A needless N26 billion loss

Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo-Iweala, has been unusually quiet of late. I think the last time I heard of her was March 4 when she warned that 2015 would be a brutal year for the Nigerian economy.

The former World Bank Managing Director, who had been under series of attacks by the opposition party and Nigeria’s lower legislative chamber told The Banker during an interview that with the country’s election looming, 2015 would be a tough and brutal year in maintaining a strong macroeconomic performance for the country.

The finance minister admitted that she would be targeted by opposition politicians jostling for power ahead of elections in February 2015 and keen to denounce the government’s economic policies.

In her usual candour, she said there would be extreme bashing of her personality and “somebody has to be the scapegoat.”

She said investors will be watching Nigeria closely to see that its reforms and its fiscal and monetary record do not unravel in the run up to voting.

Since that interview, the Minister has decided to go under. I suppose she took a break and prepare for the extreme bashing she predicted. She was conspicuously absent at the 20^th Nigeria Economic Summit held in Abuja last week.

The Minister’s absence is taking a toll on the maritime industry.

I learnt that since she was not around, funds have not been released to the Nigerian Shippers’ Council to enable it commence execution of its new role of port economic regulator. I understand the Council had to resort to borrowing funds from the bank to enable it carry out even its normal day to day operation.

Before suddenly disappearing from the scene, Okonjo-Iweala had sent out a very strong signal to the trading community when sometimes towards the end of February, she announced that government was planning to reverse the 110 per cent import duty on rice. The news was received with ovation especially in the maritime industry largely due to the adverse effect the unpopular policy has had on the shipping sector and the entire Nigerian economy.

The Minister practically echoed the cries of Nigerians when she admitted that the policy had failed. She told members of the Manufacturers Association of Nigeria (MAN) in Lagos that the rice policy had promoted smuggling. That is exactly what Nigerians have been saying since last year but she didn’t listen! Otherwise why did it take her and her fellow cabinet members over a year to come to this realisation? Did they lose touch with reality or have the walls of the council chambers become too thick that they no longer hear the voice of the people? Or is vox populi no longervox dei to our political leaders?

Speaking a few days after the MAN meeting in Abuja, Okonjo-Iweala again reiterated her position. She said due to its adverse effect on the economy, she would meet with President Jonathan and her counterpart in the Ministry of Agriculture, Akinwunmi Adeshina, to rework the policy which is costing this country about N1 billion every day.

She admitted that the tariff on imported rice was increased to 110 per cent to encourage Nigerians to farm and grow rice “but it also encouraged smuggling from neighbouring countries because they immediately dropped their own tariffs to 10 per cent.”

“For rice, we decided to bring it down because we see that it is not working,” she said.

It is exactly 26 days today since the Minister admitted the flaws in her rice policy and for someone who admitted the incalculable damage done to the economy; one would have expected an urgent action of sort, but nay! The Minister is not on seat. And everything has to wait until she is back to work. This is rather sad and unfortunate. It does not portray seriousness and good governance. It is an anathema to sound economic judgment.

I know of several importers who placed orders and made arrangements for shipments based on that pronouncement but are now stuck in their tracks. Several shiploads of rice also headed towards Nigeria with the hope that the much anticipated announcement would happen before their arrival. They were disappointed and quietly diverted to neighbouring countries.

Need I remind the Minister that reversal of the loathed policy should be quickly and immediately done? The price of delay is N1 billion every day. It represents the amount lost by both government and the private sector.

Importers of rice and shipping lines no longer come to our ports. Rice was a major commodity at the Lagos Port Complex Apapa but the general cargo terminals have dried up.

Nigeria lost all her rice shipments to the ports of Cotonou and Douala last year due to the policy. The ships that should come into our ports all diverted to these neighbouring ports and the commodity is smuggled in bits and pieces into Nigeria while customs officials look the other way.

Madam Coordinating Minister, please come back to your seat and quickly hold that urgent discussion with the President. I hope we will hear the announcement that import duty on rice has been slashed to 10 per cent with additional 50 per cent levy; effectively bringing the duty to 60 per cent, this week.

And if you’re not planning to resume anytime soon, the issue is actually a simple one. Put a call through to Mr. President and set up a conference call with the Minister of Agriculture. Discuss and agree on the new tariff and ask one of your aides to announce it to the world. It is that simple and you will be surprised at how much trouble you will be saving yourself and the economy of this nation.