Nigeria is the fourth largest economy in Africa. Given its market size and strategic location on the African continent, international trade plays a key role in its economy, and the country is home to a network of bustling ports, airports and border crossings. In recent years, the Nigerian Government has been committed to boosting non-oil exports, strengthening agricultural value chains and improving the competitiveness of its manufacturing sector. However, supply chain actors such as importers, exporters and carriers grapple with the high costs of doing business which are generated, in part, by burdensome Customs and port processes and controls.

Guided by the overarching objectives of creating an efficient and secure environment enabling legitimate trade to flourish, the Nigeria Customs Service (NCS) launched, on 14 February 2025, an Authorized Economic Operator (AEO) programme in line with the provisions of the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade.

The AEO programme will gradually replace the Fast Track Scheme (FTS) introduced in 2003, which was compliance-focused and open only to manufacturers, with the key benefit of allowing goods arriving in Nigeria to be immediately transferred to a trader’s premises under NCS escort.

Now, any operator involved in the supply chain can qualify for AEO status in Nigeria if it can demonstrate a proven record of compliance with Customs regulations, a capacity to secure facilities and operations, and adherence to strict standards of accounting, logistics and internal controls. In turn, AEOs benefit from a series of measures aimed at accelerating and facilitating cross-border operations. The cost savings and efficiency gains realized by our AEO-certified companies are expected to cascade down to consumers, contributing to reduced costs of goods and services nationwide.

The introduction of this new programme is accompanied by a fundamental strategic reorientation within the Customs Administration as it moves from traditional transaction-based control systems to a more sophisticated system of comprehensive compliance management.

One of the milestones of the project was the inauguration ceremony held on 2 August 2023 for the newly established AEO Steering Committee and AEO Technical Working Group. The event was marked by a sense of optimism and shared purpose, as participants recognized the programme’s potential to reshape Nigeria’s trade landscape.

Bringing together stakeholders from across government agencies, the private sector and international partners, the AEO Steering Committee was tasked with providing strategic direction and overseeing the programme implementation.

The AEO Technical Working Group, meanwhile, was responsible for managing the technical aspects of the programme, from the formulation of guidelines to the roll-out of necessary training and IT systems.

In its journey towards a fully-fledged AEO programme, the NCS benefited from the technical assistance of the WCO Accelerate Trade Facilitation Programme, which is funded by the United Kingdom’s His Majesty’s Revenue and Customs (HMRC) and is designed to help developing countries enhance their Customs capacity for the effective implementation of the WTO Trade Facilitation Agreement (TFA).

Activities included back-to-back AEO and post-clearance audit (PCA) diagnostics, on-site AEO validation training and remote working sessions during which the NCS received guidance on the development of an AEO operational manual. Study visits to the United Kingdom and South Africa were also organized, providing NCS officers with hands-on experience and practical knowledge on AEO programmes, PCA and risk management techniques for incorporation into its standard operating procedures (SOPs) and AEO operational manual. Among the practices that the NCS decided to replicate were the creation of an SME desk and the implementation of the voluntary disclosure compliance model.

On 15 April 2024, a pilot was launched to test the SOPs and the new working methods with Nigerian economic operators and to refine the operational aspects of the AEO framework before embarking on a full-scale roll-out.

Six companies, spanning various sectors of the Nigerian economy and selected for their compliance records, participated in the first phase of this pilot during which their eligibility for AEO status was assessed.

Two of the companies selected were SMEs, since the NCS wanted the AEO programme to be as inclusive as possible and to make SMEs aware of the need to further strengthen compliance and security practices. SMEs constitute a significant portion of Nigeria’s economic fabric, contributing a substantial 48% to the country’s GDP growth and employing 84% of Nigeria’s workforce, according to reports from the National Bureau of Statistics (NBS).

During the AEO Validation Training, WCO experts from the Customs Administrations of Brazil and Uganda, NCS AEO validators and representatives of the companies participating in the pilot assessed compliance and security-related risks and the effectiveness of mitigating measures. At the end of the validation process, all six companies were found to meet AEO requirements, including the two SMEs.

The NCS’s AEO benefits include:

• low rate of physical inspections and examinations;
• expedited Customs clearance and release of goods;
• Customs control after clearance at premises;
• access to dedicated Customs personnel known as relationship managers;
• priority use of non-intrusive inspection if cargo is selected for a random check;
• use of barge and rail operations to expedite cargo release through specified routes; and
• dedicated parking spaces.

