A new approach to customs reform in Niger: Positive results based on data science and innovative technologies

An original approach to customs reform, which has been under way in Niger for more than two years, is starting to produce results. At a time when digitalization is a hot topic for governments, Niger is proposing a number of innovative ideas that could be replicated in many other countries.  

In 2020, Niger Customs decided to set up a data analysis and reform unit to make use of its customs data.  After one year of full-scale operation, practical and tangible results have already been achieved in revenue and trade facilitation.

Focus on Strengthening Internal Capacities 

At the end of 2019, the approach started by raising the awareness of the highest levels of management under the impetus of the Director General of Customs. This took the form of a seminar on data analysis, followed by analysis demonstrations, particularly during the pandemic to monitor changes in customs revenue, trade volume and trade routes. The analyses were shared with policymakers.

After the first phase, which lasted for a few months, the Director General of Customs committed his administration to making more widespread use of data by setting up a dedicated team. Training the members and formalizing its role in the institution was the second step in the transition. An internal call for applications was organized for employees at all levels. There were 42 applicants. Ten customs officers were selected for their special affinity for programming and computers and for their basic education in science. Niger customs data were used to develop a four-week training course for these officers on open-source programming language and a commercial data exploration and visualization tool. At the end of the course, five customs officers were selected to create the Niger Customs Data Analysis and Reform Unit (CADRE), led by a seasoned customs officer.  With financial support from the World Bank’s Global Tax Program, the training was provided by experts who were expatriate Nigeriens and supported by an adviser from the French Development Agency.

Gradual switch to evidence-based decision-making 

Even though it is still early days, the Unit has found its place at the center of discussions about reform. It produces and uses quantitative analyses of revenue, volumes, risks, sector analyses, simulations, etc. at the behest of the Director General. Its analyses are shared with all Niger Customs managers and with political authorities. There are two monthly meetings with senior management and two other monthly meetings with the Minister of Finance. These meetings are key events at which the Unit is always called on to present its analyses. The work of the unit presented at these periodic meetings makes evidence-based discussion about reform and about tax and technical measures possible.

This gradual institutionalization of data analyses in internal discussions is a result that cannot be quantified, but it is critical for the success of the other actions.  A new decision-making culture has emerged at the central level that is based on facts and figures.

The Unit is also at the heart of the improvement of practices in the field since it manages the “performance contracts.” Following the model that was developed in Cameroon, Togo and Madagascar, customs inspectors, who are the first line of control, make a commitment to the customs administration by signing individual performance contracts. The evaluation criteria are based on indicators that reflect the priorities of Niger Customs, which are reducing clearance times, optimizing custom revenue and combating fraud and poor practices. Six months later, it was the turn of heads of customs offices to sign individual contracts laying down efficiency criteria for every step in the customs process, from the reception of goods to payment. The Unit implemented such contracts at all of the main customs offices. The introduction of these contracts was preceded by a long phase of customs data analysis to detect the weaknesses of customs procedures and quantify their impact on revenue, followed by a national tour during which the Unit explained the new data-based approaches to customs officers in the field, describing the procedures for calculating and evaluating the indicators to ensure better ownership of the approach. 

Encouraging initial results 

The contracts quickly made a difference. In the first nine months of the experiment, Niger Customs collected CFAF 731.9 million, the equivalent of more than US$1 million, in additional duties and taxes at the first line of control (for annual receipts of CFAF 222 billion). Over the same period, before the contracts were introduced, Customs collected only CFAF 63 million, or 10 times less. This modest figure is important because the change in it reveals a disruption in the front-line control procedures and because combating fraud makes it possible to reduce collusion as well. As was the case in other countries, introducing the contracts provided an opportunity for changing customs procedures to make them more secure. The impact of the performance contracts can also be measured by the reduction in clearance times, which fell from an average of 8.76 hours to 3.29 hours. 

Source of proposals and innovation 

 The Unit proposes innovative solutions based on data analysis to meet the recurring needs of the administration. More specifically, Niger Customs is seeking to deploy its units more effectively by adapting its geographical structure, which has been in place since 1962, to economic changes in the border zones over the last 20 years. Customs has been working in partnership with a geomatics engineering firm to apply geospatial techniques to evaluate the increase in cross-border economic flows, using customs data and external data, including geospatial data. This partnership has generated original maps of different scales and new geospatial data. The analyses were used to identify the main centers of current cross-border trade in Niger and the neighboring countries and to analyze their growth and the routes between them in order to obtain an overview of cross-border activities in 2020. These analyses confirmed the existence of new high-growth areas, busy unknown alternative transportation routes and interesting finds such as transit areas for trucks, new markets and storage areas. These findings led to the organization of patrols by the customs brigades at the entrance of the areas identified. 

Replication and specific features of the approach 

Data analysis is a major topic for the Customs community. The World Customs Organization deems it to be a strategic priority for improving the efficiency of customs.

This approach appears to be replicable in other countries and reveals specific features that are very instructive.  

• Niger Customs now conducts all of its data analysis internally. There are several reasons for why they chose not to rely on private specialized companies: data confidentiality, internal capacity to interpret analyses related to some less explicit aspects of the customs environment, determination to avoid the contractual forms and dependency of the previous inspection contracts. Furthermore, there has been no recruitment outside of the administration for the time being. It was important for customs officers to acquire data analysis skills and take ownership of the customs data, before considering adding new human resources specializing in analysis.  

• Niger Customs made another choice: centralizing its capacities in a “data lab,” rather than devoting its analytical resources to a specific area, which is traditionally risk analysis. As a result of this choice, analysts use all of the customs data, along with external data, to solve a variety of complex problems. This choice also helps create a motivating work environment. 

• The third choice was to use open-source tools. These tools are free, but costs are incurred for training and monitoring, for example. However, these costs are an investment in internal skills and human resources, which also contributes to a motivating and outward-looking work environment. 

• In addition to the support of technical and financial partners for this initiative, there is another key requisite for the independence and survival of such a unit: substantial specific monthly bonuses for the members of the unit and various benefits for the senior management of customs so that they make a commitment to an innovative field at the heart of modern customs.