The Nigeria Customs Service (NCS) has exceeded its 2024 revenue target, but experts warn that meeting its ambitious 2025 goal will be even more demanding.
In 2024, the NCS was tasked with generating ₦5.1 trillion as part of the government’s ₦18.2 trillion revenue projection. By November 15, Comptroller-General Adewale Adeniyi announced that the agency had already hit this target, with over a month remaining in the fiscal year. By the end of 2024, the NCS had collected ₦6.1 trillion, exceeding its goal by ₦1.03 trillion, marking a 90.4% increase from 2023’s ₦3.2 trillion revenue.
This performance highlights the agency’s critical role in Internally Generated Revenue (IGR), which is essential for implementing Nigeria’s budget and reducing national debt. However, the road ahead presents significant hurdles.
Modernization Efforts to Strengthen Revenue Collection
To boost efficiency, the NCS implemented several modernization initiatives in 2024, including:
- Authorised Economic Operators (AEO) Programme: A trade facilitation scheme aimed at improving customs efficiency and supply chain security, set for full launch on February 14, 2025.
- Advance Ruling System: A system that provides traders with binding decisions on goods classification, origin, and valuation before importation, promoting transparency.
- Time Release Study: An initiative to analyze operational efficiency and improve clearance processes.
- B’Odogwu Customs Management System: A homegrown software designed to automate trade operations, developed in collaboration with the Trade Modernisation Project Ltd.
Additionally, the NCS recorded 3,555 seizures in 2024, including wildlife items, arms, narcotics, and pharmaceuticals, with a total value of ₦28.46 billion and duties worth ₦6.83 billion.
Challenges Ahead: FX Volatility and Smuggling
Despite its successes, the NCS faced disruptions due to fluctuations in the foreign exchange (FX) rate, which altered 70 times in the first half of 2024 alone. This instability led to reduced importation, increased costs, and revenue uncertainty.
Experts warn that achieving the 2025 target of ₦6.58 trillion—a 9.8% increase from 2024—will require:
- Stabilizing the naira exchange rate to ensure predictable import costs.
- Addressing smuggling and corruption, which continue to undermine customs revenue.
- Enhancing stakeholder collaboration to improve compliance and streamline trade processes.
- Expanding revenue sources beyond traditional import duties.
2025 Budget and the Role of Customs
The 2025 budget proposal, themed “Budget of Restoration: Securing Peace, Rebuilding Prosperity,” sets a total expenditure of ₦49.7 trillion, with a revenue target of ₦36.35 trillion. The NCS, alongside agencies like the Federal Inland Revenue Service (FIRS) and NNPCL, is expected to play a crucial role in meeting this target.
However, economists such as David Ambi and Hassan Nezifi caution that these projections may be overly optimistic, especially if trade volumes decline or enforcement remains weak.
While economic recovery efforts, including duty-free food imports and tax reforms, may support revenue collection, stakeholders emphasize the need for balanced policies to prevent excessive taxation from stifling business growth.
As the government moves forward, the success of Nigeria’s revenue strategy will depend on customs modernization, economic stability, and strict anti-smuggling measures—all of which will be key to sustaining fiscal progress in 2025.
