Duty Waiver Scandal Revealed(2) :The gap between theory and practice —2

on   /   in Business 12:27 am   /   Comments

By DELE SOBOWALE

“In addition some waivers and exemptions make up the gaps in our economy; for example waivers to bring in vehicles for sporting events and conferences.” Dr Ngozi Okonjo-Iweala

Typical of Dr Ngozi Okonjp-Iweala, she provided no evidence that those sporting events or conferences would have been scrapped without granting those waivers. I live and work in Lagos and even watched some of the events; I saw the vehicles bringing sports people, officials and media. I cannot remember seeing a vehicle which could not have been available without Duty Waiver. Perhaps somebody will, after this article, show me one.

Today, Nigerians and the international community know that part of the unnecessary Duty Waiver granted to the Lagos State Government to import buses for the Lagos State Sports festival ended up being used to import vehicles by a company to procure bullet-proof vehicles for the Ministry of Aviation. That fact, already established, should tell anyone with any grain of sense, that Dr Ngozi’s theoretical pronouncement on the objectives and actual uses of Duty Waiver is a lot of baloney.

The truth, which she had conveniently failed to acknowledge, is that once she and the President sign on the dotted line to allow individuals (and it is often more of the individuals than companies) they represent, to import anything duty-free, government loses control over the eventual outcome. Instead of agricultural equipment limousines are imported with falsified waybills. Invariably, it turns out to be a matter of robbing 160-170 million Nigerians to pay one person and his close associates and inevitably results in obscene gifts to government officials whenever they have anything to celebrate.

The intellectual bankruptcy entailed in what she had been defending can be illustrated by one example from the first part of this series, specifically, the duty free import licence granted to Dangote Industries to import tomato paste for two years. Unless another government publishes the details of this particular agreement, it amounted to giving Dangote Industries a MONOPOLY on the importation of that particular commodity to the Nigerian market. Which other importer could have competed successfully with Dangote, after paying the appropriate duty on their imports of tomato paste?

Furthermore, having given two years moratorium on the imports, duty-free, the government officials involved must be imbeciles not to know that the company granted the concession would, towards the end of the period, import more than it needs for two more years, warehouse them and continue to enjoy the benefits of duty-free importation for more years than the two they wrote on paper.

More to the point, one would have expected our former World Bank Managing Director, to show proof that all the waivers granted, when she was Finance Minister, actually yielded the benefits the government expected of them. Shockingly, there was no proof that the N52bn-plus, she and Obasanjo “dashed” out in 2003/4 actually proved to be good returns on investment. Is that the way the World Bank works? If so, may be all the nations of the world should agree to close it.

Nobody should know better than Dr Okonjo-Iweala, from Economics 1a, at Harvard, that every MONOPOLY means that the people pay more than they should if a free market exists. But, here, government had deliberately handed the millions of Nigerians to a company/individual to be exploited without remedy – on tomato paste.
Worse still, the two years’ monopoly granted under that Duty Waiver agreement, unless it includes a limit on how much Dangote Industries could import, had, more or less, granted the company unfair competitive advantage over all importers of tomato paste, for several years beyond two, not only in ECOWAS but in a wide segment of Africa south of the Sahara.

At least we know that goods from Nigeria dominate ECOWAS markets. How would tomato paste importers in ECOWAS, who paid duty compete with a Nigerian company which paid none? Even, a destitute, given the monopoly of tomato paste today will be riding a private jet in less than six months from now. Okonjo-Iweala is being economical with the truth many ways on this matter.

First, she had  abandoned all the principles of economics by not admitting that Duty Waiver is a subsidy to a few people and that it distorts the free market mechanism; and that, generally, the beneficiaries are those well connected to top officials in government. Second, her claim that the exemptions are accessible, to all those in the business sector, is a bloody lie.

How many churches or mosques received  exemptions to import jeeps, cars and buses, other than Redeemed Church? Meanwhile, one company, alone had been a perpetual recipient of waivers since Obasanjo came to office till today. Yet, it competes across several sectors. Why? Government should publish the list of all the recipients of the waivers to enable Nigerians to determine for themselves if that claim is true.

But, before she provides the list, she should know that there are at least a dozen major food processors, needing tomato paste for their products, got next to nothing. She has the records from 2003, when she first came on board as the Finance Minister; she should publish the list of recipients for each year for Nigerians to see who the beneficiaries are. Third, before she does more harm to her reputation, she should stop thinking well and behaving badly.

Certainly, she still has friends in the World Bank; but she is not the only one who has sources in the World Bank. Her friends would not tell her the truth regarding how much of a disappointment she had been since 2011. But, other professionals will be too glad to tell her how far she had climbed down the greasy pole of prominence.
Four, she better understand this, the 2014 National Assembly, NASS, is different from any she had ever faced before.

She cannot sack them, because this is a democratic republic, despite all the attributes of a banana republic. She will go; not the entire NASS – as the President had demonstrated with Alhaji Tukur; in order to protect himself. To be quite candid, Dr Ngozi must be the only person left in Nigeria, and perhaps the whole world, who still thinks she is indispensable. On that note let me close this two part series by reminding her of the words of one of the titans of the last century.

“The graveyards are full of indispensable people” Charles De Gaulle, 1890-1970. World War II General and President of France from 1959-1969.
No disrespect intended to her as a person and the office she occupies, which is vital to our present and future as a nation. But, Mrs Ngozi Okonjo-Iweala must recognize that the country must move on without her, sooner or later. She has tried her best; but the best is just not good enough. Nobody is indispensable.

 

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