When the current economic management team of the Jonathan Administration took office to manage the Nigerian economy, they vowed to check presidential arbitrariness and impunity with which waivers and concession were being dished out to party faithful. Dr. Mrs Ngozi Okonjo-Iweala while briefing journalist in Washington after the IMF/World Bank meetings in 2011 said that the team has told the President that waivers and concession will only be given to sectors and not individuals. Two years down the line, Dr. Okonjo-Iweala from whose office waivers are granted seems to have forgotten her promise to the nation.
Today all manners of politicians are granted waivers. The most recent which is tearing the economy apart are the waivers granted to a few highly placed individuals by the Federal Government of Nigeria to import refined vegetable oil, Soya bean meal and related products. The government has continued to grant waivers to few individuals as political patronage to party members and loyalists. One of such waivers was granted to a company with reference number BO/R.10260/107 to import 250, 000 metric tons of refined vegetable oil to supposedly cushion the effect of climate change and floods. In another of such waivers, the letter from the Finance Ministry to the Comptroller-General of Customs, with reference number BD/FP/TT/42/G/I/214 read among others, “In order to cushion the present effect of the scarcity and high price of essential raw materials for feed production in the country, His Excellency, Mr. President has granted approval for a concessionary rate of 0 per cent duty and 0 per cent VAT on importation of Soya Bean meal for poultry consumption by poultry farmers with effect from 1st March to 31st December 2013.” An official of the Nigeria Customs Service, NCS, in Apapa ports said that rate of waivers NCS receives monthly is mind bugling and that mostly the beneficiaries are party faithful and bigwigs.
This singular act of arbitrariness in managing the economy has put local vegetable oil and other associated manufacturers on the verge of total extinction. Ever since the return to democracy, one of the major challenges faced by entrepreneurs in Nigeria is the arbitrariness and impunity that characterised the management of economic policies. To say the least import duty waiver and undue concessions is an abuse of office.
Waivers in particulars are detrimental to the economy in a number of ways. It creates a condition of unfair competition, giving one economic player an edge over the others. It leads to huge revenue loss to government. Even the Customs high command has severally lamented the adverse impact of waivers on revenue.” Yet, managers of the Nigerian economy, on election years grant waivers to political businessmen who flood the market with products that can best be produced within the country all in the name of making quick money for electioneering spending.
This mindless act results in the perpetuation of a rent economy and weakens the moral authority of the political leadership to curb corruption since waivers is a variant of corruption. It is incredible that this is happening as only about a year ago the Coordinating Minister of the Economy, Dr. Ngozi Okonjo Iweala, assured the nation that government has put a stop to waivers; and that if it becomes inevitable, it would be sector wide, not for a single company.” The irony of this pathetic situation is that while the Federal Government openly and publicly speaks of its resolved to encourage local industry, in secret and under closed doors, it gives waivers to political associates and cronies to import and make cheap money, undermining local production.
The Federal Government only recently through the Federal Ministry of Agriculture stressed it’s determination to encourage local industry, declaring that it remained resolute on the high tariff of 35 per cent import duty imposed on Crude Palm Oil, CPO, to grow the agricultural sector and the economy. The government spoke through the Minister of Agriculture, Dr AkinwumiAdesina, during a visit by the Coalition of Oil Palm Value Chain Associations, including the National Palm Produce Association of Nigeria, NPPAN, the Oil Palm Growers Association of Nigeria, OPGAN, the Plantation Owners Forum of Nigeria, POFON, and the Vegetable & Edible Oil Producers Association of Nigeria, VEOPAN, who came to advise against lifting or reducing the 35 tariff on CPO. But politicians and political office holders use their cronies in the food sector to agitate insufficiency of oil palm produce in the country, calling on government to lower the import duty on the product.
They claimed the tariff was “inhibiting the growth of multiple industries, including biscuits, vegetable oil, margarines, cereals, crisps, sweets and baked products, washing powder and cosmetics,” and that it would create ripple effects on multiple industries and, in the long run, cause higher food retail crisis. These faceless stakeholders in the food sector are tools in the hands of self seeking politicians to sabotage the economy. Many as fronts have established tank farms in three Nigerian ports of Lagos, Port Harcourt and Calabar to import palm oil from Malaysia. A nation with high rate of youth unemployment can not travel this economic route. It is either that Dr. Okonjo-Iweala or his team has lost out in the power game at Aso Rock or the President is simply dancing a discordant tune to PDP members. Either way Dr. Okonjo-Iweala should exit this mindless government and keep her integrity and respect intact.