Despite approvals, absence of port scanners costs government N800b monthly

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Despite multiple claims and approvals by the Federal Executive Council (FEC) for the purchase of cargo scanners for the nation’s ports, there appears no end to the long-suffering of importers and businesses, as the ports continue to depend on laborious manual inspection.
The action, according to operators, cost the nation over N800 billion monthly and about N9.6 trillion yearly.

Indeed, promises to provide and install new and functional scanners to eliminate the cumbersome processes in cargo clearing, as well as clear high cost associated with manual inspection by the Nigerian Customs Service (NCS) at the nation’s ports, appear to remain what they are, empty promises.

Barely eight months after the Comptroller General of the NCS, Hammed Ali, disclosed that there would be seven functional scanners mounted at strategic entry points within six months, there are no signs of the scanners delivered or installed at the various nation’s entry points (seaports, land borders and airports).
In January this year, the NCS announced that three new scanners have been purchased by the Ministry of Finance and an additional four to be purchased by the Central Bank of Nigeria (CBN) to boost trade facilitation.

The Customs boss had said the deployment of the e-Customs components would see to the deployment of 135 modern scanners to enhance border security and boost national trade facilitation.

On several occasions, the Federal Government, through its agencies, had promised to deploy cargo scanners at the seaports and border stations, up till now, no scanner has been provided or installed.

In February 2017, the Comptroller General had guaranteed that new cargo scanners would be provided at the ports in the first quarter of 2018 to make cargo examination easier, faster, and surer. October that same year, about eight months after, Ali reassured that before a couple of months from then, there would be scanners at the ports.   

The Federal Executive Council (FEC) had approved N8.47 billion for the supply and installation of three mobile cargo scanners in Onne, Port Harcourt and Tin Can Port, Lagos that same year.

FEC further approved two contracts totaling N283.255 billion and a foreign component of $18.12 million for the purchase of boats and scanners for Customs last year, which was awarded to a company, named Messrs Airwave Limited.

Also, at a virtual stakeholder meeting on the Apapa traffic situation, chaired by the Vice President, Prof Yemi Osinbajo, last year, it was disclosed that the Federal Government was set to spend over N688.56 billion on the acquisition of over 300 scanners for the nation’s ports and other critical entry points for digital examination of cargoes and other items imported into the country, which would be facilitated when the National Single Trade Window comes into full swing.

Last week, while appearing before a House of Representatives committee, Ali said the unavailability of scanners at the ports was making it difficult to monitor all the goods imported into the country and that once the scanners are available, smuggling would be reduced to the ‘barest minimum.’

In recent times, there has been a surge in the activities of smugglers who import expired products and illegal arms into the country.

The Comptroller-General was responding to a question on how the activities of smugglers impact the country.

“Looking at the figures — 2018, 2019, 2020 — one gets this wow performance of the service under your leadership. One is a little worried because of the activities of smugglers, which of course impacts negatively on your revenue potential. Given your knowledge of what the activities of smugglers are, what do you think we can do to curb the activities of smuggling?” Saidu Abdullahi, a member of the committee, had asked.

In response, Ali said: “To be frank, apart from vehicle smuggling, most of the smuggling —evasion of duties — happens at the port because we do not have scanners and which means we cannot inspect every container and know the content.

“With due respect to stakeholders, most of our traders in conjunction with the clearing agents always try to devalue the goods that are imported and therefore reducing the percentage. But if we have scanners, that will help us tremendously to be able to reduce to the barest minimum the extent of smuggling because when you have a company bringing 50 containers, you hardly can inspect all those and also, we are mindful of the ease of doing business.”

MOREOVER, there have been blame games over the 22 old scanners procured at the cost of $120 million that are lying fallow since 2006. 

Recently, the House of Representatives Committee on Customs and Excise expressed anger that the 22 cargo scanners purchased by the Federal Government were mishandled after the takeover by the Customs Service in 2013.
As a result of this, the House opposed the bid by the Federal Government to purchase new scanners for the NCS.
Recall that the 22 scanners were bought by the Federal Government and handed over to Cotecna Destination Inspection Limited, Societe Generale De Surveillance, and Global Scan Systems on a build, operate and transfer basis with a seven-year contract.

The Minister of Finance, Zainab Ahmed who was represented by the Director, Home Finance of the Ministry of Finance, Stephen Okon, explained that the lack of spare parts was responsible for the poor state, abandonment, and collapse of the 22 scanners.

But the NCS alleged that most of the scanners bought by the three suspended service providers were obsolete, with the only few functional ones not working well.

Since then, Customs had been planning to import 50 modern scanners that would be deployed at the ports nationwide to ensure success and efficiency in cargo scanning by its officers, under the Pre-Arrival Assessment Report (PAAR).
Despite possessing six seaports, which include Apapa and Tin Can in Lagos, Onne and Port Harcourt ports in Rivers State, Warri Port, and Calabar Port, as well as its land border stations, none can presently boast of functional scanners.

