By Gowon Omale
Since Nigeria returned to Democracy, some projects presented and approved by FEC had to be cancelled because of facts that later emerged showing flaws in the process or lack of value for money. Successive governments have always talked about increasing debts, falling sales of crude oil, lack of liquidity to fund important projects yet we spend a lot on frivolous projects that are not adding tangible value to the economy except, in the minds of those that concieved them.
We had the Air Nigeria saga, the bullet proof cars and the second Abuja runway project which was to cost over $40 million dollars than a brand new airport with two runways and taxi way of same length, and other brand new facilities that was being built in an Asian Country around the same time. We’ve also had a case in 2011 when Nigeria spent over N1.5 Trillion ($11.96 Billion using N153 to $1 rate of 2011) on fuel subsidy. These and other allegations of financial misconducts in huge sums of dollars ranging in billions and the people involved usually just get a pat on the back, and in some cases resurface with another portfolio.
In some of the aforementioned cases, the FEC had to renege on its approvals and steered a new course of action. In all the cases, the Presidency had no hand in it, and the spacialists we expend so much estacodes training abroad were unable to discover the faux paux, thereby misleading their principals to present a shody proposal to the FEC. It’s about time we start expending our money on tangible legacy projects that will not only alleviate the poverty level in Nigeria, but place the nation as an ICON in Africa.
We have the human, capital, intellectual potentials to achieve this, and at the moment, a noble leader like President Buhari that can implement such projects, given the right counsel and advise. The article is a bit lengthy so is the quantum of cash that is being analysed.
Now on the $3.1 Billion for the Customs Process Automation.
The day Hajia Zainab Ahmed presented the $3.1 Billion Request to FEC for approval, I thought she made a mistake which would be noticed and later corrected. But Alas, such was not the case, I became restless since that day, and thought within myself: not again. There is need for us to critically examine the project, because it would further endorse a wrong pattern running the nation aground. Nonetheless, before coming to conclusions, let’s examine some facts about $3.1 Billion for the project.
Value for Money: Highlighted below are the value Nigeria can get for the $3.1 Billion dollar approved by FEC for Automation of Nigeria Customs Services.
Assembly Plant: Volkswagen’s opened a small Assembly Plant in Rwanda in 2018 with a $20 million dollar investment. This implies that $3.1 Billion will build about 147 of such in Nigeria. See links below:
Toyota Assembly Plant:
Toyota planned to spend about $1 Billion to build a new Assembly Plant in Mexico that will employ more than a thousand people and produce 200,000 cars a year. This implies $3.1 Billion can build 3 of this plant with $100 million left.
Ford Manufacturing Plant:
Ford planned to build a Mega Car Manufacturing Plant in Mexico for $1.6 Billion in 2018 that will employ more than 2800. This implies $3.1 Billion will build two of this plant, with another $100 million added.
Mega Car Manufacturing Plant:
South Africa planned spending $819 million on a Mega Car Manufacturing Plant in 2016 to be funded by a Chinese Company.
A320 Neo – $118.3 Million
A330-800 Neo – $259.9 Million
A350-900 – $317.4 Million
We can have a new airline with nine A320 Neo, four A330-800 Neo and three A350-900, and still have $43.5 Million left.
Boeing 737-700 – $88.1 Million
Boeing 787-8 – $248.3 Million
Boeing 777-200 – $306.6 Million
We can start a new airline with 13 Boeing 737-700, four Boeing 787-8 and three Boeing 777-200ER and still have $28.7 Million left with $3.1 Billion.
The cheaper alternative of Embraer has not even been considered that would probably double the Boeing option. If we go into housing, the amount will give us 155,000 units of bungalows at N7.5 million per Unit and more than 1.5 million Nigerians can be engaged assuming 10 people are involved in constructing one building.
The above are Legacy projects we can embark on for the nation. With proper negotiations, the nation can get these companies to invest in these projects which will be evident to all, instead of a Customs Automation process that is virtual. Moreover, there is an existing state of the art Software and other hardware/equipment which are being used by several Nations… with commendable results. You may have other projects in mind that you can juxtapose the figures to compare with the value of “Automation”.
The Honourable Minister of Finance and the Government have been hammering so much on the debt the country is owing. The Minister informed the FEC that the Project would be financed by the Conglomerate and Nigeria does not have to provide funds immediately. It’s like a man going to a car lot advertising that “drive away a car for free and pay later”. The moment the man signs and drives away the car he becomes a debtor and, if for any reason, he is unable to pay, it becomes another story.
Likewise on the Customs Automation project, whether financed or not, as soon as the contract is signed, the fact is that it becomes a public debt that has to be settled, which only results in increasing Nigeria’s debt profile. A lot of agencies have gotten the country indebted over the years through initiatives like this.
Contravention of the Procurement Act 2007:
The proposed Customs Implementation violates the procurement law. Section 16 sub Section I sub sub section (b) states that “based only on procurement plans supported by prior budgetary
appropriations and “no procurement proceedings shall be formalized until the procuring entity has ensured that funds are available to meet the obligations” and subject to the threshold in the regulations made by the Bureau”
In this case, the Nigeria Customs Service does not have the funds, hence, going into the project as it is, violates the Act, unless it is being implemented as a loan which must pass through due process in accordance with the Laws of the Federation.
