FEDERAL MINISTRY OF FINANCE

REJOINDER. August 2, 2014

ALLEGED LOSS OF N1 BILLION ON CAR IMPORTS: DAILY TRUST’S STORY IS COMPLETELY FALSE AND MISLEADING

Our attention has been drawn to an erroneous story in the Daily Trust Newspaper of Friday, August 1, 2014 titled “World Economic Forum on Africa: Federal Government Loses N1 Billion on Import of 290 Cars”. The story demonstrates ignorance both of Nigerian government policy and standard universal practice in the management of waivers. To expect beneficiaries of government waivers to return the goods for which the waivers were issued, as Daily Trust proposes in its story, demonstrates a misunderstanding of elementary facts and logic.

In the said article, the newspaper claimed that the Federal Government lost N1 billion in respect of a duty waiver granted to import 290 cars for the World Economic Forum on Africa (WEFA) held in Abuja in May, 2014. As already stated, it then tried to make an issue of the fact that the cars were kept by the company after the event. This is clearly another example of poor journalism and an attempt by Daily Trust and embittered interest groups to cause mischief.

For the benefit of the public, the facts of the matter are as follows:

i. Government granted import duty waiver to Messrs Globe Motors for importation of vehicles for the WEFA in May 2014, following a formal request by the Federal Capital Territory Administration, the hosting city for the event;

ii. The company that used its own money to import the vehicles naturally gets to keep its goods after deploying them to service the event. Government does not purchase such vehicles but only grants duty waivers on them in return for the services provided by the importing company. To expect the company to give the vehicles to government after the event is preposterous, to say the least. And Daily Trust trying to make an issue out of this clearly shows an embarrassing lack of understanding of what the process entails.

iii Waivers are granted to serve as encouragement to the company providing the transportation services for visiting delegates. The service provided to government is the value which the country gets from granting the incentive. This is the way it has worked for similar events organised by other State governments such as Lagos, Rivers, Delta, etc, that have benefitted from the scheme in the past. The rationale for this approach is that the Nigerian private sector has not yet developed a viable car leasing industry.

The newspaper further claimed that Nigeria lost N1.4 trillion to waivers in the last 3 years. Here again, the correct position is that waivers worth a total of N170 Billion were granted to a variety of sectors to assist their development, including Power, Agriculture, etc. This is a common instrument that countries use as part of their industrial development strategy.

Decent journalism requires at least a minimum ethical standard of reportage. This one does not. We cannot stop Daily Trust from reflexively attacking government but it should, in the interest of journalism ethics and its readers, do its homework.

Paul C Nwabuikwu
Special Adviser to the Coordinating Minister of Finance and Minister of Finance

Abeg let this flunky STFU. There's no sensible reason why import waivers were given to this importer by the FG. They could easily have factored in the import costs into the amount they charged the FG for the use of the cars.