Nigeria’s $3.2 billion customs modernisation programme is being adopted as a model for a much larger initiative aimed at digitising and connecting customs systems across Africa.
The Infrastructure Concession Regulatory Commission (ICRC) said Nigeria’s Customs Modernisation Project provided the foundation for the African Continental Free Trade Area’s planned $3.1 billion customs modernisation programme.
The development follows an agreement reached in July between the AfCFTA Secretariat and Bergmans Security Consultants and Supplies Limited, the Nigerian company behind the consortium implementing Nigeria’s customs modernisation programme. Under the agreement, Bergmans is expected to help develop the digital and physical infrastructure needed to connect customs administrations across participating African countries.
The project is considered important to AfCFTA’s goal of creating a more integrated African trading market. Many countries across the continent still operate different customs procedures, border systems and regulatory processes, making cross-border trade more difficult and expensive.
AfCFTA Secretary-General Wamkele Mene said the Secretariat studied Nigeria’s experience with customs digitisation before deciding to expand the model across the continent. The main goal is to create interoperability, allowing information submitted to customs authorities in one African country to interact more easily with systems in another.
Nigeria’s Comptroller-General of Customs, Adewale Adeniyi, previously highlighted this ambition using trade between Ghana and Nigeria as an example. He said customs declarations made in Ghana should eventually be capable of interacting with Nigeria’s customs system.
Nigeria’s own customs modernisation project dates back to May 2022, when the country signed a 20-year public-private partnership concession with Trade Modernisation Project Limited under the supervision of the ICRC.
The project was designed to attract about $3.2 billion in investment to automate customs operations. Huawei Technologies was named as a technical partner, while the Africa Finance Corporation served as the lead financier when the agreement was signed. Nigerian authorities initially projected that the programme could generate more than $176 billion in revenue for the government over its 20-year lifespan, while later projections from the concessionaire placed the potential revenue above $200 billion.
Nigeria has also been replacing parts of its older customs infrastructure with B’Odogwu, its Unified Customs Management System. The Nigeria Customs Service says the platform is designed to simplify trade processing, improve transparency and bring approved customs services together digitally.
The government has linked customs digitisation to increased collections by the Nigeria Customs Service, although factors such as exchange-rate movements, changes in import duties and other economic reforms have also contributed to higher revenue.
For AfCFTA, the challenge goes beyond increasing customs revenue. The agreement aims to create a single African market serving about 1.4 billion people, but differences in customs procedures, border delays, documentation requirements, infrastructure gaps and other trade barriers continue to make commerce across African borders difficult.
A continent-wide customs system capable of working across national borders could therefore become an important part of AfCFTA’s infrastructure if participating countries can successfully integrate their systems.
The initiative is also significant because a Nigerian company has been given a central role instead of one of the major international customs technology providers. ICRC Director-General Jobson Ewalefoh said the development showed that Nigerian public-private partnership projects could eventually produce services that can be exported to other African countries.
However, implementing the project will not be easy. Connecting numerous sovereign customs administrations, each with different technologies, regulations and institutional capacities, will be considerably more complicated than modernising the customs system of a single country.
If successfully implemented, Nigeria’s customs modernisation programme could become an important part of the digital infrastructure supporting AfCFTA and making cross-border trade across Africa faster and more efficient.
