The Nigeria Customs Service (NCS) recently launched the Authorised Economic Operator (AEO) to facilitate trade and ensure quick turnaround of cargoes at the seaports and clearance of goods at the ports.
Over the years, the World Customs Organization (WCO) believed that the physical presence of Customs administrators at the gateway to a country means that compliance checks would be conducted before a decision is made to release a consignment of goods into the country.
WCO argued that the physical presence of Customs administrators not only acts as a deterrent to would-be fraudsters but also ensures that only permissible goods are allowed into a country.
This notwithstanding, the WCO has also noted that where Customs administrators carry out excessive and time-consuming checks at the point of clearance, the process becomes counterproductive. Consequently, many Customs administrators are currently choosing to concentrate their controls on post-import and export entry checks.
Against this background, the Nigeria Customs Service recently launched the Authorised Economic Operator (AEO) programme and strengthened its Post Clearance Audit administration in Nigeria.
This follows the enactment of the Nigeria Customs Service Act, 2023 and several stakeholder engagements including engagements with the WCO.
The AEO programme is a scheme used by Customs administrations to encourage Economic Operators (EOs) to achieve a high level of compliance with the extant Customs rules as well as increase the adoption of safety and security standards in exchange for benefits that tend to improve the supply chain efficiency of EOs i.e., cheaper, quicker, and smoother clearance of goods.
Speaking at the launch of the AEO, the Comptroller General of Customs, Adewale Adeniyi, who announced that the AEO registration portal would open on February 17 for eligible companies, disclosed that AEO-certified companies were achieving an average release time of 43 hours – surpassing our target by 5 hours.
The Customs boss highlighted the remarkable success of the pilot phase, noting that the collective trade value of the six participating companies increased from N185.8 billion in 2023 to N563.8 billion in 2024.
He said Customs revenue generated from the companies also increased significantly, rising from N 18.4 billion in 2023 to NGN 51.1 billion in 2024, contributing to NCS’s overall revenue growth from NGN 3.2 trillion in 2023 to NGN 6.1 trillion in 2024.
Speaking on the programme’s impact on operational efficiency, Adeniyi said, “We set an ambitious target to reduce clearance time from 168 hours to 48 hours. By December 31st, 2024, our AEO-certified companies were achieving an average release time of 43 hours – surpassing our target by 5 hours.
“This represents a remarkable 66.9% reduction in cargo clearance time compared to the pre-AEO status of 5 days and significantly outperforms the 7-day clearance period required for regular Economic Operators (EOS).”
Adeniyi outlined the key benefits of the AEO programme, including accelerated customs clearance processes, a substantial reduction in physical inspections, priority treatment in customs processes, enhanced predictability in supply chain operations, and measurable cost efficiencies.
He revealed that the pilot companies achieved cost savings exceeding N100 million within a quarter.
“The true measure of this partnership’s success is beyond the metrics; it is in the quality of relationships we are building. One compelling example is how our AEO partners have embraced the principle of self-regulation. Recently, one of our pilot beneficiaries demonstrated exceptional integrity by voluntarily disclosing an underpayment of duty amounting to several millions of naira. This level of trust and transparency where partners self-audit and bring oversights to our attention – exemplifies the essence of the AEO programme, ” he said.
Adeniyi said through these successes, Nigeria is positioning itself as a reliable, predictable, and competitive trading partner, aligning with President Bola Ahmed Tinubu’s vision of achieving a $1 trillion economy by 2030.
“The AEO programme strategically complements the President’s 8-Point Agenda by supporting food security through faster clearance of agricultural inputs and machinery; contributing to economic growth through trade facilitation; creating jobs through expanded business opportunities; improving access to capital by reducing operational costs for businesses; and fighting corruption through enhanced transparency in customs processes.
“Furthermore, it reinforces the administration’s commitment to boosting non-oil exports, strengthening agricultural value chains, and improving the manufacturing sector’s competitiveness. This programme also supports the government’s focus on technological advancement and digital transformation of government services, while contributing to the Presidential initiative on Customs modernization,” he said.
Also speaking, the Executive Secretary of the Nigerian Shippers’ Council, Akutah Pius Ukeyima, commended the Comptroller General of Customs, Adewale Adeniyi, for introducing the AEO Program and other initiatives aimed at modernizing the customs service and facilitating trade in the country.
Dr. Akutah stated that the present administration is impressed with the contributions of the Customs Service to the nation’s economy.
In his remarks, the Comptroller General of Customs, Dr Adewale Adeniyi, described the newly introduced Authorized Economic Operators Program as a trade facilitation mechanism and a game-changer for Nigeria’s economy. According to him, the AEO Program will enhance competitiveness and reduce customs clearance time.
On his part, the Director General of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Charles Odii, expressed excitement about the program’s potential to benefit SMEs, noting that it could significantly reduce bottlenecks and improve their return on investment.
“Almost immediately, our small business owners would get a return on investment because AEO is now in operations today,” Odii stated. He highlighted the participation of Lelook Nigeria Limited and First-Class Refreshment Ltd as examples of how the program can empower small businesses.
“It’s a new day in Nigeria with the launch of the Single Window Initiative, with the launch of AEO, and with the reforms and policies that President Bola Ahmed Tinubu is putting in Nigeria today,” Odii added.
The President of the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dele Oye, stated that the organized private sector can generate the needed revenue for 2025 if given the right environment.
“The organised private sector represents 97% of the economy; if you tell us to cover the 13 trillion in this year’s budget, it would be through productivity. We cannot borrow ourselves out or increase taxes, but if you want us to, we can do it,” Oye said.
The Director-General of the Presidential Enabling Business Environment Council (PEBEC), Princess Zahrah Audu, affirmed that the AEO program aligns with PEBEC’s mandate and will enhance Nigeria’s trade competitiveness by simplifying customs processes for trusted businesses.
“We believe that the AEO is a significant step in ensuring our business is competitive and sustainable,” Audu stated.