The Nigeria Customs Service (NCS), over the weekend in Lagos launched the Authorised Economic Operator (AEO) programme, a stride toward modernising trade processes and aligning with global best practices.
The initiative, which is benchmarked against customs administrations like His Majesty’s Revenue and Customs (HMRC) in the UK and the South Africa Revenue Authority (SARS), is already showing impressive results.
What is the AEO programme?
The AEO programme is an internationally recognised framework that certifies companies involved in cross-border trade as trusted economic operators.
These companies, which can include manufacturers, importers, exporters, logistics providers, and customs-licensed agents, are certified based on their adherence to supply chain security standards set by the World Customs Organisation (WCO).
The certification not only validates their compliance and operational excellence but also grants them access to streamlined customs procedures, priority treatment, and reduced physical inspections.
In August 2023, the Nigeria Customs Service launched the pilot phase of the AEO programme in collaboration with experts from the World Customs Organisation (WCO) and the World Bank. Six companies, including First Class Refreshment, Le-Look Nigeria Limited, 11PLC, Huawei Technologies Ltd, Friesland Campina WAMCO, and Ideal Royal Crown Logistics, were selected for the pilot.
Read also: Pilot AEO programme reduces cargo clearance time by 66.9% – Customs
Impact on trade efficiency
One of the most significant achievements of the AEO pilot phase has been the reduction of cargo clearance time by 66.9 percent—from 168 hours (seven days) to just 43 hours, far surpassing the initial target of 48 hours, Bashir Adeniyi, the comptroller-general of Customs reported during the launch.
For comparison, the pre-AEO status required five days for clearance, while non-AEO economic operators still face an average clearance time of seven days. With such improvement, businesses can now move goods faster, reducing costs and enhancing Nigeria’s trade competitiveness.
But benefits extend beyond efficient timelines. Companies under this framework enjoy expedited customs processing, lower rates of physical examination, and access to dedicated vendor services.
As the programme expands, it is expected to attract more participants from key industries such as manufacturing, agriculture, and logistics, further boosting economic activity.
Driving economic growth
The financial impact of the AEO initiative is already evident. The trade value of the six pilot companies increased from N185.8 billion in 2023 to N563.8 billion in 2024, the NCS reported.
Consequently, customs revenue from these companies surged from N18.4 billion to N51.1 billion within the same period. This revenue growth aligns with the broader economic aspirations of President Bola Tinubu’s administration, which aims for a $1 trillion economy by 2030.
Beyond financial gains, the AEO programme contributes to a more predictable and transparent trading environment, according to goals outlined in the project’s handbook.
Companies that meet high compliance standards are rewarded with tangible benefits, encouraging others to follow suit. This shift from traditional transaction-based control to a more comprehensive compliance management system enhances supply chain reliability and security.
Security and trade facilitation
Security remains a pressing concern in Nigeria’s trade landscape. The country ranks eighth in the Global Terrorism Index and 112th in the World Economic Forum’s assessment of counterfeit and pirated goods. The AEO framework offers a strategic solution by identifying businesses that uphold high security standards and rewarding them with expedited customs processes. This not only deters illicit trade but also strengthens supply chain integrity.
Additionally, the NCS is working towards establishing Mutual Recognition Agreements (MRAs) with other customs administrations, which would allow Nigerian AEO-certified businesses to enjoy seamless trade benefits in other jurisdictions. Such agreements will enhance Nigeria’s standing in global trade and improve its competitiveness.
Supporting SMEs and reducing trade barriers
Small and medium-sized enterprises (SMEs) play a crucial role in Nigeria’s economy, making up 96 percent of businesses, contributing 46 percent to GDP, and employing 84 percent of the workforce, according to data from the International Labour Organisation and PwC.
However, many SMEs struggle with the complexities of international trade regulations. The AEO programme addresses this by simplifying customs processes for SMEs that demonstrate strong internal corporate governance.
By reducing these barriers and providing access to a trusted global network, the programme enhances credibility and expands market reach for Nigerian businesses.
The road ahead
Reforms such as the Pre-Arrival Assessment Report (PAAR) and sector-specific Fast Track schemes have improved clearance efficiency for importers, but they remain limited in scope. The AEO framework, as part of the broader WCO SAFE initiative, introduces stricter security standards while offering greater trade facilitation benefits.
To fully optimise trade, the NCS aims to shift more shipments from the high-risk red lane to the expedited green lane, reducing unnecessary delays. By fostering a stronger partnership between customs and businesses, the AEO initiative not only secures supply chains but also bolsters Nigeria’s position as a reliable trading partner on the global stage.
