The Nigeria Customs Service is unarguably one of the nation’s biggest revenue earners. In fact, available statistics show that revenue generated by the Service is second only to earnings accruing to the federation account from the oil sector. In 2006, the Nigeria Customs remitted nearly N200 b into federal government coffers. This year, preliminary estimates envisage that the figure would be more than that.
However, an extensive investigation by TELL indicate that huge as it seems, the revenue declared by the Customs every year is not anywhere near the actual amount generated and that a large percentage of the money ends up in the private pockets. Customs offices,high and low, it was discovered, collude with customs agents and importers and exporters to defraud the government of a huge chunk of the monies that should go into the federation account. This is done by several fraudulent and underhand schemes including the release of goods and containers without examination or payment of duties to appropriate official quarters,illegal release or sale of seized contraband goods,including textile materials, non utilisation of Clean Report of Inspection, non collection of Value Added Tax, VAT, fraudulent manipulation of government import waivers and concessions and illegal charging of fees on non dutiable items.
Several petitions have been written to the presidency,the Economic and Financial Crimes Commission, EFCC, the Independent Corrupt Practices and other Related Offences Commission, ICPC, and the minister of finance exposing the corrupt ways of Customs men. The magazine gathered that the ICPC has already commenced a big
investigation of the Customs and is, in fact, atloggerheads with Buba Gyang, the Comptroller General of Customs, CGC, who is accused of trying to frustrate the commission’s investigation.
But more alarming is the magazine’s discovery that the United States Department of Justice, DOJ, has launched investigations into shady deals involving some American companies, the Nigerian Customs Service and some Nigerian customs agents. Specifically, the department is probing alleged bribes paid by the American companies working in the oil sector in Nigerians to customs agents ostensibly in league with Nigerian customs officials. The probe concerns bribes allegedly paid by the companies to secure Temporary Import Permits, TIPs, to ship into the country oil rigs and drilling equipment used in the up stream sector of the petroleum industry.
The companies are usually allowed to bring in the equipment for specified periods but they are not treated as normal imports as the equipment are usually shipped back to the originating country after use in Nigeria. Therefore only some administrative fees are expected to be paid. However, it is alleged that customs officials manipulate the process and use customs agents to demand bribes sometimes amounting to $80,000. No receipts are given for such transactions as the money is never remitted into government coffers. Initially, Panalpina, a major player in the maritime sector was the only company mentioned in these deals, but the DOJ is said to have launched a probe after establishing that many more American companies are involved. The TIP unreceipted payments, if proved would violate American trade practice and the Foreign Corrupt Practices Act.
An e – mail sent by the magazine to the DOJ requesting for details of the probe is yet unreplied but it was learnt that some of the affected companies which have been notified about the probe have petitioned the minister of finance. In the petition, the companies, including Tidewater Marine Services, Global Pipelines Plus and Noble Drilling Company, confirmed that they had been made to pay fees to customs agents. They alleged that the Customs had provided them with no legal or regulatory requirements to follow and that they are made to go through unnecessarily tedious processes which force them to pay the fees which are unreceipted. They asked the finance minister to intervene and stop the practice as the DOJ had threatened to deal with any company found to have been involved in such payments. Gyang has always maintained that he is not aware of any probe by the American agency.
But the DOJ probe pales into insignificance compared to the investigations into allegations of corruptions. And if Gyang claims that he knows nothing about the former, he cannot say the same of the ICPC investigation as there is even evidence that he has, indeed, tried to stall it. The commission is investigating several petitions by retired and serving Customs offices and a body that claims to represent junior workers in the Service, alleging corrupt acts against senior officers including Gyang himself.
Sources at the ICPC allege that Gyang has done everything to frustrate the investigation. For example, a few months after the investigation commenced, the Customs boss allegedly put pressure on Sunday Ehindero, the Inspector General of Police, IGP,to withdraw the two policemen in the commission’s investigating team, Jide Kolawole and Adeyanju Ajayi.
