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Senate moves to stop Customs concession of N3tn revenue collection

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The Senate Committee on Customs and Excise is set to summon the Comptroller General of the Nigeria Customs Service, Col Hameed Ali (retd.), over the move by the NCS to transfer its tax collection duty to a foreign firm, Sunday PUNCH has learnt.

The Vice Chairman of the committee, Senator Francis Fadahunsi, who disclosed this to a PUNCH’s correspondent on Friday, said the NCS boss was expected to bring all documents relating to the agreement he signed with the foreign firm.

The senator said, “Our committee will write the CG, NCS to demand for the documents with which the agreement was signed. He is expected to bring all the documents relating to the agreement. All of us in the committee did not support the concession idea.

“If the CG, NCS refuses to bring the documents, we will write the Minister of Finance who is the chairman of the board, and a centre point of the deal to bring them. We want to see the agreement. We held a meeting on the issue during the week.

“As soon as we go through the documents and we find out that it is almost the same thing which other administrations had done in the past which is just to find jobs for the ‘boys’, or a special interest for some people to steal our money, we will kick against it.

“There is no amount of money we want to generate in the Customs that the personnel of the Nigerian Customs Service, if properly trained and monitored, cannot generate.

“What is the essence of the seven per cent cost of collection? It is to collect maximum revenue. What the Comptroller General of the NCS should do is to recruit more personnel instead of looking for foreigners to come and spend a false N3.4bn, claiming that they will spend the amount on ICT.

“Meanwhile, the NCS had already awarded a contract of almost N384m early this year on the same scanner that the foreign firm said it would invest money on.”

Foreign firm promises to invest $3.1bn, generate $176bn in 20 years

Investigations by our correspondent recently revealed that the Federal Government had perfected plans to concession the Nigeria Customs Service automation project, also known as the e-customs, to a private firm.

The concessionaires were said to have promised to invest $3.1bn and generate $176bn within the 20-year contract period, estimated at about N3tn per annum.

Findings by our correspondent revealed that the Federal Executive Council had approved the controversial concession contract to Messrs E-Customs HC Project Limited.

It was said to have got the job at the cost of $3.1bn for a period of 20 years under Public Private Partnership arrangement.

However, another firm, Messrs Adani Systems Limited/Webb Fontaine, had faulted the contract award to Messrs E-Customs HC Project Limited.

Adani’s management claimed that it had an existing agreement with the Federal Government to do the same project with nearly the same conditions and insisted that the E-Customs HC wanted to hijack the project.

The development drew the attention of the House of Representatives and it subsequently asked its Joint Committee on Finance and Customs to probe it.

The Joint Committee mandated the parties involved in the controversial contract to maintain status quo ante pending the outcome of the public hearing.

In carrying out their findings, the panels invited the Federal Ministry of Finance, Budget and National Planning, the Attorney General of the Federation and Minister of Justice, the NCS, the Infrastructure Concession and Regulatory Commission and the two contractors.

The panel in its report cited Section 42(1a) of the Procurement Act 2017, the Bureau for Public Procurement on April 11, 2017, which granted certificate of no objection to the CBN recommending Messrs Adani Mega Systems Limited/ Webb Fontaine for the award of the project contract.

It was also discovered by the committee that CBN-TC on the CISS on behalf of the Federal Government engaged and signed contract with Messrs Adani Systems Limited/Webb Fontaine on a Build Operate and Own agreement.

The document indicated that the proposed concession period would last for 20 years on pro- rata sharing of 1 per cent (CISS and NESS) on phase 1 of ($300m) investment.

The committee held that there was a contract agreement entered between the CBB-TC on CISS.

It also held that, although the new consortium presented a letter of engagement from the office of the Chief of Staff to the President and other documents showing the level of work they had done, it was unfortunate that there was no contract agreement with the Federal Government of Nigeria.

Investigations showed that Messrs Adani Systems Limited/ Webb Fontaine had instituted a court case challenging the cancellation of the agreement in December 2018 at the Federal High Court with suit No FHC/ ABJ/CS/2017, demanding $2.5bn as damages.

Based on the suit, the Solicitor General of the Federation wrote the Minister of Finance, urging her to consider the strength and weakness as well as litigation fees.

Meanwhile, the office of the Chief of Staff to the President had issued a letter engaging the consortium to carry out the same project awarded to Messrs Adani Systems Limited/Webb Fontaine seven months after they were engaged by CBN-CISS. The letter, titled, ‘Presidential Initiatives on Customs Modernisation of e-Customs Project,’ was dated September 17, 2019.

The Reps Joint Committee concluded that the Presidency was not duly informed of the existing contract agreement and litigation filed by Messrs Adani Systems Limited/ Webb Fontaine.

