FG Needs to Cut Agencies at Borders to Facilitate trade, Generate Revenue, Says Okonjo-Iweala
The World Trade Organisation (WTO) director-general, Ngozi Okonjo-Iweala, asked the federal government to cut down the number of agencies at the borders as part of key reforms needed by the Nigeria Customs Service (NCS) to facilitate trade and enable more revenue inflows.
According to her, Nigeria, compared to other economies, has an unusually large number of government agencies at the borders, where better coordination and delegation are needed to facilitate trade.
She spoke virtually at the 2024 Controller General of Customs Conference, which began on Wednesday in Abuja, entitled, ‘Nigeria Customs Service: Engaging Traditional and New Partners with Purpose.’
“Nigerian agencies need to work with the Customs Service to streamline their approach to handling the border,” she said.
She recalled that this was an area the past government also struggled with during her work as the former Nigerian finance minister and coordinating minister of the economy, noting that things have not improved based on data available to her at the WTO.
Another area of reform, she suggested, is in improving risk management and reducing inspection rates.
She said in many developed economies, the share of consignments for physical inspection is lower than 1 percent, while Nigeria’s is around 90 percent, with an additional 9 percent of consignments scanned.
“Better risk management will have to go hand in hand with better compliance by firms, improved targeting and feedback from inspections, and less discretion on the part of individual officials to ensure customs’ own rules and that regulations are predictably and consistently applied, coupled with effective sanctions.”
She further said that better risk management, information sharing among agencies, and faster clearance would contribute to reducing delays, noting that customs officers must be convinced to make the needed changes.
Okonjo-Iweala, who is set for a second term as the WTO DG, said: “Three initial measures could help enhance predictability in this regard.
Seizing the use of the Import Adjustment Tax, IAT, and thereby fully implementing the ECOWAS Common External Tariff. Limiting the use of tariff concessions under schemes such as Import Duty Exemption Certificate and making their use much more transparent, and removing most products from the import prohibition list that frequently receives discretionary waivers, to the extent that this accounts for approximately 6 to 7 percent of Nigeria’s imports.”
