Border closure – Customs vs car dealers: The billion naira war

This is not the best of time from car dealers across the country following the onslaught by the Nigeria Customs Service (NSC) leading to huge losses on the part of the dealers while the service insists billions were being recovered. CHIZOBA OGBECHE, DAVID AGBA and TOPE SUNDAY examine the implication of the war.

From Abuja to Lagos, Sokoto to Kano, and beyond car dealers have been at the receiving end of the fury of officials of the Nigeria Customs Service (NCS) on a solo mission to enforce ban on importation of used cars as well as ensure the closure of the country’s borders was effective.

President Mohammed Buhari had ordered the closure of the country borders in a bid to check massive smuggling activities as well as to secure Nigeria’s land and maritime borders.

The exercise, code-named, ‘Ex-Swift Response’, was being jointly conducted by the customs, immigration, police and military personnel and coordinated by the Office of the National Security Adviser.

According to Presidential spokesman Mr Femi Adesina, in a statement in Abuja, said the limited closure of the country’s western border was to allow Nigeria’s security forces develop a strategy on how to stem the dangerous trend and its wider ramifications.

In a bid to catch up with car dealers who defaulted in payment of duties had orchestrated a crackdown on car dealers shutting not less than 101 car marts in the North and other parts of the country as it took its operations from the FCT to Kaduna, Kano, Ilorin, Sokoto and Kebbi, in operation said to have been led by the Federal Operations Unit (FOU), Zone B in Kaduna.

Abuja raids

Customs operatives reportedly raided some car marts in the FCT, sealing some of them while registration details of some of the vehicle were said to have been documented by the officials. Blueprint Weekend, however, could not ascertain the exact number of shops and vehicles impounded during the operation.

The operation in the nation’s capital took a twist when guests and staff members of a popular hotel, Frasier Suites, located in the Central Business District, Abuja, was raided by men of the NCS on Wednesday night.

The officials, who blocked the hotel entrance with customs patrol vehicles marked Zone B, Federal Operation Unit, and Strike Force Unit, were reported to have impounded not less than 11 vehicles mainly of Toyota, Lexus, and Mercedes Benz brands. The officials were said to have been acting on the instruction of the comptroller of the unit.

Why we raided Fraser hotel

Confirming the raid of the hotel, Customs spokesman, Joseph Attah, said the hotel was raided after a total of 10 smuggled cars were identified.

He said, “Our men got wind that some cars were smuggled in and they were being taken to the hotel, in their car park. So we went to the place and invited their managers. We left with four of the cars and six are still there.

“This morning the manager followed us to our office and he wrote an undertaken that if he can provide the papers, we will release the cars to them.”

Lagos too

Customs officials also raided some top car marts in Lagos. The Comptroller General’s Strike Force and officers attached to the Federal Operations Unit (FOU), Zone ‘A’, Ikeja, were was said to have stormed Berger along Apapa-Oshodi Express Road and other premises across the state.

Many of them were closed on the orders of the Comptroller General of the Service, Col. Hameed Ali (rtd), for allegedly retailing smuggled vehicles in the shops.

While confirming the raids, Attah said: “A number of car marts were shutdown based on credible information that there were smuggled vehicles in these car marts, but the sealing is just temporary. This week, we will assess the situation and advised them accordingly as to what they should do.

“As of now, I don’t have the numbers but those not involved in any bad business were not shutdown. But I can confirm that some numbers have been shutdown. Within the week, customs will take a look at the records of each vehicle in these car marts and appropriate actions will be taken.

“The target is not really to bring any unnecessary hardship to any individual, the idea is to see the possibility of either seizure or recovery of revenue for such vehicles.”

…Katsina, Sokoto too

After the Lagos raids, Customs also sealed the premises used for selling cars in Katina and Sokoto states.

In Sokoto, the Customs clampdown on the used car dealers started around 12 midnight on Monday.

“They came to our place, took chassis numbers of all our vehicles before sealing up the premises,” one of the car dealers, Shafi’u Bankanu, said.

He said the same operation was taking place in Kebbi and Zamfara states as gathered from their colleagues.

“They told us they would take away our vehicles whose duties were not paid,” he said.

On Tuesday, the operational vehicles of Customs with armed operatives were seen stationed at the gates of the sealed premises in Sokoto.

When contacted, the spokesman of the Sokoto Area Command of Customs, Magaji Mailafiya, declined comment on the development.

In Katsina, no fewer than 20 used car marts were reportedly sealed by the Customs officials.

The officers, who carried out the operation on Monday night, raised debit note representing import duty shortfalls on the vehicles at the various sealed premises.

