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Nigeria: Disagreements Among Concessioners Delaying Take-off of $3.1bn e-Customs Project, FG Says

The federal government has explained why the $3.1 billion contract for complete automation of the Nigeria Custom Service (NCS) approved by the Federal Executive Council (FEC) in 2020 was reversed.

Nigeria Minister of Finance, Budget and National Planning, Zainab Ahmed

The federal government has explained why the $3.1 billion contract for complete automation of the Nigeria Custom Service (NCS) approved by the Federal Executive Council (FEC) in 2020 was reversed.

It said disagreement among partners that formed consortium for the project delayed its take off despite efforts by the government through the office of the Attorney General of the Federation and Minister of Justice to mediate.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, who spoke to newsmen on Wednesday, after the weekly virtual Federal Executive Council (FEC) meeting presided over by the Vice President, Prof. Yemi Osinbajo at the State House, Abuja, explained the rationale behind a new e-Customs concession agreement between the NCS, Africa Finance Corporation (AFC) and China’s Huawei Technologies Limited.

According to the minister: “The e-Customs project was approved by Council. And there were some challenges that had to do with disagreements among the concession partners.

“Remember that government was not a partner of the concession, it was a group of different investing parties that came together and formed the consortium.

“The Attorney General and Minister of Justice has intervened. There were several number of meetings to try to iron out the difference. So it has to do with shareholders, who has what responsibility. And at the end of the day, I think one of the partners in the concession did not agree with the arrangements.”

Speaking further, he said: “So the partner that signed was already in the initial concession. So that one party did not agree with the terms that are signed. And there is a new agreement that had been signed and that partner was reported to have opted out of the concession.

“I haven’t seen the report yet but it was reported to have opted out of being in the concession. So there is a new concession agreement that has been committed. And on the part of the ministry and I know Custom, what it means is that the implementation of e-Customs project can now start with this resolution.”

The NCS Comptroller-General, Col. Hameed Ali (rtd) who signed the new contract in Abuja, Monday, had explained that the NCS would generate a whopping revenue of $176 billion over the next 20 years through the implementation of e-customs project.

Ali reportedly said the e-Customs concession project would ease the cost of doing business, boost revenue, enhance productivity and stop every arbitrariness in the service.

He said: “The $3.2 billion e-Customs project to be financed by the Africa Finance Corporation (AFC) and managed by Huawei Technologies Limited under a 20-year concession window, when fully implemented, would quadruple Customs’ current N210 billion monthly revenue collection.”

The project which was approved by FEC on September 2, 2020, and awarded to Messrs E. Customs HC Project Limited, was expected to last for 36 months, to enhance the agency’s mode of operation using the application of information and technology in all aspects of its administration.

“The main objective of this project is to completely automate every aspect of the customs business and to institutionalise the use of smart and emerging technologies that will enhanced the statutory function of the Nigerian Customs Service in the areas of revenue generation as well as trade facilitation and enhancement of security,” the Minister of Finance and Budget Planning, Zainab Ahmed, had told State House Correspondents shortly after the meeting in 2020.

Also, Ahmed disclosed plan by the federal government to address rising cost food prices across the country as it plans to convene a meeting of the National Food Security Council shortly.

She also disclosed that that FEC gave approval for the National Food Security Council to meet, “very quickly to address the issue of food inflation, and also provide a plan and some methods in which we can reduce the cost of food to support improved food prices for the citizenry.”

She further said the Council was briefed about the rising inflation rate and the need to manage the cost of inflation in the country.

Ahmed added that FEC considered a report from the Ministry of Finance, Budget and National Planning for the first quarter of 2022 Gross Domestic Product (GDP) report which showed that the Nigerian economy grew by 3.1 per cent in the first quarter of 2022, as against a growth of 0.5 per cent in the first quarter of last year.

Her words: “This growth shows a gradual economic stability from the recession that we witnessed in 2020. And also it shows the six quarter of positive growth that the Nigerian economy has presented.

