Economics

Nigeria: The Waiver of Duty and Tariff for 250.000mt of rice has been issued

In Nigeria, the Waiver of Duty and Tariff for 250.000mt of rice has been issued in the name of Network Supplies Limited.  The same sources have indicated that they have another waiver for 250.00mt. This takes the total quantity for which waiver has been granted to 500.000mt.

  1. The monetary value of waiver is as follows

 

  1. Tariff structure for rice is as follows

I           Customs Duty – 10% of CNF Value

II         Rice Levy – 20% of CNF Value

III        Port Surcharge – 7% of Customs Duty

IV        CISS – 1% of FOB Value

V         ETLS – 0.5% of CNF Value

VI        Fed Govt Benchmark for valuation of imported rice is $560 per mt

VII      At $560 pet mt the tariff payable is approx $180 per mt

VIII     The value of tariff waiver for 500,000mt is USD 90Mil or Naira 13.5billion

 

CNF Value Benchmark USD per mt

560

Customs Duty

10%

56

Rice Levy

20%

112

Port Surcharge

7%

3.92

CISS

1%

5

ETLS

0.50%

2.8

Total Tariff in USD per mt

179.72

Total tariff payable on 500,000mt (USD)

 

89,860,000

     

Total tariff payable on 500,000mt (Naira)

151

13,568,860,000

 

  1. There is a letter from the applicant addressed to the President. Dated July 2010, commending him for his policies and seeking his approval for waiver of duty and tariff on imported rice in order to mitigate the adverse effect of climate change and to supply rice at affordable price to Nigerians.
  2. The President has approved this request.
  3. Following the approval from the Presidency, the office of the Budget Office of the Federation has issued a circular confirming the waiver of duty which has been issued to Nigeria Customs Service and Inspection agencies. These are in July and August 2010. Nigeria Customs Service and inspection agencies can confirm this information.
  4. There is no commitment or obligation on the part of the beneficiary on what they will do – what price they will sell, what profit margin they will keep or what activity they will undertake – in return for obtaining the benefit of USD90mil by way of not paying the tariff on rice to be imported.
  5. Network Supplies Limited has never imported or distributed any rice in the past – it seems that it may have been specifically created to execute this transaction.
  6. The people behind the Network Supplies Limited are SPOG Group (Sea Petroleum and Gas Group) Which is owned and controlled by Chief Omokoro.
  7. From the information available in the local and domestic market, the people who got this waiver from the Presidency, have sold this paper to Stallion Group (Vaswani Brothers – Sunil and Mahesh Vaswani). They are the controversial people who have been investigated and deported twice from this country (under the Obasanjo and Yar-Adua administration) and yet they manage to stage a comeback each time.
  8. If the bag marks on the rice to be imported against this concession is going to be those that are registered by Stallion Group then it will establish the nexus between the two.
  9. It is instructive to note that this concession is completely contrary to the tenets of Due – Process and Transparency & Accountability – the issue that needs to be resolved/answered are
  1. If the Fed Govt wants to provide a benefit or assistance of almost USD90mil – Why was it not made public/open to all parties interested (it is instructive to note that in 2008 – when the food prices skyrocketed globally including Nigeria – the Fed Govt announced a waiver of all tariff on rice importation for ALL IMPORTS – for a period of 6 months
  2. There is no definite commitment or obligation imposed on the beneficiary of this concession – so it is almost a ploy to put $90mil of Fed Govt money into the hands of some people without any clear or evident benefit.
  3. This action is a clear punishment to legitimate importers of rice who have acted in conformity with the laid down rules and paid full duty and tariff on their imports and who are now faced with a loss of $180 per mt on their stocks.

 

Anthony-Claret Onwutalobi
Anthony-Claret Onwutalobi
Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC and CEO of Portia Web Solutions. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
https://www.codewit.com

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