The pilot offered valuable insights into the areas that needed improvement and adaptation for a broader roll-out. It allowed the NCS to confirm that various economic operators could meet the AEO requirements, to estimate the level of resources needed to be able to carry out validations and to determine the internal procedures and resources required to offer AEOs the expected benefits. Furthermore, it provided clarity on turnaround times for the end-to-end AEO process and enabled the NCS to measure the impact of these benefits.

When designing and rolling out its AEO programme, the NCS benefited greatly from the support of international partners that have long been at the forefront of global trade facilitation.

As already explained above, the technical assistance and guidance provided by experts under the WCO’s Accelerate Trade Facilitation Programme were vital. The partnership established under this programme not only focused on the implementation of WCO standards and recommended practices, it also supported innovation and transformation by developing employee management and leadership skills. Conscious of the fact that, no matter how robust SOPs are, without leadership, any initiative is already “dead on arrival”, the NCS asked to benefit from the WCO’s Leadership and Management Development (LMD) programme. The Comptroller-General of Customs, Bashir Adewale Adeniyi, and several other key officers participated in LMD-related activities, which were seen by the NCS as being instrumental in improving the work environment and bridging the gap between those who lead and those who follow. Officers felt freer to express their creativity in providing optimal solutions to challenges, and there is no doubt that the new organizational mindset and officers’ confidence contributed to the success of the AEO project and programme sustainability. Overall, LMD activities enhanced the NCS’s capacity to manage operations and reforms more effectively and in a more inclusive and transparent way.

While external assistance can be of great value, the fact that the NCS took ownership of its reform, with the senior management team creating an environment conducive to change, was fundamental to the success of the AEO project. The partnership established between the NCS and the WCO Accelerate Trade Facilitation Programme was also structured in a manner that ensured the NCS’s accountability for the deliverables agreed for each of the capacity-building and technical assistance activities.

The NCS’s AEO programme also benefited from the support of the World Bank under its Accelerate Revenue Programme, which focuses on any Customs process that is directly linked to revenue generation. By accelerating trade operations, the AEO programme is expected to lead to an increase in both trade operations and revenue collection.

Conducting Time Release Studies (TRS) on a regular basis is another initiative that the NCS has undertaken with the support of the WCO Accelerate Trade Facilitation Programme. This will enable the Administration to measure the impact of many of its initiatives, including the AEO programme.

The trade operators participating in the AEO pilot started to enjoy the full benefits of the programme in September 2024. Data that were extracted to establish release times for AEOs showed that the average time required for the release of their shipments was 43 hours. This is 5 hours less than the target clearance time of 48 hours and represents a reduction of 66.9% in the average time usually required to clear a shipment, which is 168 hours (7 days). Moreover, three of the companies taking part in the pilot have already reported combined cost savings of 100 million naira during the period from September to December 2024.

Moreover, the real success lies beyond the metrics, in the quality of the relationships the NCS is building. One compelling example is how AEOs have embraced the principle of self-regulation. Two of the companies participating in the pilot demonstrated exceptional integrity by voluntarily disclosing an underpayment of duty amounting to several million naira. This level of trust and transparency – where partners self-audit and bring oversights to the attention of the Administration – exemplifies the essence of the AEO programme.

There are a great many international development partners that support the NCS on various reform initiatives. Every one of them has unique perspectives on how Customs reforms should pan out. Customs administrations should appreciate the different strengths, competencies and modalities of operations of each of them while keeping a critical mind and ensuring that reforms are aligned with the recommended international Customs standards adopted by the WCO. National ownership and co-ordination remain essential for avoiding well-intentioned but sometimes haphazard interventions from international stakeholders.

The monitoring and evaluation results of the pilot phase indicate the need to onboard critical OGAs involved in port operations for a more streamlined processing of AEO cargo and to promote SME participation. The programme has already set the stage for a more secure and efficient trade ecosystem, and it holds great promise for transforming the country’s trade sector and contributing to its overall economic growth.

As more businesses become AEO-certified, Nigeria can expect trade volumes to grow and the competitiveness of all actors in the supply chain to increase. Through strategic partnerships with the WCO and the World Bank, Nigeria is paving the way for a future where its businesses thrive in a competitive, secure and efficient trade environment.

More information
Report by TVC News Nigeria on the launch of NCS’s AEO programme:
https://youtu.be/kimTTY_2qQQ?si=qU1X6gRrQfLG3T_1