REVEALED: How corruption, ignorance, recession shrank revenue from Customs On November 19, 201612:28 amIn NewsComments BY IFEYINWA OBI THE activities of the Nigeria Customs Service, NCS, in the light of its revenue-generating capacity were recently questioned by the Minister of Finance, Mrs. Kemi Adeosun, who lamented that the twin issues of systemic corruption and outsider-status of its Comptroller-General, Col Hameed Ali,retd, were negatively affecting the ability of the service to perform. Customs CG, Hameed Ali Customs CG, Hameed Ali Adeosun’s remarks were not in isolation, as this special report by Saturday Vanguard, provides exclusive insight into how the current workings of the NCS had become a source of concern. In August 2015, when President Muhammadu Buhari announced the appointment of Col. Hameed Ali , retd, as the Comptroller –General, CG, of Nigeria Customs Service,NCS, opinions were divided over the propriety of the appointment. Disturbed by the development most stakeholders unanimously maintained that having a non-career person as the head of the NCS would largely not augur well for the country. They particularly contended that the new CG irrespective of his record in the Army was likely to underperform. This grouse was informed by the belief that the activities of the NCS were technical in nature and as such, required a career officer as the CG. The stakeholders had argued that officers in the service may likely take advantage of the CG’s ignorance of the workings of NCS. Notwithstanding, there were a few, who contended that Ali was known for strict moral rectitude, a development that was expected to bring discipline and sanity to the service. Three-point mandate However, the Customs boss downplayed such doubts that had trailed his appointment at different fora. For instance, in his maiden address to the top officers of NCS in September 2015, Ali said he had a mandate which comprised of reforms, restructuring, and increase in revenue generation. ‘’Mr. President gave me a mandate. The mandate he has given me are three basic things: go to Customs, reform Customs, restructure Customs and increase the revenue generation. I don’t think that is cumbersome. It is precise and I believe that is what all of you are here to do”, Ali stated. One year after, findings by Saturday Vanguard revealed the existence of ambivalent feelings in the maritime sector over the performance of the NCS. Many , who spoke to Saturday Vanguard based their assessment on the three-point mandate of the NCS boss. They specifically pointed at what was described as the outsider-status of the CG as the chief reason for the inactivity in the NCS. However, these respondents were not in isolation as the Minister of Finance, Mrs. Kemi Adeosun, last month, made the same troubling observation about the service. She described Customs Officers, who the CG had the mandate to reform as ‘’cohesive crooks,’’ and ‘’hard to break.” Adeosun, who has supervisory powers over the Customs expatiated thus: ‘’On the issue of Customs, we are actually working very closely with them, they have some challenges. The general contraption in the economy has really affected their level of inputs, forex scarcity and so on. Leakages in revenue generation “Also, they have some leakages which we are working with them to block. Largely, all their scanners are not working except the one in Idiroko. We have no working scanner in Nigeria, just one is working for the whole country which means a lot of manual discretion in the assessment of Customs and of course, that brings in a lot of leakages. Colonel Hameed Ali is trying his best to instil discipline but being an outsider in an insider’s place, is a difficult job.’’ Indeed, it was this disturbing situation that made the Senate Committee on Customs, Excise and Tariff to institute a probe into the activities of the service with a view to blocking the leakag es in revenue generation. A freight forwarder, who pleaded anonymity, did not agree less on the prevalence of corrupt practices in this dispensation in the Customs. He said: ‘’We are not saying there is no corruption in the Customs, as a matter of fact,corruption in the Customs is as old as the service. Under the present leadership of Customs, corruption has taken a human form and it is walking on two legs. It has never been this bad. The officers took advantage of the ignorance of the CG on some of the technicalities of the operations of the service to become more daring in their extortion and exploitation of importers and their agents.’’ “He is an outsider. The more he looks, the less he sees”, another freight forwarder interjected during this chat at Tin Can Island Port in Lagos. Officers have become more daring On his part, the National President of the Association of Nigerian Licensed Customs Agents,ANLCA, Prince Olayiwola Shittu said the mixed feelings trailing the activities of the NCS were informed by the kind of leadership it has. Shittu said: ‘’When Col. Hameed Ali ,retd, first came in as the Comptroller- General of Customs, there was something akin to a celebration that sanity had finally arrived. What is the situation at present? Some of us were sceptical from the beginning because Ali was never in the system. It would have take an average of three good years for a non-Customs officer of a particular rank, to understand the rudiments of what is going on in the ports. ‘’So, what do you expect from Ali, a retired soldier and at his age, to start learning what classification is all about? It is by practical experience. What Ali was supposed to be, is a symbol representing what we knew the President for. ” Another Lagos-based Customs broker, who also pleaded anonymity, said: ‘’Ali is far from reforming the Customs. The officers are far from being reformed.’’ 