Senate approves N238 billion for Nigeria Customs in 2020

The Senate on Tuesday approved N238.1 billion (N238,149,325,832.70) for the Nigeria Customs Service for 2020.

The approval followed the presentation of the report of the Senate Committee on Customs, Excise and Tariffs which considered the proposed budget for the Service.

Chairman of the committee, Francis Alimekhena (Edo North), who presented the report, said the budget is based on the federal government’s Medium Term Expenditure Framework (MTEF).

Breakdown of the budget:

i. Personnel Cost N98.61 Billion representing 41.41 per cent Annex I

ii. Overhead Cost N15.95 Billion representing 6.70 per cent Annex 11

iii. Capital Cost N123.59 Billion representing 51.89 per cent Annex III

Mr Alimekhena said the budget seeks to establish E-Customs Project through massive deployment of information communication technology to eliminate personal interface in customs operations.

This, he said, will enable the agency efficiently interconnect with all relevant trade ecosystem partners and all-round automation of all manual payments in every custom formation.

Some highlights of the bill include; implementation of the Nigeria Customs Service Salary Structure for 15,892 officers and men of the Service; recruitment of 3,200 officers and their training and provision for payment of annual premium on both Group Life/Personal Accident Insurance as provided in the new pension scheme as well as to settle part of outstanding claims of deceased officers.

He added that provision is also made for the construction of new Zonal offices, Multipurpose Theatres, Warehouses, Barracks and Housing accommodation across the headquarters, Zones and Area Commands. Provision is also made for purchase of Surveillance equipment for the border posts, “given the security challenges, operational boats for anti-smuggling activities and purchase of power generators.”

He thereafter, urged his colleagues to approve the amount, “as the task for the Nigeria Customs Service are enormous at this period of international security threat and dwindling economies.”

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“Given the importance of the agency in terms of economic stimulation, trade facilitation, revenue collection and security at the borders and ports, the Committee hereby urges the Senate of the Federal Republic of Nigeria to give the budget a speedy passage,” he said.

Other concerns

Prior to the approval, some lawmakers complained that the report presented was incomplete. They also argued that the Customs Service still collect money from the federation despite the seven per cent shares it gets from collection.

Part 5(1)(a) and (e) of the Customs and Excise Management Act as amended provides that the Customs Service shall keep and maintain bank accounts as may be approved by appropriate authority of the Federal Government into which shall be paid 2.5 per cent of the free-on-board value of Imports, Exports and Excise payable by Importers, Exporters and Excise Traders respectively.
And e. seven per cent Port Development Levy.

Adeola Olamilekan, who is the chairman of the Senate Committee on Finance, wondered why the budget had more than six line items of revenue which include “two per cent VAT share of the Nigerian Customs Service, 60 per cent share of the CISS, share of target surplus for 2019, intervention fund for 2018 and received in 2019, outstanding fund for the on-going project of about 49.4 billion, among others.

“The outstanding funds for ongoing projects for the Nigerian customs…What we understand is that the seven per cent cost of collection accrued to the Nigerian Custom and their two per cent VAT share of the Nigerian Customs Service…that is where they get their expenditure from including capital expenditure and the current.

“Here, it shows that side the seven per cent cost of collection, a the twp per cent VAT shares, Nigerian Customs is still collecting money from the federation account.”

In his defence, Adamu Aliero, a member of the committee on Customs, explained that the cost of collection “is actually coming from the federation account.”

He said the shares collected by the Customs Service is an entitlement which is already contained in the Act.

“If you look at it, seven per cent of that amount is equivalent to N424.1 billion. Equally, the Custom is entitled to two per cent of the VAT collected and that will amount to 7.5 trillion.

“This is backed by an Act of the National Assembly. The House conceded this and we did so too. If we have any issue, we should go and revisit the Act we passed and amend it.

“The Custom is also expecting special interventions from the Presidency and this special intervention has to come from the President. And the Comprehensive Import Supervision Scheme (CISS) which 60 per cent share, customs is entitled to that. This has been the practice since the commencement of CISS which started in 1978,” he said.

While noting that the report is proper and urged his colleagues to approve it, the lawmaker commended the current Comptroller General of customs, Hammed Ali, for “improving the welfare of the service.”

“Now a graduate is taking home close to about 300,000,000 every month. It has never happened before. We will hold customs responsible for whatever losses we experience because we have given them all they want.”

On his part, Albert Bassey said the committee should be mandated to ensure that the report as submitted in line with the budget items are strictly adhered to and the expenditure effectively monitored.

“Based on the confidence we have in our committee, the Senate should be at liberty to pass this report,” he said.

Matthew Urhoghide, however, complained about the failure of Ministries, Departments and Agencies to audit their accounts.

Mr Urhoghide, the chairman of the Senate Committee on Public Accounts, said such issues have drawn criticisms to the national assembly.

The lawmaker had in November 2019, given an ultimatum to 25 agencies, including the Federal Inland Revenue Service and the Central Bank of Nigeria.

“Often times, what preceded the consideration of budget is the performance from the previous year. The Customs Establishment Act says their own account must be audit six months into a new financial year. Its only in this country, when we are considering budgets like this, nobody talks about the audited account of the agency.

“Every time you see all these agencies…their budgets are in deficits. Our committees must begin to ask the question. If this amount is budgeted and in that same year, you are in deficit of your own financial audit and you have not submitted your report to the auditor general, this budget should not be considered.

“These are big spenders. The fact that seven per cent as operational cost does not mean that the account should not be audited. Of 450 agencies we have looked into almost all of them are in deficit. For us to keep considering these things, it aches my heart and we keep coming in here year in year out to give them more money. I think we need to change our position,” he said.

Lawan talk tough

In his remark, the Senate President, Ahmad Lawan, warned agencies who fail to audit their accounts that there will be drastic measures.

This is even as he said audited accounts must be presented by December.

“We expect MDAs to present their audited accounts before the end of the year especially towards the end of December or at least the first quarter of next year, that is if we include all the calendar months.

“If any agency refuses or fails without any cogent reason, we have reason to take a drastic action when it comes to appropriation because not to account for what you have been given in the previous year, that is to say you are not prepared to take a new budget.

“So I’m advising the MDAs, especially those that are not up to date with their audited accounts to do so. We could decide as a national assembly to take measures against agencies of government that are not up to date with their audited accounts.”