The chairman of car dealers in the state, Sabo Musa, said the group was meeting “to find a solution” to the Customs action.

Duty evasion won’t be condoned

FOU Zone B Controller, Comptroller Mustafa Sarkin-Kebbi, had said that the operation was part of a renewed anti-smuggling campaign aimed at ensuring compliance with import guidelines.

He explained that the extant laws empowered the Customs operatives to enter any building suspected to have smuggled items.

“The Comptroller-General, Col. Hameed Ali, has graciously approved that owners of vehicles affected in the shutdown can come forward to pay and collect their vehicles.

“This is a window of opportunity for owners of smuggled vehicles to come forward and pay Customs duty to avoid forfeiture.

“Persons with vehicles that do not have duty papers can also voluntarily come forward to pay duty on such vehicles too. Duty evasion which robs government of revenue will not be condoned under our watch because our Comptroller-General has declared zero tolerance for such unlawful act.

“It is no doubt, economic sabotage and will not be allowed to stand. As we speak, our men are intensifying efforts in this exercise which aims at ensuring compliance, collecting maximum revenue for government, discourage smuggling and growing the economy.”

Customs rakes in N5.8bn daily

The Comptroller-General of Customs, Hameed Ali, told members of the National Assembly that the Nigeria Customs Service (NCS) has been raking in between N4.7billion and N5.8 billion daily since the federal government closed the nation’s land borders.

Ali stated this when he appeared before the Senate and House of Representatives joint committees on Finance and National Planning, working on the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The development came just as the joint panel summoned the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele and the Comptroller-General of the Nigeria Immigration Service, Muhammed Babandede, to appear before it.

The heads of the two agencies are expected to brief the joint panel on the MTEF/FSP documents.

The NCS boss, had while addressing the lawmakers said the land border closure was a blessing to the nation.

He said, “When we closed the border, my fear was that our revenue was going to drop. To be honest, our revenue kept increasing.

“There was a day in September that we collected N9.2 billion in one day. It has never happened before.

“This is after the closure of the border and since then, we have maintained an average of about N4.7 billion to N5.8 billion on a daily basis which is far more than we used to collect.

“What we have discovered is that most of those cargoes that used to go to Benin (Republic) and are then smuggled into Nigeria, now come to us.

“Now that we have closed the border they are forced to bring their goods to either Apapa or Tin Can Island and we have to collect duty on them.

“If that (border closure) would continue, to us, it is a welcome situation. Our revenue has not reduced. As a matter of fact, it is increasing as a result of the closure of the border.

“About 10.2 million litres of fuel have now been cut down from what we assume we have been consuming.”

Why border’ll stay closed

According to Ali Nigerian borders would remain closed until neighbouring countries comply with protocols on movement of goods and persons as established by the Economic Community of West African States (ECOWAS).

Ali, who said this while speaking with journalists during a visit to the Idiroko Border in Ogun state, announced that there was no end in sight to the partial closure of land borders until the condition was met.

He noted that adherence to protocols on movement of persons and goods would ensure mutual benefit of the countries and enhance coexistence.

Ali, who was with the Controller-General of the Nigerian Immigration Service, Muhammad Babandede, maintained that the border closure was never intended to be in force within 28 days.

While commending the joint security operatives deployed for the enforcement of the policy, Ali said President Muhammadu Buhari had expressed satisfaction with the operations.

He said, “It was never meant to end at the end of the 28th day. As for planning purposes, we take it step by step. Phase one was when we put 28 days. The border drill has no definitive end but what we believe we want is to establish relationship with our neighbours and this relationship is mutual coexistence.

“So, we will keep this drill going on until we get to the point where we now sit down and agree on the basic things that will mutually benefit us and mutually enhance our coexistence and ensure that the protocols established by ECOWAS, not by Nigeria, are adhered to strictly.”

The joint-border security exercise code-named ‘Ex-Swift Response’, which was ordered by the Nigerian Government, commenced in August to secure Nigeria’s land and water borders.

Onslaught not targeted at any region, zone

Reacting to the development a retired Customs officer Mr. Chris Osunkwo said the onslaught on auto shops was a national operation across the country and not targeted at any particular region or zone.

Osunkwo said importers of vehicles have nothing to fear if they brought in their vehicles through approved routes and paid correct duties.

Border closure is ‘killing’ us

Reacting, a Tokunbo Motor dealer in Ilorin, Kwara state, Alhaji Yunus Abdulrahman, said the border closure is taking toll his business and his colleagues, adding that at the moment there is no display of cars for sale because of the fear that Customs operatives may seize them.