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MORE important, all the collapsed scanners have serious implications for the nation’s security as physical/manual inspection of containers thrives, leading to prolonged cargo delays and excessive payment of rent and demurrage by importers, exporters, and licensed customs agents.
This has also made Nigerian ports less competitive among other ports in West Africa and beyond and as well as caused the country to be ranked poorly in the World Bank Ease of Doing Business index.
According to the World Bank report, Nigeria ranks 131 among 190 economies and 179 out of 191 countries on the ‘trading across borders’ sub-index of the World Bank Ease of Doing Business.
Also, the Lagos Chamber of Commerce and Industry (LCCI), in a report conducted alongside CIPE in 2018, said Nigeria is one of the toughest countries to trade in, as it loses $19 billion yearly – about five per cent of its gross domestic product (GDP), from delays, traffic jams, illegal charges and insecurity at its ports.

The President of, Shippers Association of Lagos, Jonathan Nicol, said Nigeria loses over N800 billion monthly due to lack of 24-hour seaport operation and about N9.6 trillion lost in a year.

According to Nicol, the port is a money-spinning machine, as payments are daily made to shipping companies, terminal operators, customs, transporters, Ministries, Departments, and Agencies (MDAs) in the ports.

“If one is bringing out 1,000 containers, add the customs duty, shipping and terminal charges, transportation, and even under-the-table transactions, then you will understand the amount involved,” he said.   
In May 2017, Vice President Yemi Osinbajo had signed an executive order directing the resumption of 24-hour operations at the Apapa Port, but it is yet to commence by NCS and other government agencies.

While the lack of scanners at the ports is frustrating the government’s ease of doing business orders, some importers are taking advantage of this to make wrong declarations, which poses risk to national security, as dangerous weapons and other contraband goods are smuggled into the country due to lack of digital screening.

A non-governmental organisation, The Transparency Network Group (TANGO), had in June, disclosed that the Federal Government loses about N5 billion in revenue to importers through the wrong declaration.

The Minister of State for Transportation, Gbemisola Saraki, last week, blamed the inefficiency of the NCS for Nigeria’s loss of cargoes and accruable revenue to ports of neighbouring countries. She said the maritime sector if fully harnessed, could single-handedly finance Nigeria’s budget.

Saraki said that while ports of neighbouring countries in West Africa are using scanners, the NCS is still doing a physical examination and manual inspection of cargoes at the ports, a development that has brought delays and other issues that are inimical to trade facilitation.

Chairman of the Nigerian Port Consultative Forum (NPCF), Kunle Folarin, said the burden of the demurrage incurred by importers or consignees due to the lack of scanners at the ports will be passed to the consumer, which will create another level of inflation in the economy.

He said while Customs have settled for 100 per cent physical examination and inspection of cargoes, they would sabotage all efforts at ensuring scanners arrive and are installed at the ports due to the huge money they get illegally.

Manager of Client Services, Inspired Cars, Iwayeye Olatunji, said the Nigerian factor is delaying the use of scanners at the ports to facilitate trade in the country and across borders, as those responsible for the procurement and installation are afraid of losing the illegal money they make from physical examination of cargos once the scanners are functional and in use.

Olatunji said while importers, exporters, clearing agents, and the public are losing from the lack of functional scanners, the government is losing more revenue while Customs officials get richer from under-declaring the actual revenue collected from import duty and taxes.

Also speaking, the Deputy National President, Air Logistics, National Association of Government Approved Freight Forwarders (NAGAFF), Dr Segun Musa, said Nigeria is losing trillions of naira due to lack of functional scanners, while Customs officials are becoming billionaires in no time, as the money they claim to lose to false declaration find its way to their pockets.

He said the NCS is not capable of handling technology required for import and export procedures in the nation’s ports, hence government should deregulate their activities to allow a private entity to manage the processes.
He called for private sector participation in the handling of the scanners, noting that when the scanner contract was managed by the private sector, it was functional until when it was handed over to the NCS. He expressed fear that once the costly scanners arrive, they are likely to be destroyed just like the previous ones.

REACTING, the Public Relations Officer of NCS, Joseph Attah, told The Guardian that three scanners are on board a ship on their way to Nigeria. He assured that the scanners would arrive in late August or early September, but he was uncertain if the scanners are from the Ministry of Finance or the Central Bank of Nigeria (CBN).
However, the Zonal Coordinator, Zone A headquarters of the NCS, Assistant Comptroller of Customs (ACG), Modupe Aremu, said the service would see over 400 scanners deployed to various terminals across the Nigerian ports, through a new electronic scheme, Authorised Economic Operators (AEO), that would aid its operations.

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