FX scarcity casts doubt on Customs’ N900bn revenue target

The current dearth of foreign exchange in the economy is casting doubt on the ability of the Nigeria Customs Service (NCS) to meet its revenue projection of N900 billion this year.

Indeed, stakeholders, who took turns to assess the proposed revenue target of one of the nation’s major revenue earners  have  come to the conclusion that it may be extremely difficult for the service to realise the sum given the scarcity of foreign exchange needed for importing commodities into the country.

According to them, the high cost of foreign exchange and the shortfall in its supply coupled with the Federal Government’s delay in reviewing the policy restricting 41 selected items from having access to foreign exchange from the official, would continue to fuel low business at port vis-a-vis the Customs’ revenue.

Tony Anakebe, an industry analyst, who believed that it would be tough for the service to realise its set target, said port business have been largely affected by the slow pace in Nigeria’s business climate in the past two years.

He observed that the state of the economy was unfavourable to business such that goods were not coming due to the foreign exchange restriction by the Central Bank of Nigeria, which the Federal Government has refused to review, thereby making access to foreign currency very difficult.

“Most of these goods that used to come through the nation’s seaports have been diverted to Cotonu and Ghana seaports, and most Nigerians also import through Cameroun and bring the goods through land borders close to the northern part of the country.  At the end, it is Nigerian governments that lose revenue from those smuggled goods,” he added.

The bottleneck in cargo clearance, he pointed, makes the port unfriendly to users. For instance, there has been the problem of scanning, from 2015 till date, all containers go through 100 percent physical examination due to lack of scanning operations by Nigerian Customs Service.

“Secondly, the bad state of the roads leading to the two major economic gateways (Apapa and Tin-Can Island ports) and the indiscriminate packing of tankers and trailers on the port access roads, have led to difficulty in moving containers in and out of the port, and its add to delay at the port.”

Emma Nwabunwanne, a Lagos based importer said that if Nigeria continues to implement foreign currency restriction this year, it will be extremely difficult for Customs to realise its 2017 targets.

“I do not see business picking up in the first quarter because the volume of TEUs has continued to reduce. This may force foreign investors to start rethinking on how to save cost while some others will close shop, as in the case of some bonded terminals,” he added.

Recall that NCS says it hopes to generate between N700 billion and N900 billion as revenue for the Federal Government this year. Hammed Ali, comptroller-general, who disclosed this in Abuja recently during this year’s International Customs Day, said that the service generated N898 billion from the N937 billion target set for 2016.

“We are looking at between N700 to N900 billion. The budget has not been finalised. Until the budget is finalised we will get the final approval. We targeted N937 billion last year but we were able to get N898 billion. Looking at the trade last year, you appreciate the fact that the Custom has done extremely well, added”

Uzoamaka Anagor-Ewuzie

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