41-item import prohibition list Further checks, however, showed that the perceived questionable practices in the NCS were not solely responsible for the dwindling revenue generation profile. In fact, it was learnt that the introduction of the 41-item import prohibition list also affected the revenue generation strength of the NCS. A Customs Liaison Agent, who spoke in that regard on condition of anonymity argued that the alleged corruption was not the reason for the shaky revenue generating strength. The Apapa Port-based agent, who said corruption was not new to the system, added that the removal of several items from importation list resulted in the importation of fewer goods. ‘’I will not agree that the revenue generating status is low, check the records of previous years and reconcile the fact that 41 items were banned from importation. It would have been a different situation if those items were not banned because the country generated much revenue from the import duties paid on such items,’’ he noted. N1 trillion target for 2016 Instructively, as of June 2016, the Customs was able to rake in the sum of N385.7billion, representing a poor result considering its N1 trillion target for 2016. Given the present circumstances, the reaslisation of such projection before the year ends, may not be possible. This budding failure at actualising its annual revenue target, an Onne-based Customs Licensed Agent told Saturday Vanguard, was reversing the gains recorded in the immediate past administration. The agent, who still pleaded anonymity as a result of any likely backlash from the NCS leadership, said prior to the emergence of Ali as the CG, his predecessor, Alhaji Abdullahi Dikko, carved a niche for Customs as one of the high revenue-generating agencies. Dikko had met a monthly revenue profile of N30 billion in 2009 when he became the CG, but left it at N100 billion monthly when he retired in 2015. Revenue statistics Accordingly, the revenue statistics sighted by Saturday Vanguard stated that from 2011-2015, the service made impressive revenue generation. In 2011, the Customs raked in N741 billion, while it generated N850 billion in 2012. The sum of N833 billion was generated in 2013, just as N977billion was realised in 2015. The substantial amount of the 2015 revenue was said to have been collected before Ali became the CG in August of the same year. However, the total amount generated in the concluding part of 2015 was gathered to have been below the N954 billion target of 2015. Policies of the Federal Government When Vanguard sought the opinion of maritime experts on the believed inefficiency in the NCS, they were quick to point at some policies of the Federal Government and the present leadership of the service. They pointed at the scrapping of the Fast Track Scheme and issuance of Debit Notes,DN, which have now been substituted with outright seizures of goods. These policies, they noted, deprive the federal government of revenue. They also observed that Pre-Arrival Assessment Report,PAAR, a scheme designed to encourage self-assessment that would fast track the process of goods’ clearance which the present Customs management inherited, had been bastardised For instance, at a recent stakeholders’ meeting in Apapa, Customs Brokers lamented that PAAR was no longer used for assessment system. They also complained of indiscriminate and incessant alert system, which they said officers not only use to delay clearance process but to extort importers and their agents. Speaking on that, an Apapa-based importer, Chief Fredrik Majure, said: “These anti-trade policies have driven away genuine importers who now divert their cargo to the neighbouring ports from where goods are smuggled into the country. The anti- trade policies of the present Customs management have helped shrink the revenue profile of the service.’’ Apart from these identified low points in the activities of the NCS, Saturday Vanguard learnt that the restructuring being carried out by the current leadership had elicited kudos from critical stakeholders. Ali had upon the assumption of office, retired officers of the rank of Deputy Comptroller- General and Assistant Comptroller- General. He thereafter sacked more officers, including those found to be on drugs and indisciplined. Before this time, some officers were also elevated to fill the vacant positions left by the sacked officers. Rvenue-generating agencies That the federal government recently accused revenue-generating agencies of financial misconduct corroborates the findings about the NCS. The government had a few days ago, accused revenue-generating agencies of financial misconduct by paying bloated salaries and controversial allowances above Revenue Mobilisation and Fiscal Allocation Committee ,RMFAC, specifications. It specifically accused them of realising as much as N1.5 trillion and spending almost 90 percent on recurrent expenditure. The federal government frowned at the practise which it said had been going on for a decade and warned that financial abuses, where agencies hide generated revenue which ought to be paid to the Federation Account, would be exposed. The matter was discussed at the National Economic Council ,NEC, meeting presided over by Vice-President, Yemi Osinbajo at the State House, Abuja. Notwithstanding, the Public Relations Officer of the NCS ,Mr. Wale Adeniyi, a Deputy Comptroller of Customs, told Saturday Vanguard that the drop in revenue was as a result of the current recession, noting that it had nothing to do with the capacity of the service. ‘’Access to foreign exchange and the drastic fall in the value of the naira have also affected the revenue generation. The removal of 41 items from the CBN foreign exchange window affected the revenue generation by the service.’’ Read more at: http://www.vanguardngr.com/2016/11/revealed-how-corruption-ignorance-recession-shrank-revenue-from-customs/

