OPINION: Presidential imports waivers: For good or bad? – Henry Boyo

Published:12 Nov, 2012

Presidential imports waivers: For good or bad? – Henry Boyo

“The bill gives significant powers to the Customs Service and ordinarily this should not be a bad thing, but it does remove powers from the President and the minister that we think are necessary to ensure that the economic agenda of the country are properly carried out as directed by the President and delegated to the minister.”

The above is an excerpt from the presentation of the Minister of Finance, Dr. Ngozi Okonjo-Iweala, at the public hearing on the proposed amendment to the Customs Act and the democratisation of the President’s powers on import duty waivers by the Senate Committee on Finance.

For the purpose of this article, we will briefly discuss the impact of waivers on industrial growth, social welfare and corruption.

Presidential import waivers are granted seemingly in pursuit of government’s altruistic economic objectives; ultimately, however, our agricultural and industrial base has often become destabilised by such waivers, as capacity utilisation in respective subsectors begin to contract with increasingly failed enterprises and rapidly rising unemployment as collaterals.  Inevitably, the abiding spectre of unemployment has instigated huge security problems, as millions of our youths become jobless and desperate.

Furthermore, selective waivers have generally transfigured markets into monopolistic scenarios.  Consequently, the usual imperfections of a monopolistic market such as price manipulation, excessive profiteering and a parasitic distribution chain would also prevail.  Ultimately, the seemingly ‘altruistic’ social objectives of Presidential waivers become defeated, as beneficiaries of waivers celebrate outrageous returns on their investments, while local industrialists struggle unsuccessfully to maintain market space.

Import waivers may also deplete government revenue; incidentally, the current Senate public hearing is coming on the heels of Nigeria’s loss of about N58.7bn (over 10 per cent of the 2012 Customs revenue budget), as a result of executive waivers this year!  Thus, projected federal revenue will consequently be further reduced by foregone corporate and personal tax revenue from failed businesses and lost employment opportunities caused by presidential imports waivers.

In the same vein, the survival of some other local industries have become jeopardised by the inexplicable lifting of the ban on importation for such consumer goods as fruit drinks, tooth picks, furniture, textiles and vehicles; i.e., those items for which local manufacturing capacity readily exists.  Indeed, the facilitation of such imports has been cited as a major avenue for dumping substandard goods in Nigeria; a development, which would inevitably further constrain industrial investments domestically.  Worse still, it is alleged that import waivers granted by previous administrations were often times used to import other fast moving products to sell rather than the specific products covered by the waiver.

Critics have suggested that such duty and levy waivers are not often driven by altruistic or patriotic objectives, but by an obligation to compensate political cronies, godfathers, associates and friends of government.  Thus, the issuance of waivers has been seen as driver of political inequities and corruption, as well as a veritable obstacle to the true practice of democracy, as the considerable slush funds derived from waiver scams are deployed to influence political patronage and election victory.

Regrettably, allegations of such impropriety with public revenue have largely remained uninvestigated by the security agencies.  Inexplicably, itinerant businessmen, often with shadowy corporate identities, have also been beneficiaries of the huge gains from import waivers; indeed, some of such ‘emergency entrepreneurs’ are alleged to have made billions of naira by simply selling their rights to the waiver to a third-party!  Incidentally, several of our nation’s business icons have at some time or the other also benefited from such waiver scams.

The 2013 budget proposals may have inadvertently, or possibly, deliberately set the stage for another waiver scam next year; the high levy and duty rates for refined sugar (20 per cent duty and 60 per cent levy) and rice (10 per cent duty and 100 per cent levy) will undoubtedly instigate huge price rises for these ‘essential’ commodities.  The intention of such high duties and levies is presumably to support the survival of local production of rice and sugar.  However, it may be unrealistic to expect the products of such investment to come on stream in the next 12 months.  The market will inevitably become under-supplied and the resultant price spiral for these ‘essential’ commodities will undoubtedly lead to a massive public outcry in an economy already severely ravaged by inflation.  As usual, government would step in and ‘altruistically’ grant waivers to its favoured partners for urgent importation of rice and sugar!

