Cablegate: Nigeria: Customs Cumbersome but Aviation Handling

VZCZCXRO1598
RR RUEHMA RUEHPA
DE RUEHOS #0768 3370603
ZNR UUUUU ZZH
R 030603Z DEC 07
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 9635
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 9381
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS LAGOS 000768

SIPDIS

SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY
SIPDIS

STATE FOR AF/W
TREASURY FOR DPETERS, RHALL, RABDULRAZAK
ENERGY FOR PERSON, GAY
COMMERCE FOR KBURRESS
STATE PASS USTR FOR LISER, AGAMA
STATE PASS TRANSPORTATION FOR KSAMPLE
STATE PASS OPIC FOR ZHAN, MSTUCKART, JEDWARDS
STATE PASS TDA FOR EEBONG, DSHUSTER
STATE PASS EXIM FOR JRICHTER
STATE PASS USAID FOR NFREEMAN, GBERTOLIN

E.O. 12958: N/A
TAGS: EAIR ECON EFIN EINV NI
SUBJECT: NIGERIA: CUSTOMS CUMBERSOME BUT AVIATION HANDLING
EXPANDING OPERATIONS

1. (SBU) Summary: Local logistics company executives said
internal Nigerian customs disputes contribute to the slow
pace of the customs clearance process. Despite the
cumbersome Nigerian customs process, the company is expanding
their operations at the local airport. End Summary.

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Conflict Between Customs Agencies Slows Process
--------------------------------------------- --

2. (SBU) Nigerian Aviation Handling Company (NAHco) CEO
Bates Sules and COO Kristof Henot met with EconCouns and
EconOff to discuss the state of Nigerian customs. They
described a divided customs service rife with tensions
between sub-agencies. The Federal Operations Unit (FOU) is
responsible for enforcing customs law and checking for
contraband, while the regular customs unit at the airport
handles duty and clearance processes. However, the FOU
regularly steps into the sister agency's territory. The
executives described a recent two-week-long freeze of all
cargo in the airport warehouses during which the FOU insisted
it had to screen the items for contraband, including
illegally imported textiles. The airport customs officials
in charge of clearing imported items were told to "step
back". In order to meet growing import demands, and support
existing export demands, customs reform is key, Sule and
Henot stated. Both stated that the length of time items
remain in customs has nothing to do with the handling
companies and is entirely up to the customs officials.

3. (SBU)Sule and Henot went on to describe the cumbersome
customs export process. In order to export items, an
organization must obtain clearance from four different
government agencies, including multiple physical screenings
of the items. This process is burdensome to businesses who
wish to export Nigerian products, as well as those who want
to temporarily export items for repair. Both in-bound and
out-bound items are screened by x-ray machines provided by
the U.S. Government.

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Paperless Process Would Ease Customs Burden
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4. (SBU) Sule said NAHCo would like to see the implementation
of a paperless process, similar to that recently started in
Ghana. While that transition was not an easy process, it is
now flowing well, Henot remarked, having helped with its
implementation. When asked by EconCouns whether there would
be any resistance on the part of Nigerian officials to
reforms, Sule opined that all Nigerian agencies want
modernization to go forward. (Comment: Post is skeptical;
many Nigerian officials have a personal financial interest in
keeping the process as burdensome as possible. End Comment.)

5. (U) NAHCo is expanding its cargo area to accommodate more
carriers, a sign of increasing non-oil economic activity.
Sule stated the company had seen a significant increase in
imports into the country. NAHCo handles about 50-60 percent
of incoming cargo.

6. (U) This cable has been coordinated with Embassy Abuja.

HUTCHINSON

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