World Economic Forum on Africa: FG loses N1bn on import of 290 cars

Government records made available to Daily Trust on Freedom of Information Act request show that the tax break was approved by the president himself in February ahead of the three-day WEFA, held in Abuja from May 7 to 9.Although Globe Motors received the import duty waiver of N991.59 million to import the cars for the […]

Government records made available to Daily Trust on Freedom of Information Act request show that the tax break was approved by the president himself in February ahead of the three-day WEFA, held in Abuja from May 7 to 9.
Although Globe Motors received the import duty waiver of N991.59 million to import the cars for the WEFA, the company retained ownership of the cars after the event, according to officials involved with the project. The officials said the cars belonged to Globe Motors in the first place, as government only granted the tax break but did not spent any money in procuring the cars.
The Federal Government had come under strident criticism from the National Assembly for alleged misuse of import duty concessions, which led to the loss of N1.4 trillion in three years.
But government had defended the waivers, saying they were given in strict compliance with existing regulations and did not amount to losses for the public coffers.
In April the Auto Manufacturers Association of Nigeria had raised concerns over alleged grant of waiver for an unnamed company to import cars for the World Economic Forum on Africa.
Records provided to Daily Trust by the Federal Ministry of Finance now show for the first time that Globe Motors is the company that secured the deal.
The documents show that President Jonathan approved the waiver of N991.59 million to “Federal Capital Territory Administration/Globe Motors” under the “Provisions of Part 1, item 11 (1) (a) of the CET 2008 – 2012.”
When Daily Trust sought to know what happened to the 290 cars after the WEFA, the Chief Economic Adviser to President Jonathan, Mr Nwanze Okedigbe, said the cars had been taken back by the company that imported them.
He said the cars were provided for the WEFA on the understanding that the company would take them back after the event. He did not name the company involved, though the Finance Ministry records show Globe Motors as the importer.
Okedigbe, whose office was involved in coordinating the WEFA, said the Federal Government did not spend any money on the importation of the cars.
“The government didn’t import these cars and didn’t spend a dime on them. A company imported the cars with the understanding that the company would make them available to be used for the World Economic Forum and take them back. So, after the event, the company took them back,” he told Daily Trust on Wednesday.
Another official involved in the project told Daily Trust that the cars actually belonged to Globe Motors which was given the import waivers so that they would provide the cars for the WEFA event and then take them back.
Attempts by Daily Trust to get details of the deal from Globe Motors were not successful, as the company’s managing director Mr Victor Oguamalam declined to discuss the matter with our reporter yesterday.
When a Daily Trust reporter called by telephone, Oguamalam demanded to know what the interest of the reporter was in asking about the imported cars. He then terminated the phone call.
This is not the first time government would grant import waivers for a car company to provide vehicles for a conference.
In 2012, Coscharis Motors provided 200 exotic cars for the 7th African First Ladies Peace Mission (AFLPM) summit, and raked in millions from import waivers. The summit held in Abuja from July 24-27, 2012.
The alleged abuse of import waivers led the Nigerian Customs Service to complain to federal lawmakers that the process was causing the loss of billions of naira to the government.
Up to N1.4 trillion has been lost through concessions and waivers in the past three years, according to Customs documents seen by Daily Trust. The Customs documents show that N480 billion was lost in 2011; N480 in 2012; and N474 in 2013.
But the Federal Ministry of Finance had told the House of Representatives that only N170 billion was lost in import duty exemptions during the period. It also explained that the concessions did not amount to losses, as they were part of a government policy aimed at supporting certain sectors of the economy.