Import waivers cost Nigeria N585bn
Waivers granted between 2011 and 2015 by the federal government have drained the economy losing N585 billion and making it one of the drainpipe on revenue and worsening the challenges of oil price drop in the international market.
The loss due to waivers was enough to establish five local industries in each of the states of the Federation and the Federal Capital Territory (FCT), an analyst said.
This fact came during debate on a motion sponsored by Rafiu Ibrahim (APC, Kwara South) titled ‘Indiscriminate Use and Abuse of Waivers for Rice Importation’ drew condemnation from the senate which hence asked Federal Government to stop all waivers on rice importation and other agricultural produce for now.
The chamber also asked the presidency to mandate the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, and the Comptroller General of Customs, Abdullahi Dikko, to ensure that all duty due to government is recovered.
With this, the lawmaker said the efforts to diversify the economy have been defeated especially the Federal Government policy to encourage agriculture and agriculture business.
Another lawmaker, Ibrahim Gobir (Sokoto East), “The sum of N585 billion was given out as waivers between 2011 and 2015. If you share this amount amongst the 36 states of the Federation and the FCT, each would have received the sum of N15 billion (N15,810,810,810.81). When you take it further down to the 109 senatorial districts, each would have received the sum of N5 billion (N5,366,972,477.0642). This amount is more than enough to establish five industries in each state,” he said.
The Senate also resolved to set up an ad-hoc committee to look at all waivers, concessions and grants, and carry out a holistic review to determine the full recovery of all government revenue that are related to this policy.
Ibrahim who noted that the Federal Government has a policy to encourage agriculture and agriculture business as a deliberate policy to diversify the economy, acknowledged the huge amount of money lost by the Federal Government on duty waivers to importers of rice, palm oil, energy equipment, steel and vegetable oil.
He observed that the tax incentives that were offered to encourage Foreign Direct Investments (FDIs) into the country, are now doing more harm than good to the nation’s economy.
According to him: “During the past recess and during an interactive session with the CBN, the CBN had revealed to the Senate how these importers have overshot their quota and now owe the Federal Government duties running into billions of Naira. These importers ordinarily should be paying, in addition to the duty on the commodity, a fine of 70 percent of duties and levies to the Federal Government; the government has failed to implement this directive and denied our people legitimate review into the Federal Government coffers.
“Some of the defaulting companies had, notwithstanding their default, been awarded fresh waivers to import more. The Nigeria Customs Service, which ought to be enforcing compliance to duty and other revenue at the boarders, has failed to carry out its mandate and enforce compliance from these defaulters.
“The Federal Government loses N71 billion annually on duty waivers, especially to importers of rice, palm oil, energy equipment, steel and vegetable oil. In 2011, government gave import duty waivers to 10 rice and palm oil importing companies alone, which amounted to N150 billion.
“These tax incentives offered to encourage FDIs into the country is now doing more harm than good to the economy, as monies, which could have been invested in public schools, hospitals, roads and other social infrastructure are lost mindlessly without consequences”.
Also speaking in favour of the motion, Mao Ohuabunwa (PDP, Abia North) pointed out that Nigeria cannot afford to blow hot and cold at the same time.
“We can’t be talking about diversification, and yet be killing our economy by ourselves. Waivers kill our agricultural sector. We need to encourage our local entrepreneurs and manufacturers to grow,” he said.
In his submission, Philip Aduda (PDP, FCT), expressed sadness that Nigeria has become a dumping ground for Asian countries like China and India.
“Local production is supposed to promote local economy. The issue of waivers is aimed at promoting local content. But unfortunately, Nigeria has become a dumping ground for rice, especially from countries like China and India. Waivers undermine the economy of the nation,” he added.
On his part, senate president, Bukola Saraki, described the development as economic sabotage.
The ad-hoc committee has Adamu Aleiro (APC, Kebbi Central) as chairman.