Customs AEO system slashes clearance time from a week to 48 hours – Onafowokan

The Nigeria Customs Service officially went public with its Authorised Economic Operator (AEO) program on February 14, 2025, promising traders it will erase notorious port congestion and provide faster clearance times for their operations. George Onafowokan, the chief executive officer of Coleman Wires and Cables, acclaimed Sub-Saharan Africa’s largest cable manufacturer, was among the 51 companies to be certified out of the 584 that apllied. In this conversation with Bethel Olujobi, adapted into an interview, he shares his firsthand experience navigating the certification process and the tangible benefits his company has achieved since becoming certified.

Excerpts:

How long did the AEO certification process take for Coleman Wires and Cables, and how rigorous was it?

We applied around March 2025. We were part of the 51 companies that got the certification outside the pilot program, and among the few Nigerian-owned. We did upload an online application. We completed that by April. Then we had the audit around July. And we got approved by October. So the process took roughly five months.

At the first instance, the amount of documentation or information needed for the online portal was a bit cumbersome. And people had to get some understanding. Our team needed some formal understanding. Since they were aided by Customs, they called and asked for help and they were given guidelines on what to do. When we finished that, the audit process took about three to four days of fiscal audits. They came around with lawyers and everybody to inspect your facility. It wasn’t just inspection. They actually sat with each team and went to each department, asking questions on what was done and what has been done. So it’s quite thorough. I think the first batch really went through a lot. It was very intense.

Which of the two certification levels did you get?

We got the AEO Simplified Certification, which grants benefits for three years.

What requirements did you have to meet to become certified?

You must have audited accounts. They would look at your three years audited account or five years audited account. You must be able to speak to corporate governance structures. There’s the pre-qualification, which is the online. Then there’s also the audit after the pre-qualification. It also takes cognisance if you’ve had any post-clearance audit issue (PCA). If you’ve had any issue of post-clearance audit, you would need to profile yourself on those areas and table your own understanding or clearance of it, which means you need to declare what you might have done.

If there’s any infractions over the years, you’ll need to do so and then clear those backlogs of infractions or pay them off. Because under the AEO, Customs must literally be saying, we accept that on the basis of security, financials and everything else, you are upright. And on the basis of that, we’re going to allow you to take your containers without supervision.

What time and cost savings have you achieved?

Under the old Fast Track, our aim was between three to five working days. We were usually pushing towards clearance time of a week to 10 days. But today, we are moving it down to 24 to 48 hours for clearance, maximum 72 hours. So when you take that coming down from between seven to 10 days, to between one to three days, you’re cutting on demurrage, you’re cutting on terminal fees, you’re cutting on time, and you’re cutting on delays in raw material needed.

The majority of the cost is in terminal fees and demurrage, especially. Terminal fees are almost two or three times the cost of demurrage on a container. Most shipping companies give you three days or seven days free. If you can bring everything back within the period of free time, the cost to any company will be reduced by between 75 to even 90 percent. Really, that’s what we want.

You mentioned infractions earlier, what infractions did you have to settle?

In our case, we had one single case that was disputed. And the area of concern was the HS Code. Eventually we acceptd the profiling. And we did pay. So, but it then meant meant that once you’ve accepted profiling, you can’t reverse your own position that you’ve accepted.

Meaning every future transaction that you’re importing must have that correct HS code that you’ve accepted. So, you know, there’s some companies that have three, four, five defensive actions that they themselves accept to solve.

How much did you have to pay Customs?

In my case, I paid three digits.

In millions?

Yes. But they gave us a good spread. I fought, argued on the basis of, you know, you want to put my workers at risk. But there was empathy. Customs said we cannot remove this thing for you, we cannot reduce it. If we do, someone will say to us, we are taking something from you. The officer told me, Look, if I do so, you will think you are getting away with it. But someone will pick it up that you didn’t clear yourself completely. Because there’s no way the system in custom clears that into zero. It only says you can pay. So they gave us a payment plan to pay.

I didn’t have to pay a penalty, just quickly go and pay the difference, and then take your container. But these are infractions that clearly all of us that make those profiling know. So people actually accepted to pay. The major issues were those that didn’t want to pay. But they knew they had infractions.

How does AEO affect the role of customs agents now?

Under AEO, you can do everything yourself. You don’t need a customs agent. You can do without, if you want to. But you still have to have your own license, which means the company must get its own clearing license. But for us at Coleman, we’ve decided to continue using customs agents.

I’m one of those manufacturers that believes in focusing on your core competence. I know how to manufacture cable. That’s my job. Everything else from transportation, clearing, logistics, it’s not my key subject. Let other people do the job. And be more efficient. So my own belief is, look, don’t be jack of all trades, master of none. Focus on your key competence, whatever your business is there, and leave other areas to people that can be more efficient at doing it.

How important is choosing customs agents when operating under the AEO system?

Agent vetting is very important. You have to vet. You have to look at your history with that agent. We don’t change agents easily. I’ve had three, four agents in the last 15 years or 20 years consistently. So if you had one or two into the list over the years, it’s okay. But when you have trusted agents, even the customers will know those agents with you. Agent vetting is also important for most companies. And it can buy your business. It can improve your business.

How would you rate the overall handling of the process by Customs?

I have to be honest. I’ve never experienced customs like this in my 25 years in business. The audit team was extraordinary. They were extremely professional, courteous, patient, and genuinely seemed to want our business to succeed. They literally spend their time to make sure you understand why, for whatever actions you have to take, you receive benefits in it. And that’s really sometimes what we all need to be encouraged to do the right thing.

You can’t buy your way into AEO. There was nobody giving anybody money. The investigating audit team made customs look very good. It is a Customs that we don’t believe we have.

What improvements would you recommend to the AEO program?

The biggest gap I see is with small and medium enterprises (SMEs). Many don’t have five years of audited financial accounts. They don’t have the established governance structures or the professional infrastructure that larger companies like ours have. But that shouldn’t disqualify them entirely.

I would strongly recommend that customs establish a dedicated help desk specifically for SME support. Not to bend the rules or lower standards, but to guide companies through the requirements. The help desk could explain what alternatives they might provide, how they could document their operations differently, and what a phased approach might look like. This would help more companies reach the standards required without compromising the integrity of the program. Right now, only 51 out of over 500 applicants got certified. If we could help more companies understand what’s needed and give them proper guidance, I think we’d see higher success rates.