The Need To X-ray Operational Deficiencies In Trade Modernization Project At Customs Ports

By Roland Ekama

Concerns have been formally raised to President Bola Ahmed Tinubu regarding serious defects and operational challenges in the Trade Modernization Project Limited’s concession agreement, which governs customs clearance operations at Nigerian seaports, airports, and border stations.

Since the contract’s signing in May 2022, issues of legality, inefficiency, and duplication of existing systems have plagued the project, according to a comprehensive letter addressed to the State House.

The letter signed by Lucky Amiwero , President , National Council of Licensed Customs Agents (NCMDLCA) alleged that the concession agreement was signed by the Comptroller-General of the Nigeria Customs Service, without the participation or approval of the Minister of Finance, who by law chairs the Customs Service Board.

This omission Amiwero said, contravene key provisions of the Customs and Excise Management Act (CEMA) 2004, raising questions about the contract’s legality.

Further criticisms from the letter include the lack of modernization despite over three years since contract inception. The Trade Modernization Project is accused of duplicating ICT infrastructure already developed and operated by previous service providers, such as Webb Fontaine, Cotecna Inspection Limited, SGS, and Global Scan System Limited.

These earlier projects reportedly delivered significant improvements in customs automation and scanning technology, whereas the current project has resulted in increased delays, network failures, and mounting demurrages and rents impacting importers and licensed customs agents.

The letter recalls prior successful modernization efforts, notably the implementation of UNCTAD’s ASYCUDA system and Webb Fontaine’s ICT platforms, which revamped Nigeria Customs Service’s operations between 2005 and 2014. It contrasts this with the present setbacks and calls for urgent government intervention to resolve delays and inefficiencies currently facing ports.

Additional concerns address overlapping contractual obligations, especially regarding the supply and management of X-ray scanning equipment, which legislative provisions now require terminal operators to provide — a stipulation seemingly ignored by the Trade Modernization Project, thereby necessitating contract renegotiation.

The letter also warns of ongoing litigation involving Webb Fontaine’s intellectual property and stresses the financial implications of the concession fees being paid daily from customs revenues despite poor service delivery.

In closing, the letter urges the executive branch to establish a professional committee to thoroughly review the Trade Modernization Project’s legal basis, operational status, infrastructure deployment, revenue collection, and its impact on port efficiency and import costs. The objective is to safeguard national interests and relieve the financial burdens imposed on Nigeria’s trade sector.

The issues raised underscore pressing challenges in Nigeria’s efforts to modernize customs operations and streamline trade facilitation amid conflicting contracts and procedural gaps affecting the country’s key entry points.