Existing Automation Capability:
The NCS currently has an existing Software ASYCUDA++ with Full Process Automation used by over 92 Countries with commendable results.
Info Link: https://customs.gov.ng/?page_id=3167
Link to ASYCUDA: https://asycuda.org/en/
Before going into a new product, it is important to know the shortcomings of the existing platform and how the new product intends addressing the identified shortcomings. There must be a clear demonstration of the new product to everyone if it really exists and that it can address the limitations with the old. If it is just conceptual, then, there is no guarantee it will work and would end up being a white whale project (you can see the carcass of a dead elephant but a dead whale remains buried in the sea).
A $3.1 Billion concept is too expensive an adventure for Nigeria in its current state.
Moreover, someone needs to tell the Minister that it is the human beings that are mostly the problem in our system and not the tools being used. The right tools in wrong hands with wrong motives is still ineffective and would be frustrated.
Fact Check on the Product:
The Product may not exist at the moment and may just be an integration of different hardware and a Software to be developed. Otherwise, let the Minister tell us details of the Equipment and Software for the subject “Full Automation” and Countries where it is currently being used. It would be necessary to carry out an appraisal of those implementations, if any, to ensure it is robust enough to address the supposed challenge. Nigeria cannot afford to be a $3.1 Billion dollar Guinea Pig.
Fact Checks on the Parties Involved:
Messrs E. Customs HC Project Limited:
A check on the Internet revealed that Messrs E. Customs HC Project Limited does not exist. The only results available online are the Online Newspapers reporting the FEC meeting and reflected the name of the Company as part of the Ministers presentation. We need to know what other projects this ‘”Conglomerate” has executed in the past, before Nigeria becomes indebted to the tune of $3.1 Billion.
We also checked on the Company in the BPP search engine and no record of the Company was found as at today. We know someone might be smart after reading this article to claim there was an engine error or some funny stories. Search engine is fine because other genuinely registered companies have credible results on the portal.
Bionica Technologies West Africa Limited:
The Company is registered with CAC. Reg No is 90893.
Search on BPP Website (https://federalcontractors.bpp.gov.ng/#/search) indicates no record found. Again, a smart alec will probably come up with the story that BPP Website had a problem. How did company get Due Process No Objection Certificate?
No credible information on the company after an online check. Results for the company was generally only three (Sites with related info considered as one):
www.dnb.com pulled up something on the Company. Gave company address as: BIONICA, 2B Batna Close, Off Agadez Street, Off Aminu Kano, Crescent, Abuja FCT Nigeria. This had two contacts with no phone numbers.
www.manpower.com.ng puts company address as Address: Plt 1678 Olukunle Bakare Close Victoria Island. No phone numbers or contact person.
Visit to websites with Company’s domain name showed error/not available or under maintenance. This is a usual gimmick for upcoming companies who try to put up a front.
Another link in ICIJ Website reported a Company with same name was registered in British Virgin Island incorporated 22 October 2004 was struck off on 30 April 2008 and finally deactivated on 2 May 2008, having defaulted. Company’s Agent was Mosac Fonseca as reported in the Panama Papers (https://offshoreleaks.icij.org/nodes/10110048). You may wish to conduct a search on the personality of Mosac Fonseca yourself.
Can Nigeria really commit $3.1 Billion project to a company like this?
Bargain Securities and Supplies Nigeria Limited:
Company not found in CAC Registration or BPP Portal
No information about this Company online except for online news on the contract award. Also a search on BPP website. No record found. Not even a website.
Mmmmm. This is now becoming interesting…..
African Finance Corporation (AFC) has some credible information on it.
Huawei as we all know is a Chinese Company that does exist.
In conclusion. Somebody has not done his/her work well in considering this so called “Conglomerate” for $3.1 Billion project for Nigeria. We believe the father of the nation will not allow this to go through. Just like Obasanjo withdrew from the Air Nigeria project, Jonathan withdrew from the second Abuja Runway project, Nigerians are sitting down to watch what will happen.
Secondly, all the projects being presented for approval because of this great faux pas on the so called Customs Automation needs to be scrutinised, including the N19 billion approved for “Aviation Automation” in the FEC. Thirdly, what Nigeria needs are not sharks but men and women of sound mind who can sense a fraud even before the proposers complete their presentation.
In this matter, it appears some very top government officials have been deceived and sweet talked, and in turn (giving a benefit of doubt) misled the FEC. A nation struggling to pay minimum wage and complaining of dwindling income and need to diversify should not even be contemplating spending $3.1 Billion frivolously. It’s like a man who owns a 2-year old Mercedes that is struggling to pay his childrens fee and provide for his family, and suddenly wants to buy a Ferrari on Credit because the Benz is slow. Meanwhile, he cannot even drive the Ferrari in his neighbourhood because the roads are bad.
In all of these, we may be wrong; but we invite the sponsors and approving authorities, including the NCS, Federal Ministry of Finance, or even the FEC to prove this article wrong. We are waiting.
God bless Nigeria and our President.
▪︎ Omale, a businessman, sent this material via e-mail from Onitsha, Anambra State