Importers and clearing agents operating at the nation’s seaports have condemned the N12 trillion revenue target given to the Nigeria Customs Service by the National Assembly.
Speaking separately to LEADERSHIP, they argued that the revenue target is not only ambitious but also unrealistic as it will increase prices of goods in the open market and cost of clearance of cargoes at the seaports.
According to them, currently, there are heightened trade policy uncertainties, dwindling imports and exports activities, low ship calls to ports, and lower cargo throughputs impacting on imports volumes.
Speaking to LEADERSHIP, a vehicle importer said the revenue target will stifle trade as Customs officers will do everything to actualise the target.
The importer who craved anonymity over fear of victimisation, however, stated that the target would be counterproductive on the nation’s economy in the long run.
“It will be counter productive especially at this time that import is low due to fluctuating exchange rate. How do they want them to achieve it?” he asked rhetorically.
He continued, “with this, importers should expect tough times and the economy will definitely suffer for it.”
Also speaking, the chief executive officer, Centre for Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the plight of businesses and the citizens will suffer if the target is allowed to stand.
According to Dr Yusuf, high cost of cargo clearance is one of the contributors to inflation, saying the National Assembly should be sensitive to the plight of Nigerians by bringing relief to businesses and to citizens.
“Part of the source of high inflation is the high cost of imports. So, we expect that the National Assembly should also be sensitive enough to be able to see how we can bring relief to businesses and to citizens.
“This action is certainly going to worsen the plight of businesses. Because as the customs struggle to meet this target, it is the businesses and citizens that will pay for it ultimately. This inputs additional pressure on both the citizens and the businesses. Already the businesses are going through a lot, a lot of pressure from the point of view of the foreign exchange issues.
“From the point of view of the high energy costs, from the point of view of the weak purchasing power. So if the National Assembly is not doubling the revenue target of customs, that invariably will bring in additional pressure on businesses. And I don’t think that to be fair, especially at a time like this. Some of us will be clamoring for a reduction in the cost of cargo clearing because it’s already extremely very high, because imports are too high.
“So, what we expect to see from the National Assembly is also sensitive to the plight of businesses and to the plight of the people, is to see how we can even bring down the cost of cargo clearing, so that the cost of goods and services can come down.
“We are talking of high inflation, part of the source of high inflation is the high cost of imports. So, we expect that the National Assembly should also be sensitive enough to be able to see how we can bring relief to businesses and to citizens.”
Dr Yusuf, however, stated that the target will affect cargo throughput incredibly, and the investment will suffer as well as fuel inflation.
“Now this will affect cargo throughput. Already, because of the exchange situation, the cargo throughput has dropped. Many of the terminal operators have lamented and they are putting in millions of dollars. So, it’s going to affect investment in the maritime sector and its investors. So, I think the National Assembly should be looking beyond revenue.
“This action is certainly going to worsen the plight of businesses. Because as the Customs struggle to meet this target, it is the businesses and citizens that will pay for it ultimately. So, it’s a major concern.
“Then for people who are in business in the maritime sector, we have the terminal operators, we have those who are in business in bonded warehouses, we have those who are making a living in the maritime sector. I am talking of freight forwarders, truckers, haulage, courier companies, a whole lot of them.
“Now, this will affect cargo throughput incredibly. Already, because of the exchange situation, the cargo throughput has dropped.
Many of the terminal operators have lamented and they are putting in millions of dollars. So, it’s going to affect all the investment in the maritime sector. I think the National Assembly should be looking beyond revenue.
“They should be looking at the wider implications of some of these positions that they take on the issue of revenue. We should not be too fixated on revenue. We should not be too fixated on the investment we suffer and the citizens we suffer. Inflation will not come down.”
In a related development, the Maritime industry, the Sea Empowerment and Research Center (SEREC), also condemned the N12 trillion revenue target.
The head of research, SEREC, Eugene Nweke, said the N12 trillion revenue target for the Nigeria Customs Service in 2025 is quite ambitious and a stretch, considering the current state of the economy.
According to Nweke, the revenue is ambitious in the face of heightened trade policies uncertainties, dwindling imports and exports activities, low ship calls to ports, and lower cargo throughputs impacting on imports volumes.
He also disclosed that unstable foreign exchange regime and harsh trading environment are additional hurdles that could hinder the service progress to achieve the N12 trillion revenue target.
“The SEREC wish to strongly opine that, yearly revenue targets are not just mere figures to be given or pronounced under the euphoria of prevailing excitements, rather, revenue targets are given or pronounced after so many variables and indices duly putting in the right perspectives.
“Such variables or indices may include, weighing the impact of the previous year revenue generated on the trading environment, the economy in real time effects of inflation rate analysis, a performance graphs for local production inhibited by imported products, the direct impact to the lives of the citizens in general, with regards to consumers price index and poverty level indicators, etc.
“Against this background, the SEREC makes bold to state that the Nigeria Customs Service’s revenue target of N12 trillion for 2025 is quite ambitious and a stretch, considering the current state of the economy. Especially in the face of heightened trade policy uncertainties, leading to dwindling imports and exports activities, low ship calls to ports, and lower cargo throughputs impacting on imports volumes, etc. Indeed, it is challenging to really project how the NCS intends to achieve this target.
“Take note that the ever-increasing foreign exchange regime and harsh trading environment are additional hurdles that could hinder the NCS progress.
“It’s worth noting that, ahead of schedule, the NCS did achieve a significant milestone in 2024, generating a revenue of N5.07 trillion and at dying minute reported as closing it up to N6.105 trillion,” Nweke stated
The former president of the National Association of Government Approved Freight forwarders (NAGAFF), said for the service to meet the new target, they would need to significantly scale up their efforts and find ways to mitigate the challenges posed by the current economic environment.
“However, this milestone was largely due to the NCS strategic engagements and collaborative efforts with stakeholders, as well as improved processes and modernised systems.
“To reach the new target, they would need to significantly scale up their efforts and find ways to mitigate the challenges posed by the current economic environment, in addition to blocking leakages via the deployment of modern technologies.
“Obviously, the aggressive pursuit of this revenue target in the year 2025 could have a negative impact on the trade environment and the economy as a whole. It may lead to increased scrutiny and harassment of importers and exporters, which could further discourage trade and investment, especially, where the compliance level is at single digit increase.
“Additionally, the focus on revenue generation could divert attention away from other important aspects of customs operations, such as trade facilitation and enforcement of customs regulations.
“Overall, while the NCS’s revenue target is ambitious, it’s essential to consider the potential consequences of aggressively pursuing it. A more balanced approach that takes into account the current economic realities and the need for trade facilitation and enforcement would be more effective in the long run.
“In concluding, the SEREC wish to offer a word of advice to the government , by reminding and calling its understanding to the effect that, the NCS actions and inactions touches every sphere of our socio economic life of the citizens, who are already down, poverty wise, with inflation rate hitting at 34.8 per cent in December, 2024.
“Finally, the SEREC therefore called on the minister of finance and coordinating minister for the economy, who doubles as the chairman Board of Customs to be deliberate and real to his ministerial obligation to the nation, in the context of the matter under consideration.”
