In recent months, Customs commands at the ports have raked in staggering amount of revenue. In this report, TOLA ADENUBI looks at why Customs revenue at the nation’s busiest ports is growing despite dwindling import volume. Excerpts
In recent months, Customs Commands located at Nigerian ports have posted staggering revenue profile, dwarfing what they collected in the previous year of 2023. This huge revenue generated at the ports are coming when the nation’s ports are experiencing dwindling volume of importation due to prevailing harsh economic conditions which has forced down the purchasing power of many importers and exporters.
In its 2024 Half Year revenue generation report, the nation’s premier port command, Apapa Customs Command generated N1.023trillion, which is almost close to the N1.172trillion that the Command generated for the entire stretch of 2023.
Addressing the media, the Customs Area Controller of Apapa Port Command, Comptroller Babatunde Olomu revealed that the Command raked in N1,023,663,842,255.63 between January and June 2024, reflecting an increase of 143 percent when compared to the N421,382,166,378.46 collected in the corresponding period of 2023.
According to Controller Olomu, “It’s my delight to address you on the activities of Apapa Area Command for the first half of year 2024 (Jan-Jun).
“Since assuming office on May 6, 2024, the thrust of my leadership has been robust intelligence gathering for enhanced revenue collection backed with deliberately Improved customs-community relations.
“For the first half of 2024, that is between January and June, the command generated a total of N1,023,663,842,255.63. This shows an increase of 143% above the figures of N421,382,166,378.46 collected in the corresponding period in 2023.
“Whereas this collection is coming despite a sharp reduction in the volume of trade, It is necessary to note that extra measures have been put in place to prevent losses of government revenue.
“Upon taking over as Area Controller of Apapa, I set up a revenue recovery committee comprising of seasoned and dedicated officers with a mandate to carry out more detailed look into areas of leakages, especially in bonded terminals under Apapa Command.
“In the area of trade facilitation, we are applying a blend of intelligence with community relations for better awareness of our operating environment to achieve greater trade facilitation and fight criminality.
“I have a team of dedicated officers charged with the responsibility of addressing all complaints or disputes within record time before escalation to my office for prompt action.”
Just like Apapa Customs Command half year revenue which more than doubled, Nigeria’s second busiest port, Tin-Can Island Port also experienced a surge in its revenue figures.
In its Half Year report for 2024, Customs Area Controller for Tin-Can Port, Dera Nnadi revealed that the Tin Can Island Port Command (TCIPC) generated N575.5billion in revenue during the first half of the year.
According to Nnadi, this marks an increase of N315.24billion, representing a 121.13 per cent rise from the N260.26 billion generated in the same period in 2023.
Checks by the Nigerian Tribune further revealed that the Tin-Can Customs Command for the entire 2023 calendar year, generated N716bn into the coffers of the Federal Government.
The Command looks set at shattering that feat having already collected N575.5bn between January to June of 2024.
WHY THE REVENUE SURGE?
Checks by the Nigerian Tribune revealed that importation into Nigerian ports has gone down drastically with vehicles importation volume dropping by 55 percent, container traffic falling to 30 percent and bulk cargo importation into the ports falling to 20 percent in the last one month.
However, while cargo volume dwindled, Customs Duty kept soaring as a result of high and fluctuating exchange rates regime by the Central Bank of Nigeria (CBN) while Customs intensified efforts at blocking revenue leakages at the bonded terminals.
UNSTABLE EXCHANGE RATE
A major reason behind the staggering revenue profile of many seaport commands of the Nigeria Customs Service is the unstable exchange rate regime of the CBN.
The exchange rate utilised by Customs in the clearance of goods via the Nigeria Integrated Customs Information System (NICIS) is based on the rate determined by the CBN. In the first quarter of 2024, a total of 28 exchange rates were directed by the CBN, ranging from N951.94/$1 in January to a peak of N1,662.35/$1 in February 2024.
While a singular exchange rate of N951.94/$1 was maintained in January, February witnessed 15 different spot rates ranging from N951.94/$1 to N1,662.35/$1. March saw 13 different spot rates applied, ranging from N1,303.84 to N1,630,16. These fluctuations resulted in an average applied exchange rate of N1,314.03/$1 in the clearance of Customs goods during the quarter.
So, with a soaring exchange rate regime being applied on Customs duty, importers paid more in terms of Customs duty to clear their cargoes at the ports, leading to higher revenue collection for Customs.
REVENUE BLOCKADE
Another area though which Customs revenue shot up at the ports is through the blockage of revenue leakages particularly at Bonded terminals. Speaking with the Nigerian Tribune, a source in Customs revealed that the Service recently found out that some bonded terminals were being used to divert cargoes that had left the mother port to private destinations, thus leading to revenue losses for the Service.
According to the source, “The intention of the board of Customs to approve bonded warehouses is for ease of doing business and to decongest the ports.
“The procedure of transiting goods from the Seaport to the bonded terminal is complete after the Customs Area Controller has signed the transire and the containers are escorted by the Customs Police or FOU operatives to the bonded terminals.
“Goods meant for the bonded terminals must be properly deposited at the bonded terminal. The goods can only be delivered to the owner after assessment, payment of duty, examination and release out of Customs control.
“In line with this core mandate of ensuring strict compliance with the provisions of the law, any attempt to use the current import and export guidelines by bonded terminals as an avenue for smuggling or duty evasion will continue to be discouraged and frustrated in all ramifications.
“Measures have been put in place to track and trace bonded terminals bound importations to minimise revenue loss. Any operator found culpable will be severely sanctioned.”
With many bonded terminals now under increased watch by the Customs, the increased revenue profile of cargoes leaving the ports for these bonded warehouses has also contributed to the soaring revenue profile of the NCS at the ports.
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