Customs revenue plunges as the coronavirus pandemic threatens the revenue target of two trillion for 2020

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By Richards Adeniyi

THE world is on virtual lockdown as the coronavirus pandemic threatens mankind with extinction unless either a cure or a vaccine can be found pretty soon. It’s a race against time. It is however, difficult to discuss the pandemic at any length without mentioning China. And that is not just because the virus originated in Wuhan, China before spreading across the world. I am sponspicious like a lot of people but I don’t have hard facts to determine whether the pandemic is natural phenomenon or part of a sub-plot of a grand geopolitical design.

Following the first confirmed case of COVID-19 also known as Coronavirus in Lagos State in February 2020, after an Italian arrived the country with the dreaded virus, efforts had been on top gear towards containing the virus from spreading across the country.

Sensing danger of the first index case regarding the subsequent confirmed cases in other parts of the country, state governments put up measures towards ensuring that the citizenry were protected from the deadly virus.

Today, the lockdown imposed by the Federal Government on Lagos State to curb the spread of coronavirus pandemic has taken a toll on Nigeria Customs Service (NCS) revenue collection as earnings dropped by 50 per cent in few weeks into the new year.

The Nigeria Customs Service has over the years been imposing target on what they should collect every year at the commencement of a new year. Executive Secretary CEO of Shippers Council, Barrister Hassan Bello has criticized the Nigerian Customs Service for placing too much emphasis on revenue generation as against trade facilitation.

Speaking at a stakeholders’ forum organized by the NSC, Bello said “The essence of Customs is revenue and trade facilitation. This must however, be balanced hence we don’t want the Customs to dwell too much on revenue generation only.

Expatiating further, he said: “When I see in the newspaper that Apapa Customs Command collect N12bn, this collects so so billions, I said it is wrong because when the Customs introduced good trade facilitation mechanism, it will rake in three times what they are getting now.

Emphasis should not be on revenue, it should be on trade facilitation and I think we are discussing with Customs on that”

Bello also solicited the support of stakeholders to enable the NSC discharge its duties. He said the mandate of the council was to provide level playing field for everyone including terminal operators who he said would also be protected.

“In our capacity as the port economic regulator, our role is to consult, coordinate, moderate and harmonise the various processes and procedures with a view to achieving operational efficiency at our ports.

“On terminal operators, the protection of their investment from undue interference leading to guarantee of investment and return of investment is part of our jobs.

“At times we have to ensure that we increase profitability of the terminal operators corresponding with the investment they have agreed to make, there must be openness and good atmosphere for investment,” he said.

Today, with the “birth” of the Coronavirus, the Federal Government have been urged to suspend the target given to the Nigeria Customs Service which has led to a decline in volume of import from China, Hong Kong and other Asian countries which have been badly hit by the coronavirus with over 10,406 dead cases recorded since the outbreak of the disease and 253,797 confirmed cases in 182 countries and territories since the outbreak of the disease.

Recall that the government had given customs a revenue target of N1.5 trillion for the year 2020 but the Comptroller General of Customs, Hameed Ali raised it up to N2 trillion.

Speaking in a chat with the National Daily correspondent recently, National President, National Council of Managing Directors of Licensed Customs Agents, Lucky Amiwero noted that over 50 per cent of Nigeria’s import come from China, but many importers no longer travel To China to buy goods for fear of contacting the disease. Amiwero urged the government to focus on taking strong precautionary measures to contain the spread of the virus to help saves lives and cancel the target given to Customs pending when the pandemic will last.

He said “government should forget anything about revenue target for now because there is a shut down all over Europe and nobody can go to China. The most important thing that is required of government now is to take precautionary measures to save lives, not looking at the economy now but life. China is going down, just as America too, Customs is not the only one bringing the cargo.

It will be observed that since the border were closed, daily revenue generation had hovered between N4.7billion and N5.8billion.

However, in the last two week the service has been losing about 50 per cent of its revenue to Coronavirus outbreak, records from the service has shown that the service has been losing 50 per cent of its revenue to corona virus outbreak.

It was revealed that the lockdown imposed by the Federal Government on Lagos state to curb the spread of the pandemic made commands in the state to record a sharp fall in their revenue generation as the Apapa Area Command Tin Can Island Port Area Command and PTML Area Command are losing N2.3 billion daily.

As a result of the shortfall, the Customs spokesperson in Apapa Area Command, Nkiru Nwala explained that the command which was the highest revenue collecting had been recording an average collecting of N900million against its daily target of N1.8billion.

Nkiru noted that the consequence of the lockdown would have been minimal on the command if the banks had reopened for operations.

According to the spokesperson none of the activities in the port was stopped but the major issues were the banks, saying that there was little the Command could do without the banks. Stressing that, the duty payment was beyond online transaction, noting that it involved a lot of documentations.

However, it would have been a bit different if the banks have been asked to open. Since the banks will be opened by weekend, I am sure the revenue will improve.

The same complaint at Tin Can Island port Command, which has been recording a shortfall of N700million daily revenue collection since the lockdown.

Command Uche Ejesieme, explained that prior to coronavirus, the service was collecting an average of between N1.5 and N1.7 daily saying that the amount had dropped to between N800 and N900 million daily.

Also, spokesman of Port and Terminal Multi-Services Limited, (PTML), Area Command, Yakubu Mohammed said that the lockdown had negatively impacted the earning of the Command as most of the agents could not come over to lodge their declarations.

The spokesman also complained that the command’s revenue had declined from a daily collection of between N900million and N89million, while the number of declarations had dropped from N1,500 daily to N100.

The spokesman however, said that the Command’s daily revenue target was N1billion but on the average, it has plummeted to between N600 million and N900 million.

His words: “If you look at what we have from when the lockdown started the rate has really dropped. For instance, we generated a little above N160million on Tuesday, N130milion on Wednesday, and N180 million on Thursday.

Based on declaration, we normally lodge between 500 to 1,300 declarations in a day but since the lockdown, the declarations we lodge is not even up to 100. So looking at the rate, it has really gone down.

Conclusion: Trade facilitation at the ports and borders should be a source of concern to the Federal Government. Banks, importers, Customs agents and freight forwarders and other port users are to protect investment and businesses in the country.

In conclusion, Customs cannot meet the target set for themselves this year – especially with the coronavirus pandemic which is still ravaging the whole world.

Again, the Nigeria Customs Service should adhere to the submission of the Executive Secretary Port regulator who advised that good trade facilitation mechanism will rake in three times what they are getting now.