Waivers: Senate uncovers N447bn fraud

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A report released by the Senate has shown how Ministries, Departments and Agencies (MDAs), in connivance with some private firms, swindled the Federal Government of the sum of N447.4 billion through import duty waivers and concessions.
Consequently, the Upper House has vowed to recover the money from the affected MDAs and companies.

The frauds were committed between 2011 and 2015.

The revelation was
made at the Senate plenary on Tuesday, during the presentation of the report by the Chairman, Senate Adhoc Committee on Import Duty Waivers, Concessions and Grants, Senator Adamu Aliero.

The report followed an investigation by the Senate panel on a motion moved in January 2016 by Senator Aliero on the massive fraud by corporate bodies and MDAs within the period under review.

The Senate subsequently set up the adhoc committee to investigate the claims in the motion and report its findings.

According to Aliero, in 2011 the sum of N78,489,941,114.74 was lost through waivers, concessions and grants to private companies which were engaged in the import of goods into the country.

In 2012, the government lost N128,538,453,758.99. Similarly, in 2013, the Senate report claimed that the figure was N46,056,265,355.78 while in 2014, the amount was N87,654,744,360.22.

According to Senator Aliero, former President Goodluck Jonathan led Federal Government approved N106,711,892,098.14 as waivers, concessions and grants to private companies in 2015 alone.

He lamented what he described as large scale revenue leakages that robbed government of huge sums of money that would have been used for the provision of infrastructural development and social services.

The chairman blamed the flagrant abuse of the process on lack of synergy among MDAs charged with the responsibilities of administering import duty waivers, concessions and grants.

He specifically named the Federal Ministry of Finance, Nigeria Customs Service (NCS), Federal Ministry of Industries, Trade and Investment, Nigerian Export Promotion Council (NEPC), Federal Ministry of Agriculture and Rural Development and the Federal Inland Revenue Service (FIRS) as agencies responsible for the loopholes.

"Customs duty waivers and concessions have been used by the Budget Office of the Federation to entrench a very destructive patronage system to our economy, whereby very few operators in the economy were singled out for favours, resulting to unfair competition in the system," Aliero noted.

Speaking specifically on waivers granted to importers of rice, Aliero said a total of 27 companies benefited from the scheme with a total allocation of 1,434,658 metric tonnes.

He said four companies were yet to remit N23.603 billion to the Federal Government.

In the sugar sector, an estimate of N17.41 billion was lost to waivers, concessions and grants between 2011-2012 alone.

In the automobile sector, the committee report claimed that the then Minister of Industries, Trade and Investment, Olusegun Aganga, granted waivers to Coscharis Motors to import 897 vehicles in 2015, while Globe Motors got a waiver to import 714 vehicles the same year.

In its recommendations, the committee identified 22 priority areas and recommended that the system be strengthened by reviewing the relevant laws.

It further recommended that the Federal Government restructure and streamline the functions and responsibilities of the Budget Office of the Federation to prevent it from further abuses and excesses in the import duty waivers, concessions and grants process.

The committee urged the Federal Government to ensure that in the future, government contractors do not enjoy duty waivers.

"The Federal Government should impose severe sanctions against companies found to have benefited from import duty waivers, concessions and grants, but at the same time engage in acts of economic sabotage by diverting some vessels to neighbouring countries of Benin and Niger Republics for the commodities to be smuggled into Nigeria through land borders," the report further recommended.

Accordingly, the Senate has mandated relevant agencies of government to recover N10.3 billion from six companies that benefited from rice importation quota in 2014.

According to the Upper Chamber, the six companies did not meet the criteria for granting the waivers.
Meanwhile, Senate Leader, Senator Ali Ndume, has denied claims that the probe is targeted at former president Goodluck Jonathan.

He said lawmakers were after what was done wrong during the period under review and not the occupant of the office of the president.

Earlier, Senate President Abubakar Bukola Saraki had directed relevant committees of the Senate to monitor the progress made by the Federal Government in recovering the monies and report back to the chamber.

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