Waivers: Senate wants N30bn recovered from rice importers

The Senate on Wednesday asked the Central Bank of Nigeria to collaborate with the Nigeria Customs Service for the purpose of retrieving about N30bn in
waivers granted by the President Goodluck Jonathan administration to some firms but used to fraudulently import rice into the country.

Senate President, Bukola Saraki, stated this while briefing journalists after a three-hour meeting between the upper chamber and the management of the CBN, led by the Governor, Mr. Godwin Emefiele.

Saraki explained that the meeting deliberated extensively on the specific steps needed to be taken in order to diversify the nation’s economy from import dependence to export oriented, with priority given to locally produced agriculture and textile products.

He said, “We must also show the big signals in things that will bring out the success of this policy; for example, you (CBN team) brought to our notice the issue of the waivers on taxes and duties, especially on rice, which is about N30bn, that were granted to certain companies; this money must be paid back to the Federal Government.

“We have mentioned this to the governor of the central bank. It will be our resolve too after we resume to get the Nigeria Customs Service to act on this. Even before that, we cannot be taking some of these top positions, while some people will get away and will not pay what they are supposed to pay, what they should return to government.
ADVERTISEMENT

“We have told the governor of the CBN as well that he should go and collaborate with the Customs to ensure that this N30bn comes back to the government coffers so that we will be seen to be doing things to make this policy successful.”

Saraki explained that the President Muhammadu Buhari administration was committed to the policy of import substitution, which was intended to encourage local production of some selected items like textiles and agricultural produce like rice, chicken and palm oil.

He said the policy was a right step to help the economy in the area of import and export substitution and pledged the support and cooperation of the Senate in that regard because the CBN alone could not make it to work.

“Secondly is the issue of smuggling, because no matter how good this policy on import substitution looks, if smuggling can still be going on the way it is now, this policy will not be successful,” the Senate President added.

He said the embarrassing level of smuggling being perpetrated by big time and known smugglers must be curtailed in line with the current administration’s zero tolerance for corruption.

Saraki also said that both the Senate and the CBN would be meeting regularly to review the policy in order to monitor its effectiveness.

He said, “The key issue is also fiscal discipline; we cannot de-emphasise it. The CBN must know those agencies of government that had in the past not been sending revenue straight to the consolidated revenue purse.

“We must all play a role in ensuring that this is done because a lot of agencies are used to this act of impunity and it is the time that we must play a role that these agencies bring the money back.

“We have seen that there is a slight increase in the amount in the foreign reserves due to that level of fiscal discipline and this must be sustained.”

He added that there must be participation by other organs of government like the ministries of Agriculture and Industry, Trade and Investment in the implementation of the policy because the CBN alone could not push it through.

Emefiele, had while briefing the senators, said the economy had experienced three major shocks in the last one year.

These, according to him, are the significant fall in the price of crude oil; the quantitative easing programme of the Federal Reserve Bank of the United States; and the continued US-led sanctions on Russia for its annexation of Ukraine.

In view of these developments, Emefiele said that the growth of the economy was sluggish at 3.3 per cent in 2014, with only the United Kingdom and the US showing significant signs of a pick-up this year.

Despite the shocks, he said the Nigerian Gross Domestic Product increased by 6.2 per cent in 2014.

However, the CBN governor added that the economy slowed to 3.9 per cent in the first quarter of 2015, down from 4.9 per cent in the last quarter of 2014.

Emefiele said, “Headline inflation remained stable throughout the year although it has crept up to the upper limit of the central bank range of 69 per cent. Import prices inflation rose to 8.9 per cent. Inflation rose gradually to eight per cent in December 2014 to nine per cent in May, 2015.

“Reflecting the sharp fall in oil prices and speculative foreign exchange activities, the external reserves declined from $37.3bn in June 2014 to $29.1bn at the end of June of 2015.

“I am delighted to note that with the strong efforts of President Muhammadu Buhari to block all leakages as well as the Vigilant Demand Management Strategy of the CBN, we have seen our foreign exchange reserves begin a gradual recovery.

“As of the 7th of July, 2015, the reserves stood at $31.89bn, a trend we find extremely gratifying.”