Furthermore, after receiving a letter from the commission dated July 11, 2007 intimating him of the investigation and requesting cooperation from his men, Gyang specifically directed his men not to talk to or provide anybody from the commission with any assistance. This was the shocking find by the investigating team when wrote the comptroller, Lighter Terminal requesting for a list of seized containers.
Y.H. Kila, the comptroller told the investigators that he had received an order from the Comptroller General’s office directing his men not to respond to any request from the ICPC. Adamu Rabiu, Customs zonal coordinator for Lagos and A.J. Atte, Comptroller, Apapa Area Command, gave the same excuse for not cooperating with investigators. The magazine learnt that this order was given through a radio message signed by Sani Nuhu Abubakar, Assistant Comptroller General, ACG, Headquarters to all Customs commands.
The commission is investigating several petitions.Two, by Doni Odwong and Mathew Shelleng, specifically allege that the Gyang has run a corrupt administration and has creamed off millions of naira off Custom funds through the inflation of contracts. These contracts include the construction of boreholes in Customs formations across the country, purchase of generating sets, the building of a Customs Academy and a headquarters for the service in Abuja. They also include contracts for the purchase of patrol boats and arms and ammunitions.
The CGC awarded contract for construction of boreholes for sums ranging between N10m and M18m. For instance,while the boreholes for the Customs staff college,
Gwagwalada, cost N10, 629, 675, the one for Customs barracks, Banki, Borno State cost N18, 772,807.20.
Constructing the most sophisticated borehole, experts say should not cost more than a million naira. Similarly, the Customs boss also approved the purchase of generator for between N5m (60KVA) and N27m (500KVA). A very good brand of 500KVA, the magazine’s investigations showed cost about N3m.
The petitioners alleged that 25 % of the contract sum for the N780m for the construction of a Customs Staff Academy has been paid as mobilisation but no
appreciable work has been done on the site. In the same vein, it is also alleged that while the contractor handling the N3.2b Customs headquarters contract has been mobilised, he has abandoned the project. A visit to the site by the magazine showed that the site for the headquarters along Airport road, Abuja has only been cleared.
It was equally alleged that the CGC also inflated the contracts for the purchase of patrol boats for the Service. Four patrol boats and two ocean - going vessels meant for anti – smuggling activities were allegedly bought for $6. The market price for the boats is said to be actually about $400,000.
Besides this, Gyang is also accused of misappropriating funds through the bogus employment of consultants contrary to government directive.
Observing that a federal government circular dated January 28, 2005 prohibited the use of consultants by ministries and agencies, the petitioners accused Gyang of using consultants illegally, claiming to have paid them a total of N594, 596,711.60. Many of the consultants were employed in building construction projects.
Also, the Customs is alleged to have awarded contract for the supply of AK 47 rifles to the Service for N120 while another contract was awarded for the supply of other arms and ammunitions. However, the petitioners say no such items were bought and none can be found in the Service’s armoury.
When the magazine approached the Customs management to react to the contract award allegations and other issues, Wale Adeniyi, the Customs Public Relations
Officer, PRO, said the issues were beyond his portfolio. He said that the Service was aware of the petitions and the ICPC investigations but added that they were the handiwork of people who were disgruntled about the reforms being implemented by Gyang in the Customs. Adeniyi observed that there were a lot of unpatriotic people who had benefited from the corrupt system that the CGC was reforming and that they were fighting him so that business can continue as usual.
Adeniyi, however brokered a meeting between the magazine and ACG Abubakar who is in charge of operations at the Customs headquarters. Abubakar was provided with a list of the areas and issues that the magazine wanted the Customs management to address. The magazine also requested an interview with Gyang. While promising to fix an appointment with the CGC, Abubakar attempted to deal with some of the allegations. On the allegation of inflation of borehole contracts, Abubakar explained that the terrain of the site where the boreholes were sited and similar considerations
led to the high cost. He said that in some places, particularly in the North where water is deeper below the earth, special equipment is needed to drill and such equipment had to be mobilised from wherever they could be obtained. He denied any knowledge of any patrol boat contract awarded by the Customs, adding that the boats that were used by the Service were donated to it as part of a special equipped fund enjoyed by not only the Customs but also the Nigerian Navy and others.