REVEALED: How corruption, ignorance, recession shrank revenue from Customs On November 19, 201612:28 amIn NewsComments BY IFEYINWA OBI THE activities of the Nigeria Customs Service, NCS, in the light of its revenue-generating capacity were recently questioned by the Minister of Finance, Mrs. Kemi Adeosun, who lamented that the twin issues of systemic corruption and outsider-status of its Comptroller-General, Col Hameed Ali,retd, were negatively affecting the ability of the service to perform. Customs CG, Hameed Ali Customs CG, Hameed Ali Adeosun’s remarks were not in isolation, as this special report by Saturday Vanguard, provides exclusive insight into how the current workings of the NCS had become a source of concern. In August 2015, when President Muhammadu Buhari announced the appointment of Col. Hameed Ali , retd, as the Comptroller –General, CG, of Nigeria Customs Service,NCS, opinions were divided over the propriety of the appointment. Disturbed by the development most stakeholders unanimously maintained that having a non-career person as the head of the NCS would largely not augur well for the country. They particularly contended that the new CG irrespective of his record in the Army was likely to underperform. This grouse was informed by the belief that the activities of the NCS were technical in nature and as such, required a career officer as the CG. The stakeholders had argued that officers in the service may likely take advantage of the CG’s ignorance of the workings of NCS. Notwithstanding, there were a few, who contended that Ali was known for strict moral rectitude, a development that was expected to bring discipline and sanity to the service. Three-point mandate However, the Customs boss downplayed such doubts that had trailed his appointment at different fora. For instance, in his maiden address to the top officers of NCS in September 2015, Ali said he had a mandate which comprised of reforms, restructuring, and increase in revenue generation. ‘’Mr. President gave me a mandate. The mandate he has given me are three basic things: go to Customs, reform Customs, restructure Customs and increase the revenue generation. I don’t think that is cumbersome. It is precise and I believe that is what all of you are here to do”, Ali stated. One year after, findings by Saturday Vanguard revealed the existence of ambivalent feelings in the maritime sector over the performance of the NCS. Many , who spoke to Saturday Vanguard based their assessment on the three-point mandate of the NCS boss. They specifically pointed at what was described as the outsider-status of the CG as the chief reason for the inactivity in the NCS. However, these respondents were not in isolation as the Minister of Finance, Mrs. Kemi Adeosun, last month, made the same troubling observation about the service. She described Customs Officers, who the CG had the mandate to reform as ‘’cohesive crooks,’’ and ‘’hard to break.” Adeosun, who has supervisory powers over the Customs expatiated thus: ‘’On the issue of Customs, we are actually working very closely with them, they have some challenges. The general contraption in the economy has really affected their level of inputs, forex scarcity and so on. Leakages in revenue generation “Also, they have some leakages which we are working with them to block. Largely, all their scanners are not working except the one in Idiroko. We have no working scanner in Nigeria, just one is working for the whole country which means a lot of manual discretion in the assessment of Customs and of course, that brings in a lot of leakages. Colonel Hameed Ali is trying his best to instil discipline but being an outsider in an insider’s place, is a difficult job.’’ Indeed, it was this disturbing situation that made the Senate Committee on Customs, Excise and Tariff to institute a probe into the activities of the service with a view to blocking the leakag es in revenue generation. A freight forwarder, who pleaded anonymity, did not agree less on the prevalence of corrupt practices in this dispensation in the Customs. He said: ‘’We are not saying there is no corruption in the Customs, as a matter of fact,corruption in the Customs is as old as the service. Under the present leadership of Customs, corruption has taken a human form and it is walking on two legs. It has never been this bad. The officers took advantage of the ignorance of the CG on some of the technicalities of the operations of the service to become more daring in their extortion and exploitation of importers and their agents.’’ “He is an outsider. The more he looks, the less he sees”, another freight forwarder interjected during this chat at Tin Can Island Port in Lagos. Officers have become more daring On his part, the National President of the Association of Nigerian Licensed Customs Agents,ANLCA, Prince Olayiwola Shittu said the mixed feelings trailing the activities of the NCS were informed by the kind of leadership it has. Shittu said: ‘’When Col. Hameed Ali ,retd, first came in as the Comptroller- General of Customs, there was something akin to a celebration that sanity had finally arrived. What is the situation at present? Some of us were sceptical from the beginning because Ali was never in the system. It would have take an average of three good years for a non-Customs officer of a particular rank, to understand the rudiments of what is going on in the ports. ‘’So, what do you expect from Ali, a retired soldier and at his age, to start learning what classification is all about? It is by practical experience. What Ali was supposed to be, is a symbol representing what we knew the President for. ” Another Lagos-based Customs broker, who also pleaded anonymity, said: ‘’Ali is far from reforming the Customs. The officers are far from being reformed.’’ 