CERTAINLY, a cancellation of the odious regime of import duty waivers which for years, has undermined the Nigerian economy would be one laudable step, amid a flurry of current reforms, towards attaining sanity. The much abused policy which has been handled as an exclusive licence for a few politically connected individuals is a disservice to Nigeria. Putting an end to it would be an advertisement of the seriousness with which the present government views Nigeria’s economic situation and how to reposition it.
The decision is also good considering the lack of transparency that have attended the policy on concessions, grant and waivers as some of the instruments actually violate anti-trust laws and damage the economy.
Official claims of N585 billion lost to waivers between 2011 and 2015 are only indicative of a mindless regime of profligacy and corruption. However, the government must think fast and hard of a more beneficial and acceptable mechanism open to manufacturers and industrialists for the promotion of local production.
Indeed, the inconsistencies in reported figures are illustrative of the mystery in which the processes have been shrouded. For economic impunity of that magnitude to have lasted so long, turning it into a tool that protected businesses and jobs abroad while damaging Nigeria’s economy, is testament to poor leadership.
In other climes, waivers are seen as a mechanism for achieving set economic goals such as protection of local industries, job creation, export promotion as well as generation and preservation of foreign exchange. China, India, Malaysia, Japan and many other economies have at various times used waivers, concessions and grants to protect and build local manufacturing and agriculture. Sadly, none of such objectives has been met in Nigeria. Nonetheless, the interest of local producers must be defended if the country would make any breakthrough or progress.
Statistics showed that in 2007, the 1,843 beneficiaries of waivers caused about N165 billion loss to the economy. The highest amount of N42.598 billion was recorded in 2007; in 2006, waivers stood at N19.379 billion; N41.650 billion (2005), and so on.
In 2014, former finance minister and coordinator of the economy reportedly declared a loss to import waivers and tax holiday concessions of N797.8 billion between 2011 and May 2014, N25.814 billion of it in the first five months of 2014 alone. Figures attributed to the then Comptroller-General of the Nigeria Customs Service (NCS) quoted N276.9 billion loss between 2000 and 2008. That sharp progression is instructive.
The Buhari administration’s resolve, therefore, to shore up revenue from all accruable sources, including savings from duty waivers, should be well implemented to block this loophole that benefits only a few. Relevant collection agencies must be allowed free hand to explore all avenues, especially in the face of shrinking cash reserves from the slump in global oil sales and prices. The Federal Inland Revenue Service’s pledge to rise to the revenue challenge towards raising N4.95 trillion in a year is commendable too.
Indiscriminate granting of waivers, concessions and grants is undesirable and has perhaps affected the agricultural sector more, especially rice production. Goods like palm oil, vegetable oil, energy equipment, steel and others have also featured in the ignoble list. Worse still the system has been too corrupted, some beneficiaries are known to sell duly-approved waivers for essential goods to importers of cars or other products that are of little or no benefit to the economy. Unfortunately, some defaulting companies in duties and levies to the Federal Government, notwithstanding their conduct, even got fresh waivers to import more in an era of impunity where monitoring was zero and the system was run without conscience.
This abuse got an official mention in 2015 at the Senate following a passionate submission by Senator Ibrahim Gubir. The upper chamber then decided on an ad hoc panel for a review to ensure full recovery of all government revenue related to the policy. Regrettably, as in most other investigations, the report has not been made public. The National Assembly should in fact complement the executive arm of government to end this obnoxious regime.
At this point, a clearer policy is required on controversial policies like import duty waivers, grants and concessions in the economy. An economy that favours foreign companies at the expense of local ones is unacceptable. A regime of favours for economic cartels and selfish barons should have no place in the Nigerian economy.