It also said there was no evidence before the committee that a contract was signed between the consortium and the Federal Government or CBN- CISS.

The Joint Committee in its recommendations therefore said Messrs Adani Systems Limited/ Webb Fontaine should be allowed to continue with the project so as to avoid unimaginable possible revenue loss to the country.

They also supported a Build-Operate-Transfer delivery method for the project and not Build, Operate and Own.

The report was signed by the chairmen of the House of Reps committees on Finance, Public Petitions and Customs as well as clerks of both committees on Finance and Customs.

Why we are against concession arrangement –Senate committee

But Fadahunsi, in a recent interview, had told our correspondent that the concession plan for the duty collection function would fail because it did not have the blessing of the red chamber and that it ran contrary to the provisions of the Act that established the NCS.

Fadahunsi, a retired deputy comptroller general of the NCS, had said, “As the Vice Chairman of the Senate Committee on Customs and Excise, we are not aware of the concession of the NCS as well as the position taken by the House of Representatives on it. The Senate leadership has not been briefed.

“There were moves in the past to take over the collection of Customs duties by private firms, promoted by people with greedy interest despite the fact that the Act that established the NCS empowers it to collect revenue for the Federal Government; that is why it is enjoying seven per cent cost of collection.

“We don’t need to concession the NCS to any private concern because there are trained customs officers that can collect duties; they have the right environment and modern technology and equipment to do the job more efficiently.

“There was an award of contract early this year for the installation of mobile scanners in Port Harcourt, Tincan and Apapa, Lagos ports. Why should we have such equipment efficient officers and still be thinking of concessioning the NCS?

“I asked the Chairman, House of Representatives Committee on Customs and Excise, who is a retired controller of the NCS and he denied being part of the decision. Members of the committee who don’t know anything about the NCS operations failed to appreciate what our officers can do.

“The other time, the NCS was given a revenue target of N1.6tn and I said giving Customs target is a lazy way of generating revenue because they can collect up to N4tn in a year if they are properly motivated and monitored.

“If the revenue collection of the NCS is transferred to the contractors, they will collect their commission and the Customs will still deduct its seven per cent cost of collection. So, the country would lose.

“The President was not properly briefed that there are adequate and competent hands in Customs that could collect duties. The projection of the private firm is to generate an average of N3tn per year for 20 years whereas officers of the NCS are fully equipped to do more than that.

“The Senate will act appropriately on the proposal whenever it is brought before us. All my colleagues that have spoken with me on the issue have vowed to oppose it, so the arrangement is dead.”

Investigations by our correspondent revealed that past administrations had tried to cede the revenue collection functions of the Nigeria Customs Service to private firms without success since 1999 and foreign firms have been scheming to take over the roles of the second largest revenue generating agency in the country.

Former President Olusegun Obasanjo during his tenure once threatened to scrap the NCS if he had his way.

Shortly after his statement, a foreign firm, Crown Agent, was positioned to take over the revenue collection functions of the Customs in 2001 when Dr Ngozi Okonjo- Iweala was Minister of Finance. The idea was however killed through stakeholders’ intervention.

We’re not aware of any invitation by Senate – Customs

When contacted, the spokesperson for the NCS, Joseph Attah, told one of our correspondents that he was not aware of any invitation by the lawmakers.

He stated, “I’m not aware of any summons or invitation by the Senate or about what you just asked me.”

When asked if the Customs boss would honour the invitation when told about the development, Attah insisted that he would not comment on the matter.

“I said I don’t know of any invitation whatsoever and how am I to comment on what I don’t know about; I’m not aware of what you are talking about,” Attah added.

Customs personnel could do better with adequate training, equipment – Economist

An economist, Prof Sherifdeen Tella, told one of our correspondents that the idea of concessioning collection of customs duties and other levies to a foreign firm was not the best way to go since there are personnel in the NCS who are being paid to do the job.

He said, “Even if the NCS is regarded as underperforming, it does not mean that we have to give their work out to any foreign firm. Such an idea does not augur well for this country. At 60, we are still looking outside for services that we have competent people who could provide in the country.

“We have competent Nigerians who should be able to do the job. There is nothing wrong with concessioning if it is within Nigeria and among Nigerians. We have some experts here who can do it better. Giving the job to a foreign firm is not proper except we have an international aspect of it outside the Nigerian shores and the foreign firm could handle that but if it is within the Nigerian borders, I don’t think that is right.

“Also, it is not as if we are going to disband the NCS, we will still be paying people for not rendering services. It is not right to concession customs duties to any foreign firm. I think someone wants to gain something from that.”

He said the NCS should take advantage of technology to enhance its effectiveness.

