifically, that in the United States of America, the Customs and Internal Revenue Services had traditionally been part of the Treasury Department, reporting to the Secretary of the Treasury untill the terrorist attacks against the USA on September 11, 2001 that led to the fundamental repositioning of the Customs Service under the Department of Homeland Security.

The Ministry further posited that ” The contemplation of autonomous Customs Service is in abeyance with extant laws regarding the Treasury, supervision of the Treasury and all agencies which remit funds to the Federation Account and the Consolidated Revenue Fund. In line with the Finance ( Management and Control) Act , FMFBNP is relevant authority charged with the responsibility of ensuring Compliance with the Customs and Excise legislations regarding trade and fiscal policies and, where appropriate , apply other relevant provisions applicable to goods subject to such measures”.

COMPOSITION OF CUSTOMS BOARD
The FMFBNP also kicked against the proposed composition of the Nigeria Customs Service Board , rejecting their nominees in the new bill. According to them “the composition of the Board as proposed by the Bill is unwieldy with the inclusion of the Chairman, thirteen other members and the DCGs . Ministries like Aviation , Interior , Transportation and Foreign Affairs need not be represented on the Board. Also, the intention to replace the Minister of Finance as the Chairman of the Board with an appointee of Mr. President , subject to confirmation by the National Assembly , will limit the supervisory authority of the Federal Government. This is not in alignment with Section 80 of the Constitution of the Federal Republic of Nigeria which creates the Consolidated Revenue Fund and the provisions of Section 4 of the Finance (Management and Control) Act (2004) Laws of the Federation of Nigeria which states as follows ( —- the Minister shall so supervise the expenditure and finances of the Federation as to ensure that a full account is made — and it’s financial control is maintained —-).

On the mandate to collate and publish accurate trade statistics and facilitation of agreements on behalf of the Federal Government by the NCS as proposed by the Bill. Again the Ministry has this to say.

” The NCS does not have the mandate to collate and publish accurate trade statistics or enter into trade facilitation agreements on behalf of the Federal Government without the the approval of the Minister and the Federal Executive Council as the Bill is proposing . FMFBNP and the Ministry of Industry, Trade and Investments are the MDAs charged with this mandate and it is not within the purview of the NCS to intend to enter into International Trade Facilitations and Agreements even as it relates to Customs Administration without the consultation and approval of FMFBNP as directed by the extant Laws of the Federation of Nigeria.”

ON BORDERS ENFORCEMENT BY CUSTOMS
Again, the Ministry denied Customs of such roles as proposed by the Bill, as according to them, it is under the purview of the Nigerian Immigration Service (NIS), it posited.
” The Bill seeks to authorize NCS in border enforcement and regulatory activities, this is an infringement on the mandate of the Nigerian Immigration Service (NIS) by virtue of the provisions of the Immigration Act (2004) Laws of the Federation of Nigeria, which empowers the NIS to act to protect Nigeria’s borders . NCS has the mandate to establish Customs Offices at the borders , but the protection of the Nation’s borders is strictly within the purview of NIS and not the NCS as stated in this Bill”.

NCS REGULATIONS ON MANUFACTURE OF BEER, TOBACCO ETC.
The FMFBNP termed this an ” infringement on the provisions of the Nigeria Factories Act” which places the mandate to oversee the manufacturing of certain products in the purview of the Minister of Industries, Trade and Investments and the Minister of Labour.

In conclusion, the ministry submitted ” in the context of major reforms of Customs Administration , including legislative changes , the degree of Administrative autonomy required to support the reform needs to be considered. Increased autonomy does not automatically solve the problems of weak Customs Administration and may lead to new problems , if the newly autonomous Administration is not properly supervised and made accountable to prevent leakages and abuse of power.

“Accordingly, since the activities of the NCS are directly related to fiscal and trade policies of the nation, they should be subject to the direct supervision of the FMFBNP in line with the provisions of the Finance (Management and Control) Act and International best practices”.

From the look of things, its clear that the NCS and it’s supervising ministry, the FMFBNP are on different pages and probably on a war path of conflict of interest and superiority war on how the Nigerian Customs Service should be repositioned for greater Service to the people.

Though this long time ambition of the Ministry to reduced the Customs powers in terms of revenue collection functions is not new. Recalled in the President Olusegun Obasanjo’s regime under the Finance Minister, Dr NKOZI Okonjo- Iweala, the same plot was initiated and infact a contract was signed with one “Crown Agent” by the FMF as the revenue collector for the Federal government instead of the NCS. That decision had sparked -off anger in the land and with high power lobbying, the idea was buried and the contract teminated. That was as far back as the years’ 2000/2003.

More than 20 years later, the same FMF has thrown up another ” disarious distraction”, with the same agenda, but different model, this time to give the Customs revenue functions to FIRS and also strifing the NCS of it’s needed autonomy without considering technical issues like Rules of Origin, HS codes, goods classifications and defence, Valuation technicalities, revenue calculation procedures and technicalities among others which are core functions of the Customs.

Suffice to say that it is a shame for Nigeria with one of the oldest Customs Service in Africa not to know what to do with it’s Customs in this twenty- first century world order were most Countries who are members of the World Customs Organisation (WCO) and World Trade Organisation (WTO) are repositioning their Customs for greater services to their economies.

The FMFBNP has been a total disappointment in its supervisory roles of the NCS, especially in recent years. How and what type of Customs is the ministry / minister proposing for Nigerians in the new CEMA, ? When will Nigerians have a reform Customs that gears towards economic growth and development, instead of twisting policies on revenue collection that has worsened the Nigerian economy in recent years?.

( In our part 2, we will focused on Why Freight Forwarders, MAN, NACCIMA etc are against Customs ).