Consequently, prices would temporarily fall marginally, while cross border smuggling of rice and sugar will once again become very profitable business with the collateral of further loss of import duty revenue; worse still, government’s efforts to increase local production of rice and sugar may ultimately once again become impractical, as a result of smuggling.  In other words, as it was in the past, so will it be next year.

In the light of the foregoing, the observation of Ahmed Makarfi, Chairman of the Senate Committee on Finance, that “the powers to grant waivers should not be under the prerogative of one person” should be taken seriously.  Indeed, the view of the National Assembly, according to Markafi, is that “such power must not be exercised by any individual, except if the legislature by some legislation or resolution takes a decision about it”.

In reality, the revenue loss consequent upon covert presidential imports waivers is tantamount to robbing the federation account through the back door to bolster the fortunes of some friends of government.  In lay parlance, this is akin to hurting the people while giving away public funds without any parliamentary authority for such ‘disbursement’.

Although Dr. Okonjo-Iweala earnestly favoured the retention of waiver powers by the President and the Minister of Finance, she however, pleaded that her ministry should be represented on the proposed new Customs and Excise Board.  Incidentally, the Central Bank of Nigeria Governor, Lamido Sanusi, similarly called for the inclusion of the apex bank on the governing board of the Customs Service.

In view of the public revenue issues involved, these requests should be considered appropriate.  But it is paradoxical that these same public officers, who recognise that their representation as board members of a new Customs board would enhance transparency and accountability, would move heaven and earth to resist any attempt to accommodate such principles in their own management of public funds.  For example, the CBN obviously has no qualms about transparency and accountability of its current 12-member board with 10 CBN internal staff!

– Henry Boyo (lesleba@lesleba.com)

Related Posts

Recent Posts

Buhari Assures Children Of Better Nigeria

President Muhammadu Buhari has felicitated with all Nigerian children on the occasion of this year’s Children’s Day celebration, reassuring them his administration remained fully committed to fulfilling its promise of a better Nigeria. The president, in his Children's Day message to the nation yesterday, said it was a thing of joy that on the occasion, the country could also celebrate the safe return of one of the abducted Chibok schoolgirls, Amina Ali Nkeki and many other abducted...

Metuh Wrote EFCC, Ready To Return N400m – Counsel

The immediate past National Publicity Secretary of the Peoples Democratic Party, Mr. Olisa Metuh’s lead defence counsel, Dr. Onyechi Ikpeazu (SAN), has said his client has told the Economic and Financial Crimes Commission that he is willing to return the N400m he allegedly received from the Office of the National Security Adviser in November, 2014. Metuh is currently being prosecuted by the EFCC for allegedly receiving the money, which the prosecution alleged was collected from the...

No Group Will Illegally Occupy Nigerian Communities Under My Watch- Arase

Solomon Arase, the Inspector-General of Police, on Thursday assured that no group will overrun the country or illegally occupy any part of it under his watch as the chief police officer. Mr. Arase gave the assurance in Abuja at a public hearing on the influx of herdsmen to Benue, organised by the House of Representatives’ Committee on Police Affairs. He said the Nigeria Police Force have so far arrested 18 people in connection with the...

CAF Bans Giwa, 4 Others For 5 Years

Confederation of African Football, CAF, has slammed a five-year ban on embattled Chris Giwa and four four of his disciples thereby confirming and extending the same five-year ban placed on them by the Amaju Pinnick- led Nigeria Football Federation. The four others affected by the continental ban are Muazu Suleyman, Yahaya Adama, Sani Fema and Johnson Effiong. In a letter signed by CAF’s Secretary-General, Hicham El Amrani and dated May 27th 2016 and copied to NFF’s...

Entering Second Year, Buhari Faces Economic Turbulence

Nigeria’s President Muhammadu Buhari marks one year in office on Sunday, after 12 months dominated by efforts to end the brutal Boko Haram conflict and tackle endemic corruption. But as he enters his second year, the fallout from the nearly two-year slump in global oil prices has left the country facing economic meltdown, as potentially dangerous new security threats emerge. “There is a major challenge to get the economy reactivated, stimulated and boosted,” economist Bismarck...