Abubakar also defended the use of consultants by the Customs. According to him the Customs management is not aware of any circular precluding government agencies from employing consultants and that consultants are only used for jobs that cannot be handled internally. There are, however, graver allegations against the Customs management than the inflation of contracts.
One of the allegations being investigated by the ICPC concerns the manipulation of import waivers and concessions given out to importers in sectors where the governments want to encourage investors to explore and grow. Some petitioners claim that such waivers are manipulated by customs officials in collusion with
customs agents and officials of the federal ministry of finance to aide the importation of contraband goods. For example, one petitioner allege that foreign exotic furniture which are on the prohibition list continue to flood Nigeria markets because customs
officials manipulate waivers given to state governments, government agencies and religious bodies in such a way that such items are brought in as goods covered by government waivers.
A retired customs officer, A.A. Atiku, last year petitioned the presidency and ICPC, complaining, among other things, that the waivers are fraudulently manipulated by Customs men. In support of his claim, Atiku gave the example of an import concession given to the Kebbi State government in 2004 to import borehole drilling rigs, submersible pumps and related equipment duty free. Atiku alleged that a deputy
controller general who is friendly with some officials of the Kebbi State government connived with others to include in the state’s import waiver a large consignment of iron rods. Somehow, the EFCC got wind of the swindle and Nuhu Ribadu, its chairman, on October 25, 2004 wrote the CGC requesting him to investigate the matter. In the letter, Ribadu said that the transaction may have been fraudulent stated “You are requested to recover the full revenue loss and advice the commission accordingly”.
The investigation which Gyang ordered determined that the consignment was concrete reinforced twisted steel rods and that they “ are too far away from being used in
construction of any type of RIG…” The report of the investigation recommended that duty lost on the consignment be recovered and a debit note of close to a billion naira raised against Joma Contracts Ltd.
However, the magazine learnt that that sum has not been paid till date. Abubakar told the magazine that the money cannot be recovered from the importer because he had all the necessary papers exempting him from paying duties.That import waivers and concessions became a huge racket for many people is no longer in doubt. On August 23, Shamsideen Usman, the minister of finance announced the suspension of new waivers and the review of existing ones alleging that government had discovered a huge fraud in the implementation of the waivers which had cost government great losses. On September 27, at the inauguration of auditors and a committee on the review of government waivers, concessions and other incentives led by Senator Udoma Udo Udoma, Usman disclosed that the government had gotten some evidence of fraudulent manipulation of the waivers and
that investigations had commenced to
determine the perpetrators.
However, in defence of the Customs, sources in the service absolved it of complicity in the waiver racket, observing that it was actually the Customs that first complained about to the minister. Usman confirmed this when he said that it was Gyang that
first complained to him about the indiscriminate approval of waivers which was hampering effective performance of the duties of customs men at the ports and airports. It is said that implementing the waivers and concessions had become a big problem to the Customs as many of the approvals run contrary to
Some Customs sources laid the blame at the doorstep of former president Olusegun Obasanjo who allegedly gavewaivers, even on banned items such as furniture, indiscriminately as political patronage. Atiku, in his petition, made other damning though revealing allegations. He alleged that “ The men at the helm of affairs in the Nigeria Customs Service Headquarters and their cronies in the area commands have systematically been looting the economy and milking it dry through their fraudulent activities.”
He added that these “ take the form of illegal release of containers and other imported goods without duty payment and without any form of physical examination”.
