Customs Hits N5.07 Trillion Revenue Target Following Forex Crisis and Higher Tariffs

Confidence UbaniNovember 13, 20242 Mins read46

The Nigeria Customs Service (NCS) announced on Tuesday that it has met its 2024 annual revenue target of N5.97 trillion. This was revealed by Comptroller-General Adewale Adeniyi at the 2024 Comptroller-General of Customs (CGC) Conference in Abuja. He confirmed that the agency had already collected N5.079 trillion, with over a month remaining.

Adeniyi said the service would exceed its target by 10 per cent by December 31, 2024. He said this achievement was due to better stakeholder collaboration, improved processes, and modernised systems. He also credited reforms like the Authorised Economic Operators (AEO) scheme and 24-hour cargo clearance, which have helped increase revenue and improve trade facilitation.

The Comptroller-General added that NCS made seizures valued at NGN 28.1 billion, including high-risk items such as wildlife products, arms, narcotics, and illicit pharmaceuticals. A state of emergency at key ports also led to the interception of 48 containers carrying prohibited pharmaceutical items and drugs.

Although Adeniyi attributed the revenue surge to improvements within the service, some Nigerians believe it is due to ongoing forex challenges and higher tariffs. Some others also questioned the NCS’s conduct and methods.

“Customs hitting its 2024 revenue target of N5.1trn by November raises a red flag; either they’re overcharging or exploiting the public in some way. No Govt agency should be designed to be so focused on meeting revenue targets. Their role is to serve the people, and earn a reasonable compensation for doing their job, not to be driven by revenue goals”, a social media user @ayemojubar stated.

Another user, Hamma, said:

‎”Customs are being clever by half. Nigeria’s highest-ever collection was $6 billion in 2014. This year’s collection of 5 trillion Naira is just $2.9 billion…. At the current exchange rate, they would need to collect 10.2 trillion Naira to match 2014’s performance.”

In the first half of 2024, vehicle imports into Nigeria dropped by 60 per cent, mainly due to high exchange rates and increased import duties. The rising cost of clearing vehicles has made them unaffordable for many Nigerians. Beyond the automobile sector, fluctuations in customs duties have widely affected importation businesses in Nigeria.

On February 26, 2024, the Central Bank of Nigeria (CBN) issued a directive requiring the Nigeria Customs Service (NCS) to use the foreign exchange closing rate on the day Form M is submitted for clearing goods and assessing import duties. This was aimed at reducing forex market volatility. However, the NCS has faced criticism for disregarding the directive and using a higher exchange rate for import duties and clearance.

Nigeria’s ongoing currency crisis remains a persistent and troubling challenge. The depreciation of the naira has contributed to increased Customs revenue, as it raises the value of imported goods in naira, leading to higher import duty payments. However, this has also resulted in higher import costs, placing additional financial pressure on consumers and businesses.

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