Why Nigeria needs WCO SMART borders, by Nwabunike
Chief Iju Tony Nwabunike is the pioneer chairman of Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) and a maritime consultant in this interview with journalists; he says Nigeria’s international borders do not have the equipment required of modern day land borders. He added that while the World Customs Organisation supports the concept of SMART borders for seamless trade, travel and transport, the country is yet to achieve the SMART borders. MAUREEN AGUTA was there
What is the role of a Customs Broker?
The Customs Broker universally is an individual or a company licensed to operate as an intermediary for the importers and exporters in matters pertaining to customs clearance and procedures.
I will deliberately refrain from arguments that have to do with the distinctions between the customs broker and a freight forwarder. There are very distinct differences between them and veering into that subject could elicit debates outside the scope of this discussion. In climes like the United States and Canada, a Customs Broker is either an individual or a firm licensed by US Customs and Border Protection (CBP) or the Canadian Border Service Agency (CBSA). Until 2023, the Nigeria Customs Service relying on its extant Customs and Excise Management Act (CEMA), now replaced by the Nigeria Customs Service Act (NCSA) 2023 has always been empowered to issue licenses to agents under corporate identities.
While the words ‘Customs Broker’ is not found in the 2023 NCS Act, Licensed Customs Agent performs and serves the same purpose in Nigeria. What this implies is that, even as individuals seeking to practice as licensed customs agents, as they are called in Nigeria (because I may use this interchangeably in the course of this discussion) an applicant seeking a license to practice must come under a registered company name.
Your definition of who a Customs Broker is brings us to the main purpose of this interview. What is the role of the Customs Broker in sustaining a viable trans-border trade for national economic growth?
In answering the above question, it is pertinent to restate that Benin Republic, Cameroon, Chad and Niger are the four, proximate countries sharing borders with Nigeria and these countries fall into two distinct economic blocs -Economic Community of West African States (ECOWAS) and Economic Community of Central African States (ECCAS). Trade itself is dynamic and influenced by state policies regulating import, export and manufacturing or agriculture. What is allowed in one country could be prohibited in another country.
For the purpose of this discussion and ease of understanding, I will itemise the role of Customs Broker under six areas namely intermediary, facilitator, educator, revenue generator, strengthening economic relationship and promoting regional diplomacy.
Before we go into those roles, let us know what is the peculiar nature of the Nigerian borders?
Nigeria being an Anglophone (English Speaking) country is surrounded by neighbours that are predominantly (Francophone) French Speaking, which on its own is a challenge when it comes to trade dialogues. Our borders are also devoid of equipment required of modern day land borders. Whereas, the World Customs Organisation (WCO) supports the concept of SMART borders for seamless Trade, Travel and Transport. Nigeria is yet to achieve smart borders in the real sense of it.
WCO Members are encouraged to look at how they can strengthen their endeavour to facilitate trade and travel, whilst mitigating threats inherent in the cross-border flows of goods, people, and means of transport. Our “SMART” acronym stems from the following guiding principles: Secure, Measurable, Automated, Risk Management-based, and Technology-driven.
The rapid and safe movement of people and goods across borders encourages trade, travel and transport, and Customs has the dual task of facilitating this flow while securing it. This is no easy task and Customs is expected to be focused and determined to achieve its goal.
Can you expatiate on this SMART border as it relates to Nigeria?
Yes.
Secure: Nigeria is still grappling with security in some border states, especially in the northern part of the country
Measurable: Due to inadequate technology for monitoring and evaluation, there has not been an accurate template for measurements of the degrees of trade.
Automated: As I have earlier stated, required technology for border management are not in place at various border stations in the country. Things like effective Close Circuit Television (CCTV), fixed and mobile scanners for import and export cargoes, body scanners for passengers and others are not available at the borders. This confirms the low level of automation across the borders.
Risk Management: This is the continuing process to identify, analyze, evaluate, and treat loss exposures and monitor risk control and financial resources to mitigate the adverse effects of loss. Nigeria may not be doing badly in this area but there are rooms for further improvement.
Technology Driven: In this aspect, as earlier mentioned, Nigerian borders are more of manual operation than tech driven.
Okay. Can we now look at the role of the Customs Brokers?
Yes.
Intermediary;
The customs broker is a go-between for the NCS, importer and exporter as he is deemed knowledgeable in the processes and procedures of cargo clearance either for import or export. In some cases, the broker is contracted by the importer or exporter to offer his services for a fee and liaise between importer, exporter and agencies of government.
Facilitator;
As a matter of professional responsibility, the customs broker makes transactions between the customs and the importer/exporter easy.
Educator;
Due to his vantage position supported by his strategic presence at the entry points- sea ports, airports and border stations, the customs broker is more abreast with relevant trade information. This confers on him the advantage to educate the importer, exporter, haulage operators and freight forwarders on things like the import/export prohibition lists, Harmonised System (HS) Code, tariff, classification and other areas of interest.
Revenue Generator;
Over 70 per cent of revenue made by the government through its agencies from import and export activities has direct and indirect participation of the freight forwarders.
For 2024, the Comptroller General of Nigeria Customs Service recently said the service aims to collect N6 trillion for the government. Over 4 trillion of this projected collection will likely be made through customs brokers. This is why I would like to reiterate my call to the government to consider giving a percentage through statutory provisions to the customs broker.
Giving them a percentage solidifies their stake and would enhance their productivity as their benefits would be dependent on what they made for the government. This will be a win-win for the government and the brokers as more revenue would be collected. It will also reduce the stress of deploying risk management tools like post clearance audits, alerts and demand notices (DN) to prevent revenue loss.
Strengthening Economic Relationship;
The economic relationship between countries sharing common borders gets more strength from the activities of Customs Brokers.
Promoting Regional Diplomacy;
Within regional trade blocs, agreements like ECOWAS Trade Liberalisation Scheme (ETLS) which seeks to protect trade interests of 15 countries.
The scheme offers unhindered market access to the fifteen member Countries and promotes economic relations within the sub-region. Countries covered by the Scheme are; Nigeria, Ghana, Benin, Côte d’Ivoire, Gambia, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Senegal, Sierra Leone, Togo, Burkina Faso, Cape Verde. Customs Brokers who in the course of their services uphold the spirit and letter of such agreements are promoting regional diplomacy.
It then means that in international trade, we can’t do without the Customs Broker; don’t you think so?
The cumulative impacts of trade across various spheres contribute to national economic growth and the importance of the Customs Brokers cannot be over-emphasised when it comes to this. They touch directly on local and global trade thereby impacting the economy.
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