41-item import prohibition list Further checks, however, showed that the perceived questionable practices in the NCS were not solely responsible for the dwindling revenue generation profile. In fact, it was learnt that the introduction of the 41-item import prohibition list also affected the revenue generation strength of the NCS. A Customs Liaison Agent, who spoke in that regard on condition of anonymity argued that the alleged corruption was not the reason for the shaky revenue generating strength. The Apapa Port-based agent, who said corruption was not new to the system, added that the removal of several items from importation list resulted in the importation of fewer goods. ‘’I will not agree that the revenue generating status is low, check the records of previous years and reconcile the fact that 41 items were banned from importation. It would have been a different situation if those items were not banned because the country generated much revenue from the import duties paid on such items,’’ he noted. N1 trillion target for 2016 Instructively, as of June 2016, the Customs was able to rake in the sum of N385.7billion, representing a poor result considering its N1 trillion target for 2016. Given the present circumstances, the reaslisation of such projection before the year ends, may not be possible. This budding failure at actualising its annual revenue target, an Onne-based Customs Licensed Agent told Saturday Vanguard, was reversing the gains recorded in the immediate past administration. The agent, who still pleaded anonymity as a result of any likely backlash from the NCS leadership, said prior to the emergence of Ali as the CG, his predecessor, Alhaji Abdullahi Dikko, carved a niche for Customs as one of the high revenue-generating agencies. Dikko had met a monthly revenue profile of N30 billion in 2009 when he became the CG, but left it at N100 billion monthly when he retired in 2015. Revenue statistics Accordingly, the revenue statistics sighted by Saturday Vanguard stated that from 2011-2015, the service made impressive revenue generation. In 2011, the Customs raked in N741 billion, while it generated N850 billion in 2012. The sum of N833 billion was generated in 2013, just as N977billion was realised in 2015. The substantial amount of the 2015 revenue was said to have been collected before Ali became the CG in August of the same year. However, the total amount generated in the concluding part of 2015 was gathered to have been below the N954 billion target of 2015. Policies of the Federal Government When Vanguard sought the opinion of maritime experts on the believed inefficiency in the NCS, they were quick to point at some policies of the Federal Government and the present leadership of the service. They pointed at the scrapping of the Fast Track Scheme and issuance of Debit Notes,DN, which have now been substituted with outright seizures of goods. These policies, they noted, deprive the federal government of revenue. They also observed that Pre-Arrival Assessment Report,PAAR, a scheme designed to encourage self-assessment that would fast track the process of goods’ clearance which the present Customs management inherited, had been bastardised For instance, at a recent stakeholders’ meeting in Apapa, Customs Brokers lamented that PAAR was no longer used for assessment system. They also complained of indiscriminate and incessant alert system, which they said officers not only use to delay clearance process but to extort importers and their agents. Speaking on that, an Apapa-based importer, Chief Fredrik Majure, said: “These anti-trade policies have driven away genuine importers who now divert their cargo to the neighbouring ports from where goods are smuggled into the country. The anti- trade policies of the present Customs management have helped shrink the revenue profile of the service.’’ Apart from these identified low points in the activities of the NCS, Saturday Vanguard learnt that the restructuring being carried out by the current leadership had elicited kudos from critical stakeholders. Ali had upon the assumption of office, retired officers of the rank of Deputy Comptroller- General and Assistant Comptroller- General. He thereafter sacked more officers, including those found to be on drugs and indisciplined. Before this time, some officers were also elevated to fill the vacant positions left by the sacked officers. Rvenue-generating agencies That the federal government recently accused revenue-generating agencies of financial misconduct corroborates the findings about the NCS. The government had a few days ago, accused revenue-generating agencies of financial misconduct by paying bloated salaries and controversial allowances above Revenue Mobilisation and Fiscal Allocation Committee ,RMFAC, specifications. It specifically accused them of realising as much as N1.5 trillion and spending almost 90 percent on recurrent expenditure. The federal government frowned at the practise which it said had been going on for a decade and warned that financial abuses, where agencies hide generated revenue which ought to be paid to the Federation Account, would be exposed. The matter was discussed at the National Economic Council ,NEC, meeting presided over by Vice-President, Yemi Osinbajo at the State House, Abuja. Notwithstanding, the Public Relations Officer of the NCS ,Mr. Wale Adeniyi, a Deputy Comptroller of Customs, told Saturday Vanguard that the drop in revenue was as a result of the current recession, noting that it had nothing to do with the capacity of the service. ‘’Access to foreign exchange and the drastic fall in the value of the naira have also affected the revenue generation. The removal of 41 items from the CBN foreign exchange window affected the revenue generation by the service.’’

Read more at: http://www.vanguardngr.com/2016/11/revealed-how-corruption-ignorance-recession-shrank-revenue-from-customs/