Ese Oruru, Alleged Abducted Girl, Delivered Of Baby Girl

Ese Oruru, the teenager who was allegedly abducted and impregnated by Yunusa Dahiru, a Kano indigene, has been delivered of a baby girl in Yenagoa, Bayelsa State. Her baby came on Thursday about 10.15 am at the Government House Clinic in the state capital. Her elated father, Charles Oruru, confirmed yesterday that the girl, who was in Junior Secondary School...

Herdsmen Attack: Police To Train Neighbourhood Watch Outfits In Enugu

The Enugu State Police Command has concluded arrangements to train neighbourhood watch security outfits in communities in the state. The plan is a fallout of the attack on Ukpabi Nimbo community by suspected Fulani herdsmen on April 25. Although some communities in the state already had neighbourhood watch units, a decision to set up the outfit in all the towns in the state was the major outcome of a stakeholders meeting convened by Governor Ifeanyi Ugwuanyi after the Ukpabi Nimbo attack. The...

EFCC Re-Arraigns Ajudua For $8.4m Fraud

The Economic and Financial Crimes Commission on Thursday re-arraigned an alleged serial fraudster, Fred Ajudua, for an alleged fraud of $8.4m.   Ajudua was accused of swindling the complainant, a former Chief of Army, Staff Lt Col. Ishaya Bamaiyi, of the sum sometime in 2004 at Kirikiri Prisons in Lagos.His re-arraignment on Thursday followed the transfer of his case from Justice Oluwatoyin Ipaye of a Lagos State High Court in Ikeja to Justice Kudirat Jose of the same court. The amended charge...

FG To Assist Communities Reclaim Lands Damaged By Mining Activities

The Federal Government says it has made provisions in the 2016 budget to help communities reclaim lands damaged through open cast mining. The Minister of Solid Minerals Development, Dr Kayode Fayemi, said this at the News Agency of Nigeria (NAN) Forum in Abuja. According to him, the ministry has a law that gives conditions for environmental complaints.   ``Talking specifically about the conditions in places like Jos and Enugu if you look our budget this year, you will see specific allocation for reclamation...

Military Pensions Board To Complete Payment Of 33% Increment Arrears To Pensioners By 2017

The Military Pensions Board (MPB) says payment of 33 per cent increment arrears owed military pensioners since 2010 will be completed by the end of 2017. The Chairman of the Board, Air Vice-Marshal Muhammad Dabo, disclosed this in an interview with the News Agency of Nigeria (NAN) in Abuja on Wednesday. He said the administration of Muhammadu Buhari was committed to the welfare of Nigerian military pensioners and had been fully supportive of the board’s activities in the past one year.   ``There...

Army Acquires Vehicles To Enhance Communication

The Nigerian Army has acquired six vehicles to enhance communication in its fight against insurgency in the North-East. The News Agency of Nigeria (NAN), reports that the vehicles were inaugurated by the Chief of Army Staff (COAS), Lt.-Gen. Tukur Buratai, during his visit to Lagos on Wednesday. Buratai said the vehicles, procured by the Army Signal Corps, would be deployed to help in prosecuting the fight against insurgency in the North- East. ``We are still pursuing the terrorists and we will continue...

FG Constitutes Committee To Address Demands Of Organised Labour

The Federal Government on Wednesday constituted a 16-man committee to address issues that necessitated the three-day strike called by the Nigerian Labour Congress (NLC) after the fuel pump price hike. Mr Babachir Lawal, the Secretary to the Government of the Federation (SGF), stated this in Abuja after a meeting of the Federal Government delegation with the organised labour. He said that the meeting was called to work out modalities on ways to resolve the issues raised by the organised labour. ``I am...

Former PDP NWC Members Endorse Constitution of Makarfi-led Caretaker Committee

Members of the immediate past National Working Committee (NWC) of the Peoples Democratic Party (PDP) have endorsed their dissolution and other decisions taken at the party’s National Convention held in Port Harcourt. This is contained in a statement jointly signed by the immediate past Deputy National Chairman of the party, Uche Secondus and six others. The statement stated that in the absence of the then National Chairman of the Party, Sen. Ali Modu Sheriff, Secondus presided over the...