“So of the 46 economic activities, the bulk sector performance show that services sector grew strongly by 4.7 per cent, agriculture also grew by 3.61 per cent, Industry on the other hand contracted by minus 6.81 per cent and there was also a significant contraction in the crude oil, petroleum and natural gas sector of 26.04 per cent.

“Coal mining sector also declined, oil refinery the biggest contraction of 44.26 per cent, electricity sector, textile outcome. Therefore, even though there has been growth in some sectors, there are significant contraction than others but the net effect is positive growth.

“We’re very mindful of the fact that unless we have most of the sectors growing especially the growth in the jobs impacted sectors, that this growth that is positive will not be directly felt by the people.”

According to her, “We also reported to Council that inflation has started going upward to the extent that the monetary authorities of the Central Bank of Nigeria have had to adjust the Monetary Policy Rate (MPR) to 13 per cent at the last Monetary Policy Committee (MPC) meeting and that’s an attempt to manage the cost of inflation.

“So, Council has decided to set up a special effort to look at the sectors that are not growing and also to look at how we can grow the other sectors better.”

Also briefing newsmen after the FEC meeting, Minister of Power, Abubakar Aliyu, said the Council approved the contract, “to supply and install emergency restoration system or 330 kV and 132KV transmission line for ongoing rehabilitation works in Lagos at the sum of $968,818 as the offshore component, the onshore component is N7,393 million and the contractor is Rab Power Industries Limited.”

Commenting on the update on the federal government electricity deal with Siemen of Germany, he explained that he recently toured their facilities in Germany to ascertain the level of work in the production of the equipment and was satisfied with the spate of work so far.

According to him, despite the impact of the ongoing Russia/Ukraine war which slowed down the process of their production, he had been able to get Siemen committed to supply 10 mobile transformers to be installed in the country by September this year.

He disclosed that works are ongoing in the country as contractors are already working on the sites to prepare grounds for the installation of the equipment immediately they arrive in the country.

On his part, the Minister of State for Petroleum Resources, Timipre Sylva, disclosed that the Council approved the memo for the NNPC Limited to execute a Memorandum of Understanding with ECOWAS for the construction of the Nigeria-Morocco Gas Pipeline to take gas to 15 West African countries and through Morocco to Spain and Europe.

Giving a breakdown of contracts approved for his ministry, he said N3.8 billion was approved for the construction of a switchgear room, an installation of power distribution cables and equipment for the Nigeria Oil and Gas Park in Ogbehia, Bayelsa state.

This, he said, was to support local manufacturing of components for the oil and gas industry.

Sylva added that, “Council also approved various contracts for the construction of an access road with bridges to the brass petroleum product depot in Nibomoyekiri in brass local government in the sum of N11 billion plus 7.5 per cent VAT.”

The Council also okayed a Memorandum of Understanding (MoU) for the purchase of 82 Toyota brand of vehicles, branded raincoats and sundry other accoutrements for the use of the Nigerian Police at the total cost of N8,315,209,825.

This came following approval for the Nigerian Police Trust Fund to award contracts for the supply of sundry accoutrements for the efficient operation of the Police.

Minister of Police Affairs, Maigari Dingyadi, who disclosed this while also briefing newsmen after the FEC meeting, said the approval included the supply of customised raincoat for distribution to police formations across the country at the cost of N1.9 billion.

Dingyadi who said the memo which received the nod of the cabinet, included customised Police boots at the cost of N576 million.

According to him: “We also got approval for the supply of micro first aid kits for the police at the cost of N1 billion as well as customised instructional materials for the police colleges and schools at the cost of N664 million.

“There is also the supply of drugs and medical equipment for police hospitals across the country at the cost of N2 billion. When you add all these projects, they will come up to 8,315,209,825 billion.”

The Minister said the NPTL was set up as a special intervention fund to facilitate the improvement of the operations of Nigerian police force in the areas of equipment, training and welfare, adding, “what we’re having now have been assembled from the output of the end user, that is the Nigerian police force.”

He noted that, “by the time these items are on ground, they will go a long way in improving the efficiency and effectiveness of Nigerian police in the maintenance of peace and security in the country.”