As a serving officer, Atiku said he commissioned one of his subordinates to record such illegal releases which between November 2004 and March 2005, totalled 716 containers. He attached documents of the release of the containers to his petition to the ICPC and a copy was obtained. He further alleged that S.N. Argungu, former comptroller, Customs Intelligence Unit reported to the CGC that on March 14, 2005, 41 containers were released at the Apapa Port without examination or any duty paid and that further investigation revealed that 200 containers were actually so released on the said day.
The petitioner alleged that no one was punished because the perpetrators were cronies of the CGC. The government and people suffer double jeopardy by such unpatriotic acts. First, the country losses enormous resources that would have been paid as duties. But more significantly, dangerous things like arms and ammunitions might find their way into the country. But for the greedy officials, personal aggrandisement overrides considerations of national interest or security.
However, perhaps, the biggest racket operated by men of the Customs the auctioning of seized contraband and overtime cargo. It was gathered that about two years ago, as a strategy to decongest the ports which were busting with overtime cargo, the federal government decided to auction all overtime cargo in Nigerian ports. A committee headed by Abiye Sekibo, then minister of transport was set up to see to the decongestion process. It was discovered that many of the overtime cargo were textile materials.
However, by law, all textile materials in Nigeria are expected to be destroyed by burning. But greedy customs men defied the regulations and turned the illegal auction
into a money - making racket. Whereas tonnes of textile materials were destroyed in ports in the South western part of the country, several containers of textile were auctioned in ports in the South east as non – prohibited items. Fifty six containers of
textiles were allegedly so auctioned at the Warri, Port Harcourt and Calabar ports. But the burble burst, when some of the containers were intercepted by eagle – eyed customs officers in the South east.
Scrutiny of the documents of the cargo revealed that the textile materials had been auctioned to fictitious people as non prohibited items. The documents, which are in the possession of the magazine, showed that two of the containers were sold as PVC sheetings, sports shoes and zippers. However, the names and addresses of the recipients have been found to be false. However, it is alleged that rather than deal with the officers who perpetrated the fraud, nothing was done to them.
Rather, the CGC allegedly ordered the transfer of the patriotic officers who intercepted the containers from their commands. The insinuation is that the CGC was in the know concerning the illegal auctions. One officer told the magazine that in order to make the fraudulent auction scheme work, many of the textile overtime cargo discovered in the Lagos ports were diverted to the South south as it would hav been difficult to dispose of them in Lagos.
But the Lagos ports have also had their own share of irregular release of contraband goods. Atiku in his petition to the ICPC alleged that one Andy Shalom illegally imported and, with the connivance some customs men, cleared 28 containers of textile from the Apapa port, Lagos, on February 14, 2005. The investigation unit of the Customs at the Abuja headquarters got wind of the deal and dispatched a comptroller, Abdullahi Dikko to investigate the matter. Atiku alleged that A. Fadahunsi, ACG, Enforcement, told Dikko to leave the matter because “the big oga in Abuja” knew about it. Dikko is said to have returned to Abuja without investigating the matter . But he is said to have written a memo to the CGC detailing exactly what transpired but nothing was allegedly done by Gyang.
So bad has the situation that the government policy to ban on importation of textile materials, which is meant to protect local textile industries has been successfully circumvented. Importers allegedly freely bring in textile as long as they can grease the palms of top Customs bosses. Even when such consignments are seized by “overzealous officers”, the importers know that they can get them released for a fee.
As if acting under official cover, officers found to have perpetrated corrupt acts are not disciplined. Atiku alleged that in late 2004, the area comptroller of Kebbi/ Sokoto/ Zamfara command of the customs seized and later illegally released 22 trucks of textiles. However, the trucks were intercepted in Kogi state . Till date the area commander has not even been queried. Another aspect of fraud raised by Atiku in his petition to the ICPC is the non utilisation of CRIs. These were used in the days of pre – shipment inspectors and were issued by government appointed pre shipment inspectors who evaluate payable duty on goods
after examination. However, it is alleged that billions of naira worth of underutilized CRIs lie with the Customs uncollected creating huge losses of revenue for government. In The petitioner’s estimation trillions of naira must have been lost. He disclosed that in April 2004 by A.R. Adamu who was then Area Commander, Murtala Mohammed International Airport Command compiled a list of unutilised CRIs and discovered that at the end of 2003, there was N2.2B worth of unutilised CRIs. Adamu reportedly made his findings known to the CGC via a memo dated August 6, 2004 with copies of the CRIs attached. However, to the shock of many officers, he was promptly transferred from the command.
