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Reps threaten Adesina over alleged rice import duty waiver

By Terhemba Daka, Abuja
05 May 2015   |   3:34 am
THE ad-hoc committee set up by the House of Representatives to look into the alleged fraud and evasion of rice import duties and levies by importers has threatened to sanction the Minister for Agriculture, Dr. Akinwumi Adesina, for shunning an invitation to appear before the panel’s investigative hearing yesterday.

Delta State Governor Emmanuel Uduaghan (left); his wife, Roli; Minister of Agriculture, Akinwunmi Adesina; Chairman, Innoson Motors, Innocent Chukwuma and Chairman, Silverbird Group, Ben Murray-Bruce,  during the 2014 Silverbird Man of the Year award in Lagos at the weekend

THE ad-hoc committee set up by the House of Representatives to look into the alleged fraud and evasion of rice import duties and levies by importers has threatened to sanction the Minister for Agriculture, Dr. Akinwumi Adesina, for shunning an invitation to appear before the panel’s investigative hearing yesterday.

Chairman of the Committee and Deputy Leader of the House, Leo Ogor, gave the indication in Abuja yesterday after stakeholders accused the Ministry with regards to the administration of government policy on rice importation and payable duties/levies on import quota by investors.

Ogor, in his opening address declared that, “this hearing was sequel to a resolution of the House mandating the ad-hoc committee to investigate alleged fraud abuses and evasion of import duties by rice importers.”

“The aim is to uncover fraud and expose the endemic corruption in the importation of rice with a view to stemming the tide and boost employment generation as well as strengthen the nation’s depleting foreign reserve.

“The minister has no reason not to be here because the ministry was duly served the invitation. I see no reason why people would be invited to a hearing that is for the benefit of the people and will not turn up.

“You are a servant of the people just like we all are. What we are doing here is for the benefit of our nation’s economy so; before the end of the hearing; we are hoping to see people from the ministry come in, otherwise we might be forced to make some very strong pronouncement,” Ogor threatened.

On the administration of quota and duty payable on excess importation, indications were raised, accusing the minister of giving certain considerations to some importers who allegedly exceeded their quotas and did not pay the required indemnity.

The panel queried the powers of the minister to grant such waivers on the basis of encouraging investment and job creation when in actual sense, the practice was capable of discouraging local investors who members said, do not have the capacity to utilise their allotted quota.

“The minister doesn’t have the powers to allocate rice import or production quota to any company and then waive duties because the corresponding revenue involved is for the entire federation which consists of the three tiers of government. The minister should stop deceiving himself thinking that he acts for every tier of government,” he said.

On why the firm failed to pay duty accruals for exceeded quota of over N3.5 billion, Olams Farms Limited, one of the defaulting investors told the committee that as the largest farm owner on the African continent, it couldn’t have grown its business by disobeying the rules, insisting that there was no directive asking the company to pay for exceeding its quota, which, it said only came to fore after the importations had been done.

The firm, represented by Anil Nair, said the company will not hesitate to pay its duty or levy if the government asks it to do so. “Olams Farms is the single largest farm on the continent of Africa with the capacity to import 243, 747 tonnes of rice on 10% levy and 20% duty.

If you look at all the rice value chain, we have made up to date payment of duties and levies as applicable for which we made presentation previously. “If we are asked to pay for the excess in importation, we will oblige and pay without any hesitation,” Nair said.

The Nigerian Customs Service led by Adeoye Ajade had told the committee in a position paper that companies defaulted having been written to after the rice policy was reviewed in July last year.

“Olams import was over 245.000 metric tonnes with excess quota amounting to over N3.5 billion, which is the duty liability arising from that importation.

“Given the review of the policy, rice millers tried to make false declaration of duty value by under-declaring their actual import volume. So the policy review now came with dual rate of 10 percent duty raise and 20 percent levy.

“Since we didn’t know the quota that was going to be allotted to each miller or importer, we wrote to the Finance Ministry to give us the allotted quota so we can know which company to ask for, but we didn’t get any response from the ministry,” he said.

The committee therefore directed that Olams prepare a comprehensive document showing details in clear tabular form for easy correlation. Meanwhile, Ebony and Tara Agro Industries Limited represented by Mr. Andy Ekwelem, also decried the inequality created by the rice policy, which, according to him was emasculating small local investors.

Ekwelem told the committee that his company faces an uphill task of selling its products due to decision to import brown rice which it mills in the country with a view to adding more value through direct and indirect employment of about 650 Nigerians.

“When we had a meeting with the minister in 2013, there was an understanding that every factory will be given half its capacity to be able to take off. So we were given a combined quota of 35,000 metric tonnes for half our capacity.

So what we did was to bring in 15,000 metric tonnes for Ebony and 10,000 metric tonnes for Tara Agro leaving out 10.000 untouched. “But when the customs came out with their circular, we wrote to them saying that both Ebony and Tara Agro are owned by one person and cannot be charged separately nor can they be asked to pay duty in excess of importation that did not happen.

“Out of the 25,000 metric tonnes we brought in and milled, only 4,000 has been sold because those who imported finished product enjoy a larger share of the market due to affordability of their rice, which is cheaper.

“We can’t afford to sell rice at N6,000 when production alone would have cost about N8,000 to achieve. And we have 150 direct and 500 indirect employees to pay, coupled with payment of loan from the banks,” he lamented.