Planned concession embarrassing – CACOL, SERAP

The Executive Director, Socio-Economic Rights and Accountability Project, Adetokunbo Mumuni, said no serious-minded government establishment would think of concession any of its units to a foreign organisation. He said it could pose a danger to the territorial integrity of the country and that doing such could merely fall short of concession the running of the country to a foreigner.

He added, “If we could concession collection of duties to a foreign establishment, then the Nigerian government should concession the administration of Nigeria to another foreign body; that is what it means.

“To say you want to concession the collection of your duty, which is your statutory responsibility, to a foreign establishment is a manifestation of unseriousness. It should never be thought of in the current Nigerian enterprise, otherwise the Nigerian government could as well concession the administration of Nigeria to a foreign establishment or a foreign country.”

Also, the Executive Chairman, Centre for Anti-Corruption and Open Leadership, Mr Debo Adeniran, described the move as embarrassing to the country and its people, adding that such would not be acceptable.

He added, “I feel highly embarrassed and it’s embarrassing to the image of Nigeria and to an average educated Nigerian because even the civil servants that are supposed to have been gainfully employed do not have enough job to do and we have enough technocrats that can deal with the collection of duties.

“I don’t believe there is any reason why such a task would be concessioned to a private firm on behalf of the government. If there is any technical expertise that is lacking, there should be capacity building for the customs personnel to be able to carry out their assignment effectively and efficiently.

“More embarrassing is that they are concessioning it to a foreign firm and that is not acceptable. In foreign countries, Nigerians are revered in terms of expertise and technical capacity to carry out any task in any field, so we have what it takes. I hope it’s not the belief that ‘anything foreign is better’ is what is at work here. That move is out of place.”

-Sunday PUNCH

Business

Nigeria’s oil revenue not enough to cover petrol import costs – Finance minister

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Nigeria’s revenue being generated from its low oil production cannot cover the cost of imported petrol, Minister of Finance, Budget and National Planning, Zainab Ahmed, has said.

She stated this on Thursday in an interview with Reuters on the sideline of the World Economic Forum (WEF) in Davos.

She said the Federal Government hopes that oil production will average 1.6 million barrels per day (bpd) this year.

In the first quarter of 2022, Nigeria’s oil production averaged 1.5 million bpd.

The minister said, “We are not seeing the revenues that we had planned for. When the production is low it means we’re … barely able to cover the volumes that are required for the (petrol) that we need to import.”

This year, the FG had budgeted 1.8 million bpd of production, but frequent crude theft and attacks on pipelines continue to affect the nation’s wealth.

In April, it asked the national assembly to drop the projected production volume to 1.60 million barrels per day.

Despite higher oil prices due to the Russia-Ukraine war, under-recovery costs, also known as petrol subsidy, continue to erode gains.

Nigeria has spent about N1 trillion on petrol import shortfall in the last four months and will spend up to N4 trillion this year. This has also dwindled the federation revenue — just as the Nigerian National Petroleum Company (NNPC) Limited has been unable to remit any amount to the government purse this year.

On the recent hike of the monetary policy rate by the Central Bank of Nigeria (CBN), the minister said the move was necessary due to policy adjustments by the US Federal Reserve and central banks in Europe.

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Aviation

No plane crashed in Lagos – FAAN, NEMA

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Two government agencies, the Federal Airports Authority of Nigeria and National Emergency Management Agency, have dismissed reports of a fresh plane crash in the Ikeja area of Lagos.

An internet user who saw a plane being towed away had sent the picture to the social media, concluding that it was the wreckage of a fresh plane crash in Lagos.

The aircraft, which had missing wings, was spotted on Ikeja-Agege road, causing gridlock along the route on Tuesday as the news went viral on the social media.

But FAAN in a terse statement posted on its social media handles, said Nigerians should disregard the news.

It stated, “The Federal Airports Authority of Nigeria would like to inform the general public to disregard the news making the rounds on social media about an alleged crash at Ikeja Airport.

“The aircraft was sold by the owner to a buyer, who was taking it to its final destination.”

Also, Ibrahim Farinloye, the zonal coordinator, South-West, NEMA, said after due consultations with all critical stakeholders and tracking of all incoming and outgoing flights in Lagos, there was no plane.

An aviation analyst, Daniel Dikio, had also tweeted his observation of the viral video.

“It is an Airbus A319, hasn’t flown domestically in years. I can see traces of a green logo; it likely belonged to First Nation Airways in its time.

“The wings are separated cleanly; this wouldn’t happen in a crash. The separation is a sign of dismantling.

“There is no damage to the fuselage, almost impossible given the purported circumstances”, Dikio noted.

 

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Business

FG targets 1.4mbpd domestic refining before 2027

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Minister of State for Petroleum Resources, Chief Timipre Sylva

The Federal Government has disclosed plans to actualise 1.4 million barrels per day, mbpd, domestic refining of crude oil in the next five years.

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