Modernizing Nigeria’s Customs: Lessons from Ghana’s Transparent and Cost-Effective Model

The Nigerian Federal Government is currently being encouraged to rethink its customs funding framework by adopting a model similar to Ghana’s—one praised for its transparency, efficiency, and alignment with international trade standards. This call comes from the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), highlighting the urgent need to overhaul Nigeria’s customs system to promote competitiveness and growth.

Understanding Ghana’s Successful Customs Funding Approach

Ghana’s customs funding model has been hailed for its simplicity and effectiveness. It operates through a capped charge system where importers pay predictable fees tied to the value of goods, simplifying accountability and minimizing arbitrary costs. Specifically:

• Import inspection fees are capped at 2% of dutiable cost, insurance, and freight.

• Approximately 3% of total import duty and VAT collections fund customs operations.

• A portion of the funds supports advanced technology platforms to streamline customs processing.

• Enshrined in Ghana’s Export and Import (Amendment) Act 585 of 2000, this model ensures transparency and cost efficiency.

This structured approach has helped Ghana maintain competitive port fees, encourage trade compliance, and foster investor confidence.

The Challenges with Nigeria’s Current Customs System

Nigeria’s system, governed by the Nigeria Customs Service Act 2023, relies on multiple layers of fees—including a 4% Free-on-Board levy and various user and inspection charges. According to stakeholders:

• The existing complexity inflates the cost of customs clearance.

• Fees rank among the highest in West and Central Africa, impeding trade competitiveness.

• Overlapping agency mandates create inefficiencies and delays.

• High costs discourage investment and increase the financial burden on businesses.

Such challenges have made Nigerian ports less attractive, hindering the country’s ambition to become a regional trade hub.

Potential Benefits of Adopting Ghana’s Model

Transitioning to a funding system modeled after Ghana’s could unlock numerous advantages for Nigeria:

• Greater transparency would reduce arbitrary fees and corruption risks.

• Streamlined funding and operational structures could enhance efficiency.

• Lower customs fees would stimulate trade activities and attract investment.

• Improved compliance with global trade facilitation standards would support integration into international markets.

Moving Forward: A Call for Reform

The NCMDLCA has urged President Bola Tinubu to set up a dedicated committee to evaluate and realign Nigeria’s customs funding and inspection mechanisms. This review would aim to harmonize agency roles, reduce cost duplications, and simplify clearance procedures.

In doing so, Nigeria would take a significant step towards modernizing customs operations, fostering a competitive business environment, and improving its strategic position in West African and global trade.