In the last three years, Nigeria lost a staggering N1.4 trillion on import duty waivers – not N171 billion as claimed by finance minister, Ngozi Okonjo-Iweala – and lost hundreds of billions of naira more as authorities recklessly granted import/export incentives on unapproved goods from rice to fish to kolanuts, with no significant bearing on the economy, according to a Nigeria Customs Service (NCS) report obtained by an online newspaper, Premium Times.
Comparing the government’s export grant to the well-abused fuel subsidy, the Customs said more than 65 percent of beneficiaries received the grant for goods not approved by the government, which ordinarily should be limited to raw materials, machinery and spare parts, the online medium stated.
It claimed that recipients of the export grant hold an instrument called Negotiable Duty Credit Certificate, NDCC, which they use in the payment of import and excise duties.
It further reported that a new memo signed by the Minister of State of Finance, Yerima Ngama, and dated December 11, 2013, now says the federal government has expanded the scope of the NDCC to cover “other goods,” a decision, Mr. Ngama said was reached by the Federal Executive Council, FEC.
Warning of possible further abuse than already recorded, the Customs service spoke of being “apprehensive” about the purported directive and said it was yet to see the original approval by FEC.
“If the ‘other goods’ are those that can contribute to the growth of the economy, the Service will have no quarrel. But when ‘other goods’ are in most cases those that will not contribute to the economy, the Service becomes apprehensive,” the Customs said in the document that highlights abuse in the administration of waivers.
It cited such questionable goods intended to be covered by the new rule as “automobiles (bullet-proof), rice, fish, etc. “Over 65 % of NDCC accepted by the Service are found to have been used for such goods,” it argued.
The details of government losses to waiver provided by the Customs Service, show how the total cost on the federal government differs significantly from the figure declared by finance minister, Mrs. Okonjo-Iweala.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.