Atiku alleged that he too received the same treatment from Gyang for acting patriotically to stop corrupt practices in the Customs. According to him, in order
to stem the incidence of release of goods without examination or payment of duties, particularly through bonded terminals, he, as zonal coordinator of Customs in the Lagos area set up a monitoring team. Bonded terminals are another creation of government aimed at ports decongestion. The idea was to move some of the
containers from the ports to terminals where they would then be cleared after going through due procedures.
Atiku alleged that on the very first day that the monitoring team went to work, it intercepted 30 containers illegally moved from the Apapa ports with the aim of releasing them through a bonded terminal. The transfer was not officially sanctioned because it was not manifested as consigned to the bonded terminal. It was later discovered that the containers contained tomato puree which attract 100n % import duty instead of the auto spare parts it was declared to be carrying which has a 15% duty .
Also, Atiku said he found out that documents presented by the imported, including duty payment papers, were fake so he ordered the containers seized. He thought he had done a good job. But he was soon called to the Customs headquarters, queried and then transferred out of Lagos. Gyang got approval for Atiku’s dismissal in
The ICPC investigations have so far been stalled as officials of the commission continue to meet with frustrations in the hands of Customs men. Not even an appearance before the ICPC has helped matters. Gyang finally honoured an invitation by the commission in August where he was reportedly questioned over some of the allegations. ICPC sources informed the magazine last week that the investigations are still going onand that even now a lot of revelations have been discovered concerning corruption in the Customs.
Last year, the magazine learnt that Nenadi Usman, then finance minister, after receiving many petitions against the Customs boss, in a memo dated July 31,
2006, requested that Gyang give an account of his stewardship. Specifically, the minister asked for a “status report on the implementation of the approved reform programme” as well as “ total funds released to the Service from the Federation Account as 7 % Cost of Collection…” and “ total funds utilised( stating the projects in detail) from the month of commencement to date”.
The minister was not satisfied with the CGC’S response and on September 4, 2006 demanded details of revenue “from auction/ sale of seized goods”. She also ordered
the suspension of further auction of seized goods. As at the time of going to press, neither Adeniyi nor Abubakar had been able to fix an interview with Gyang.
This is after a three – week wait. In fact, the promise of cooperating with the magazine and helping out by providing access to some Customs commands, document and other materials were not met.
However, in addressing some of the issues, Abubakar presented a background into the policy to decongest the ports. He said that the committee that made recommendations on the issue was not made up of Customs alone but also included agencies such as finance ministry, Nigeria Ports Authority, National Drug Law Enforcement Agency, NDLEA, the presidency, Nigeria Police Force, transport ministry, National Food and Drug Administration Council, NAFDAC and so
on. He equally said that many of the agencies were involved in the disposal of the auctioned goods.
On the issue of illegal release of goods, particularly contraband such as textile, he stated that every seizure made around the country was made by customs men, pointing out that there was no concerted plan by the Customs hierarchy to allow banned goods into the country. He explained that the containers that were seized in Kogi had no documentation as the drivers of the trailers carrying the goods had run away and so no one could be accused of their release. Abubakar said it was not true that officers caught in the act have not been punished, explaining that many officers caught perpetrating fraudulent acts have been disciplined with some of them dismissed. He said only recently, about 40 officers were so dismissed.
He also explained that the query given to Atiku, which eventually led to his sack, was due to the former ACG’s insubordination. He is said to have set up a task force contrary to Gyang’s directive that all such task forces be dismantled to pave way for the command structure that had been introduced.