Don't Miss


Home   >   Business   >   Industries   >   Economy   >   N170.7bn lost to waivers in three years – Okonjo-Iweala

N170.7bn lost to waivers in three years – Okonjo-Iweala

By on January 18, 2014

Nigeria lost N170.73bn to exemptions and import waivers in the last three years, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, has said.

The minister gave the figure in her response to one of the 50 questions on the state of the economy, which the House of Representatives Committee on Finance handed over to her during a session in Abuja some weeks ago.

The committee had directed Okonjo-Iweala to produce a detailed report on the exact amount of money that the country lost to import duty waivers between 2011 and 2013.

She was also mandated to provide the full names of the beneficiaries, what the waivers were used to import and the justification for granting such duty exemptions.

The question on waivers was number 15 on the list, with the committee asking, “How much exactly has been the amount of money lost in government revenue as a result of import duty waivers in 2011, 2012 and 2013?

“In your opinion as the Minister of Finance, who oversees the economy, what are the implications to the country’s economy? What efforts have you made to stop this waiver policy, which is distorting the economy?

“Our non-oil income has dropped in 2013, a case where increased tariffs on various items effectively reduced importation to zero in some sectors. However, those items now find their way into Nigeria through our borders.

“Does it make any sense to increase these tariffs when we have such porous borders? As an example, officially, Togo imported more rice this year than Nigeria.”

But in her response, the minister said exemptions and waivers were incentives used to support the private sector given some of the regulatory challenges faced in the domestic business environment.

To demonstrate this, she said waivers and exemptions of N55.96bn were given in 2011; N55.34bn in 2012, while the 2013 fiscal year had N59.42bn.

The minister said unlike in the past when waivers were granted to individual businesses, which resulted in rent-seeking behaviours and an uneven playing field for other businesses, President Goodluck Jonathan had introduced sector-wide waivers to provide specific incentives for some strategic job-creating sectors.

According to her, the sectors that currently benefit from waivers are the hospitality, power, aviation, agricultural machinery, solid minerals equipment, gas-using equipment, steel and manufacturing.

Okonjo-Iweala said, “There are also additional programmes such as the Export Expansion Grant Scheme designed to promote Nigeria’s non-oil exports. These sectors are seen as strategic areas, which can stimulate growth, support diversification of the Nigerian economy and create jobs for Nigerians.

“In the past, waivers were granted to individual businesses in an approach that resulted in rent-seeking behaviours and an uneven playing field for other businesses.

“It was precisely the need to stop such a discretionary approach that led to the reforms by the Economic Management Team under the leadership of President (Goodluck Ebele) Jonathan.

“A sector-wide waiver policy was introduced to provide specific incentives for some strategic and job-creating sectors. Under this regime, all businesses in a sector have access to the same incentives.

“In addition, some waivers and exemptions make up for gaps in our economy; for example waivers to bring in vehicles for sporting events and conferences.”

Okonjo-Iweala said while the policies would have impacts on tariff revenue collection, a trade-off had to be made between short-term revenue collection and long-term industrial development.

[Punch]

One Comment

  1. Kayode

    January 18, 2014 at 9:12 pm

    The new system of granting waivers to certain sectors to boost the economy and increase employment is a very good idea. Only ill-meaning fellows will be opposed to that. The Finance Minister is really doing a good job.