Senate seeks N30b rice import waiver refund
The Senate leadership, on Wednesday, urged the Central Bank of Nigeria (CBN) and the Nigeria Customs Service (NCS), to immediately take steps to ensure that the N30 billion lost to waiver on rice importation by the last administration was returned to the treasury.
President of the Senate, Bukola Saraki, who gave this advice during an interactive session between the Senate leadership and the CBN management, led by the Governor of the apex bank, Godwin Emefiele, lamented that money that was supposed to get into government’s coffers was allowed to get wasted in the name of waivers. Saraki said:”The CBN governor, we thank you for the briefing.
As you said, it is our belief, particularly that the recent policy you have taken on some selected items, particularly key ones that have to do with agricultural products like rice, chicken, palm oil, and even in the areas of textiles will work. “Our policy is that we, after listening to you, believe that they are steps taken in the right direction, to try to help our economy in the area of import and export substitution. “But one of the observations we also made was that the Central Bank alone cannot make it all work in this area.
We must also show the big signals in things that will bring out the success of this policy. For example, you brought to our notice, the issue of the waivers on taxes and duties especially on rice which is about N30billion that were granted to certain companies. This money must be paid back to the federal government.
We have mentioned this to the Governor of Central Bank. It will be our resolve too after we resume to get the Nigerian Customs 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. We have told the Governor of Central Bank as well.
He should also go and collaborate with the Customs to ensure that this N30billion come back to the government coffers, so that we will be seen to be doing things to make this policy successful.” The Senate leadership also frowned at the increasing rate of smuggling in the country, stating that it would jeopardise all efforts aimed at revamping the economy.
“The second 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.
That area as well, especially the big smugglers that are well known, it is time that this action is taken to stop them”. Thirdly, all other items too that fall under agriculture that we can produce locally, must be reviewed. We also stress the need to also continue to work closely with the CBN by meeting regularly to review the policy, so that we can look at the effectiveness of the policy.”
Saraki said that the Senate was of the view that the issue of fiscal discipline should be taken very seriously. “The key issue is also, fiscal discipline. We cannot de emphasise on it.
The CBN must know those agencies of government that had in the past, not sending revenue straight to the consolidated revenue purse and you must 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.” “Also, there must also be a participation of other organs like the Ministry of agriculture, trade and investment because the CBN alone cannot push this without the cooperation of other organs.
The senate will offer all the cooperation that is required and we have also asked you to let us know if there are specific areas of legislation that you need support for, you let us know them.”
He said that the ultimate aim of the Senate was to ensure that the economy was diversified. ” By and large, the key issues are that we must diversify our economy because that is the policy of President Muhammadu Buhari it is key and all the issues we have raised are moving in that direction and we must bring confidence to our partners and investors that want to come in here.
This is our own country and we must really begin to look at how finally, we can start begin to produce our own agricultural products and begin to talk of mining as well. We are better educated and we will go back to our constituencies where we have a lot of farmers. It is time, that the revenue are not there for us to share among the three tiers.
Earlier, Emefiele informed the leadership of the Senate that three major shocks suffered by the global economy were responsible for Nigeria’s present economic woes which he said the apex bank had made serious efforts to address. Emefiele stated that:”The global economy has experienced three major shocks in the last one year.
These developments include: (1) The significant and seemingly permanent fall in the price of crude oil, Nigeria’s main revenue earner. (2) The end of the quantitative leasing programme of the Federal Reserve Bank of United States of America and (3) The continued US-led sanction on Russia for its annexation of Crimea and Ukraine.”
He disclosed that “In view of these developments, triple growth was sluggish at 3.3 percent in 2014 with only the UK and the US showing only significant signs of a pickup even in 2015” “Despite these shocks, Nigerian GDP increased by 6.2 percent in 2014. However, it slowed to 3.9 percent in the first quarter of 2015 down from 4.9 percent before the last quarter of 2014.”
The CBN boss said Other effects of the global economic shocks, according to Emefiele, include the fact that: “Inflation has crept up to the upper limit of Central Bank range of 69 percent. Import prices inflation rose to 8.9 percent. Inflation rose gradually from eight percent in December 2014 to nine percent in May, 2015.
Reflecting the sharp fall in oil prices and speculative foreign exchange activities, the external reserve declined from $37.3 billion in June 2014 to $29.1 billion at the end of June of 2015.”
Emefiele however said he was “delighted to note that with the strong efforts of President Muhammadu Buhari to block all leakages as well as the Vigilant Management Strategy of the Central bank of Nigeria, we have seen our foreign exchange reserve begin a gradual recovery” According to Emefiele, “As at the 7th of July, 2015, the reserve stood at $31.89 billion, a trend we find extremely gratifying.
Given our understanding that a fall in oil prices transitory but is permanent, and that some speculative activities were ongoing in the foreign exchange market, the CBN took a number of proactive actions.
These include: (1) Further typing of monetary policy, closure of the official foreign exchange window, review of operators’ net open position, placement of 72-hour limit on foreign exchange utilization by customers, introduction of a two-way other based quota system, introduction of a bank-around CBN tentative rate and bank on selective items from assets to foreign exchange.” “These policies have led to significant stabilization of exchange rate and an improvement on the market sentiment, having earlier traded at as high as N206 to a dollar.
The naira to dollar exchange rate has appreciated and remained around N197 to a dollar in the interbank market in the last five months. As regards the issues that currently confront our nation, is the need for us to diversify the structure of our economy from being import dependent to being an economy that produces what we should consume.”
The CBN boss further assured that the apex bank would continue to take steps to stop speculators from working against the nation’s reserve. He said:”The Central Bank will continue to be vigilant in the market to ensure that there is no tolerance for speculators.
Nigerian foreign reserve remain our common wealth and we must all strive to work together to protect this and prevent speculators and ruin seekers from plundering it.
We will continue to find ways to rebuild our reserves and where possible, accelerate efforts aimed at improving adequate supply potentials of the economy. In this efforts, I strongly crave the support of the leadership of the Senate as we match towards achieving the more prosperous and self-sufficient Nigeria.”