Waiving prosperity

All the electoral promises of fresh air and national transformation have dwindled into mere transformation of the personal fortunes of Presidential cronies and business collaborators. While ordinary Nigerians suffer the pains of collapsed infrastructure and deepening poverty, federal government continues to “dash” away money in waivers which do not contribute positively to national economic prosperity […]

All the electoral promises of fresh air and national transformation have dwindled into mere transformation of the personal fortunes of Presidential cronies and business collaborators. While ordinary Nigerians suffer the pains of collapsed infrastructure and deepening poverty, federal government continues to “dash” away money in waivers which do not contribute positively to national economic prosperity and only benefit a selected group of people. When the idea of import duty waivers was first mooted during the Shagari administration in the 1980’s the objective was to boost local industries, ensure the availability of raw materials and boost employment. In the ensuing decades despite industrial decline, massive unemployment and failure to achieve these goals, granting import duty waivers has proceeded with reckless abandon.
Government officials continue to brazenly abuse the system granting illegal and indiscriminate approvals to undeserving firms and individuals.  The practice in most countries is that duty waivers are either legal whereby the law defines duty free goods, or economic where government fiscal policy determines the temporary reduction of duty. In Nigeria we have so called “political waivers” under which the Federal Government “waives” goodbye to billions in revenue which should have been used for development. These waivers are granted as compensation and reward to political godfathers, loyalists, associates and other cronies or as gifts to friends of people in the corridors of power. Under normal circumstances government is supposed to make sure waivers are of benefit to the economy and only granted in cases where it is established that failure to do so would be detrimental to the economy. Paradoxically today’s waivers are killing the economy because they being used to bring of finished goods into the country and are habitually issued for purely business enterprises that will not pass on the benefit to Nigerians.
 This abuse of the waivers has become routine as politicians and businessmen continue to collude to undermine the nation’s economy through fraud. Indiscriminate granting of import duty waivers is not only a drain on the nation’s resources; it undermines local manufacturing and concentrates the commonwealth in the hands of a privileged few.  Reported beneficiaries of dubious waivers include Dangote Industries, Vaswani, Coscharis Group, Stallion Group, Le Meridian, Grand Ikoyi Towers & Resort, Federal Palace Hotels and The Redeemed Christian Church of God (RCCG) among others.  Reports exposed the fact that the duty waiver granted RCCG was used “dishonestly” to aid and abet church members to defraud the nation by not paying the requisite importation fees. In another celebrated exposé, former Ogun State Governor Gbenga Daniel was linked to a N500millon import waiver scandal when in 2005 waivers approved for vehicles meant to be used in the 15th National Sports Festival were sold to Globe Motors. Among the most glaring examples of waiver fraud is that of an engineering company granted a waiver to import rice. Nothing could have informed such an approval other than patronage for individuals and companies belonging to campaign fundraisers and cronies. Those in the know say that the main benefit to government of duty waivers is that the money is paid back as political donations or into private bank accounts to fund political campaigns.
 The Dangote Group of Companies whose chairman is regularly seen in the company of the president is alleged to have acquired over 50% of the waivers granted. This would explain the paradox of how a country which produces nothing of significance and imports almost everything it consumes can boast one of the richest men in the world. There are also reports that the Presidency waived over N100 billion worth of import duties to the Vaswani Brothers who are a purely business concern engaged in importation of consumer goods and there is no record anywhere to indicate that they passed this huge savings on to their Nigerian consumers. Although the Coordinating Minister for the Economy, Mrs Okonjo-Iweala admitted that past abuses had allowed waivers to be awarded to private individuals, she said under her leadership reforms which ensure greater scrutiny of applications have since been put in place.  

According to her, those who “usually go to see the President at night” will no longer have reason to do so as applications must now be approved by her Economic Management Team (EMT). Despite the efforts of the EMT, records at the Nigerian Customs Service (NCS) show that abuses continue. The Minister herself admitted as much when she described as “reprehensible” the action of controversial car dealer Coscharis Motors in their diversion of a waiver meant for Lagos State Government to import armoured cars for the aviation minister, Stella Oduah. Regrettably this is not an isolated case. Customs officials say more than 65% of waivers subsequently granted by Okonjo-Iweala, and her team was for questionable goods. Specific reference was made to State Governments and government agencies who receive waivers for nearly all of their importations despite not being qualified.  The National Assembly has to accept its share of blame for this continuing scandal. The Constitution clearly gives it power to make laws, approve all public spending and check the Executive if they serially flout the law.  Lamentably they have failed to act despite it being common knowledge that most of the organizations and individuals granted waivers not only misused them, but were never qualified in the first place.  Lawmakers abdicated their oversight responsibilities and did nothing when they discovered that organizations which obtained waivers for vital equipment used them to import furniture, expensive cars, clothing and other luxuries. The continued granting of waivers to favoured friends while denying a large number of people who are prepared to contribute significantly to the economy is not only the height of corrupt practice,  it means the nation is effectively waving goodbye to any chance of prosperity and economic progress.