Agunloye Advises FG To Fight Corruption In Power Sector

Former Minister of Power and Steel, Dr Olu Agunloye, on Wednesday advised the Federal Government to address corruption in the power sector. Agunloye gave the advice during a chat with newsmen in Abuja. He had purchased Expression of Interest and Nomination forms for the Ondo gubernatorial election on the platform of Social Democratic Party (SDP). According to him, electricity generation is not rocket science and tackling corruption in the sector will ensure stable power supply across the country. ``When I was minister of...

FAAC: FG Recovers N1.5 bn, Shares N281.5bn To 3 Tiers Of Government

The Minister of Finance, Mrs Kemi Adeosun, said in Abuja on Wednesday that N1.5 billion, being excess bank charges, was recovered and paid into the Federation Account. Adeosun announced this while addressing newsmen on the outcome of the Federation Accounts Allocation Committee (FAAC) meeting. She said this was done by a consortium of consultants for the Federation Account and that the money was proposed for distribution. She also said that N281.5 billion was shared among the federal, states and local governments as...

Army Renews Call On Boko Haram Fighters To Surrender

The Nigerian Army on Wednesday renewed calls on repentant Boko Haram fighters wishing to surrender to do so without wasting more time. Maj.-Gen. Lucky Irabor, the Theater Commander, Operation Lafiya Dole, made the call while speaking at the foundation laying ceremony of the Nigerian Army Officers Wives Association (NAOWA) Nursery School and a Day Care Centre at the Maimalari Barracks, Maiduguri. Irabor said that those who failed to surrender would pay the price for being stubborn. He added that ``I will like...

5 Herdsmen Arrested Over Enugu Massacre

The Police Force Head­quarters in Abuja, have announced the arrest of the masterminds and perpetrators of Nimbo community in Uzo-Uwani Local Government Area of Enugu State on April, 25, 2016. The attack led to the death of several persons and destruction of prop­erty valued at millions of naira The attackers compris­ing a five-member-gang were arrested by op­eratives of the Inspector General of Police (IGP) Intelligence Response Team (IRT). The suspects were found with one...

Economy In Volatile Situation- Buhari

Nigeria’s economy is currently in a volatile situation due to the crash in oil prices, President Muhammadu Buhari has said. The president’s remark came at a time when oil price yesterday rose to nearly $50 a barrel, even though Nigerian will earn less from the boom due to drop in production in recent times.  Buhari spoke yesterday at the Aso Rock Villa in Abuja at a farewell audience with Iranian Ambassador to Nigeria,...

Reps Order Halt Of Refineries Privatization

The House of Representatives Committee on Privatization and Commercialization has directed the Nigerian National Petroleum Corporation (NNPC) to stop its planned privatization of the nation’s refineries or joint investment ventures with some multinationals. The committee’s chairman, Hon. Ahmed Yerima (APC, Bauchi), who gave the order yesterday in Abuja during an interactive session with the managements of the NNPC and Bureau of Public Enterprises (BPE) on the planned privatization of three  refineries in the country, said the...

$200 Billion Loot: EFCC Raids Dubai Firm’s Office In Abuja

As part of the ongoing probe of the laundering of over $200billion loot in the United Arab Emirates (UAE) by former political office holders, operatives of the Economic and Financial Crimes Commission ( EFCC) yesterday stormed the office of a Dubai property firm, The First Group Company,  in Abuja. The company is also being investigated for allegedly defrauding unsuspecting Nigerians by luring them to invest in real estate in Dubai. A prominent Nigerian lost about...

Dana Air Pilots Go On Strike, Passengers Stranded

Dana Air pilots have gone on strike in protest of the non-payment of their salaries, grounding the airline’s operations and leaving hundreds of passengers stranded nationwide. “The strike started this morning and passengers that were supposed to travel this morning are stranded,” a source at the airport said. According to the source, the airline had continued to sell tickets to passengers earlier today in the hope that the dispute would be resolved.