Abdulrahaman, who claimed his cars have Customs duty, lamented that his friends and colleagues’ cars have been seized and impounded by the Customs for not having the Customs duty.

Describing the border closure as killing, he called on the government to reopen it in order to save lives of many Nigerian dealers, who he said are now battling with stroke because of the development.

He said: “The border closure is killing us, our business is no longer moving because we can’t display our cars because of the fear that the Customs officers may seize them. As I am speaking, a lot of our members are suffering from stoke because their cars have been impounded.

“As I speak, I am battling a very severe headache because business is moving and if this continues in the next three months, a lot of lives may be lost to it.’’

On the way forward, Abdulrahaman called for the re-opening of the border, advocating that the price of the Customs should be reduced to allow Nigerians own.

“The way forward is for the government to re-open the closed borders and at the same time reduce the price of Customs duty which is between N400,000, N900, 000, N1 million, N1.5 million and N2 million. If this is not done, some Nigerians may not be able to afford cars in the nearest future,’’ he said.

‘Customs ruining our businesses’

Similarly, the Managing Director of an auto company located in Victoria Island, Lagos, who would not want his name nor company in print for fear of being victimized, wondered why the Customs was attacking their shops.

“The worst part of it is that they sealed our offices over the weekend without inviting or telling us why they are doing so. As I speak with you, we are confused. We pay our duties. They are ruining our business by their actions.

“How do they expect us to close shop under these harsh economic conditions?  Where do they expect us to go in this hard time?  We are appealing to government to carry us along and not intimidate us for an offence we did not commit.”

It’s wrong, unacceptabe

For the Managing Director of BKG Exhibitions, organisers of Abuja and Lagos Motor shows, Mr. Ifeanyi Agwu, “It is totally wrong, unacceptable and working against the economic policy of this government, which means there is no cohesion, because the government can’t be working against itself. “What they have done reverberate across the globe because car companies have sitting representations in Nigeria and they will report back. This will jeopardise solid investments like setting up auto plants. That is why countries like Ghana are taking advantage to encourage them to build assembly plants in their domain.

“Customers cannot wake up and go to the car companies and asked them to bring documents of cars that are already in their showrooms. We should be careful with what we do with some of these companies who do not tolerate the kind of acts that Customs are exhibiting.

“Besides, these companies have global standards for their dealerships all over the world. This is totally uncalled for, it is de-marketing Nigeria. The Presidency should wade into this and ensure that no agency of government jeopardises its efforts to revive the economy.”

Legislative storm over closure

The National Assembly was not left out in the backlash of Nigeria’s land border closure as some senators have criticised the decision on the grounds that it has further put pressure on the economy and deprived many Nigerians of their livelihood.

Senate Minority Leader Enyinnaya Abaribe, Senators Abba Moro, Gabriel Suswan and Sani Musa, among others, opposed the border closure.

Speaking during the debate on “The impact of border closure on the Nigerian economy,” sponsored by Senator Adamu Aliero and eight others, Moro, a former minister of interior, noted that there are 87 official borders and 1,900 unofficial borders around the country.

On his part, Suswan wondered why Nigeria signed trade agreements with other countries and thereafter closed its borders.

Abaribe said the implication of borders closure was that the Nigerian Customs Service, the Nigeria Immigration Service, National Boundary Commission, and the various military and security agencies failed in their responsibilities.

He urged the government to open discussions with neighbouring countries to control the movement of unauthorised persons in and out of the country.

According to him, the continued closure of the borders would further put serious pressure and suffering on the nation.

The Senate, however, resolved to support President Buhari’s decision. While adopting the prayers of the motion, which were put to a voice vote by Lawan, the Senate urged the ministries of Foreign Affairs and Interior to increase diplomatic outreach to the government of the Republic of Benin, Cameroun, Niger and Chad to take urgent measures to stop their domains from being used as base to perpetuate the illegal importation of unwanted goods into Nigeria.

 The Senate also enjoined the Nigeria Customs Service and the security services to intensify their role of curbing smuggling across the borders and pledged the support for their “onerous task of ridding Nigeria of smuggled goods and services.

The Senate reassured “friendly countries around the world that the border closure should not be perceived as a punitive measure targeted at them, but a necessary action to save our economy from collapse and protect our people from terrorism and insecurity.”

It directed its committees on Customs and Tariffs, Trade and Investment and Interior to assess the effectiveness of temporary closure of borders and recommend necessary sustainable solutions.

The Senate further urged a holistic “review of the country’s border control mechanism and also the empowerment of relevant government agencies to properly delineate Nigerian borders so as to effectively man same.”