The Comptroller-General of the Nigeria Customs Service (NCS), Adewale Adeniyi, has disclosed that the NCS failed to reach its revenue target of N3.68 trillion, earning about 87% of its target for 2023 with a shortfall of N478 billion due to a challenging operational environment.
However, it recorded a total revenue collection of N3.21 trillion, marking a substantial 21.4% increase from the previous year’s N2.64 trillion.
Reason for the shortfall
Adeniyi acknowledged that operational challenges played a pivotal role in the initial N532 billion revenue shortfalls recorded in the first half of 2023.
These challenges included lower transaction volumes, compliance issues, inadequate infrastructure, capacity gaps, delays in policy implementation, and socio-political factors.
He said:
- “Operational challenges such as lower transaction volumes, compliance issues, inadequate infrastructure, and capacity gaps were compounded by delays in policy implementation and socio-political factors.
- “The anxiety associated with a major election year, the prolonged cash crunch linked to the introduction of higher denominations of the new Naira bills, temporarily impacted purchasing power and overall economic activities.
- “The transition of power to the President Tinubu-led Administration brought about new policy direction, including the removal of fuel subsidy, the floating of the exchange rate, and the closure of Nigeria’s Northern borders with Niger Republic, adding another layer of complexity.
- “These challenges led to a revenue shortfall of N532 billion in the first half of the year, falling short of the projected revenue target of N1.84 trillion.”
Further, he noted that the latter part of 2023 witnessed a positive transformation following Adeniyi’s appointment as Comptroller-General in July.
Merit-based reconstitution of the management team, streamlining enforcement under the Federal Operations Unit (FOU), and other strategic measures, including stakeholder engagements and an ideas bank, contributed to the impressive resurgence.
Monthly revenue collection for the latter half of the year averaged N332.9 billion, significantly surpassing the initial N201.7 billion recorded in the first half of the year.
This turnaround played a crucial role in reducing the revenue shortfall by 10%, decreasing it from N532 billion to N478 billion by year-end.
He explained further:
- “Moreover, the deficit in NCS revenue collection can be ascribed to deliberate government initiatives and incentives designed to foster the growth of various sectors within the economy.
- “Specifically, the government approved a concession of N2 trillion, incorporating select dutiable items under the new Tariff heading Chapter 99. This policy shift resulted in the exemption of duty payments on certain dutiable goods, previously falling within a duty range of 5% to 10%.
- “The overarching objective of these granted waivers and concessions was two-fold: to stimulate development across diverse economic sectors and to bolster the nation’s overall peace and security”.
Fight against smuggling and illicit trade
The NCS noted that its campaign against smuggling and illicit trade in 2023 resulted in 3,806 seizures with a Duty Paid value totalling N16.05 billion.
These confiscations included arms and ammunition, artifacts, illicit drugs, expired food produce, and endangered species of flora and fauna.
Also, the NCS achieved 52 convictions, with 11 specifically linked to illicit trade in animal/wildlife.
N5.08 trillion target for 2024
The NCS Comptroller-General also said that the NCS is determined to meet the newly set revenue target of N5.08 trillion for the fiscal year 2024.
He outlined several strategic initiatives poised to impact the NCS’s performance positively, including the introduction of the Advanced Ruling system and aligning operations with global best practices.
He also said that the NCS is set to inaugurate an electronic auction (e-auction) platform, enhancing transparency in the auction process.
Adeniyi emphasized that the government’s confidence in the NCS’s capabilities underscores its significant role in contributing to the nation’s fiscal well-being.
The strategic initiatives and operational reforms put in place are expected to play a crucial role in achieving the N5.08 trillion revenue goal for 2024.
Nigerian