A Review of the Nigerian Energy Industry

House summons NNPC, 499 firms over N1.4tr waivers

House-of-Rep03 February 2014, Abuja – The House of Representatives Committee on Customs and Excise will soon commence investigations of the Nigeria National Petroleum Corporation (NNPC), Oando Plc and 498 companies allegedly granted waivers totalling N1.4 trillion by the federal government between 2009-2013.

All the companies have been summoned via a letter, dated January 27 and signed by the committee chairman, Sabo Nakudu (PDP, Jigawa), a copy of which was obtained by THISDAY. Nakudu also in a separate letter to the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonko-iweala, which was dated January 23, told the minister that as his committee was poised to carry out a comprehensive investigation into the granting of waivers and exemptions within the same period, the finance ministry should desist from such practice not favoured by law.

In its preliminary investigation, the committee had revealed that some of the companies had engaged in cases of round tripping the waivers granted them by making photocopies of such and using same multiple times. In some instances, they even imported other items that were not approved in the waivers.

The committee also discovered that about 900 companies, many of them oil companies, were granted waivers between 2011-2013. It stated that as investigation continues, there is every likelihood that more alleged offenders may be uncovered.

The Customs records show that Conoil Plc, which enjoyed N53 billion, was the largest beneficiary of the concession in 2013 followed by Oando with N22 billion. Others were NIPCO Plc (N19 billion), Sahara Energy (N14 billion) and Folawiyo Energy (N12billion).

The documents show that in 2012, the NNPC was the biggest beneficiary. It got N80 billion in concessions, and Sopon Nigeria Ltd was the highest non-oil beneficiary in 2011, netting about N33 billion.

In 2011, the oil firm that benefited most was still Oando with N83 billion, followed by Capital Oil and Gas (N47 billion), Integrated Oil and Gas (N20 billion), Folawiyo Energy (N18 billion) and Sahara Energy (N14 billion).

Additional categories of beneficiaries were Coscharis Motors, which supplied Aviation Minister Stella Oduah’s controversial bulletproof cars and supplied 200 cars to the African First Ladies summit in 2012, received waivers of N400 million in 2011 and N698 million in 2013.

Dangote Group, the African First Ladies Peace Mission (AFLPM), Inspector General of Police, Chief of Army Staff, Central Bank of Nigeria, Bayelsa State government, Minister of Police Affairs, Nigerian Police Force, Sokoto State Government, Akwa Ibom State Government and the Watchtower Society also benefitted.

According to a document released by the Customs, a total of N1.435 trillion was lost through import duty waivers and concessions since 2011.

In the same year about N480 billion was lost, through waiving N389 billion under the fuel, lubricants and similar products category for 149 beneficiaries, and N91 billion through other concessions to 290 companies.

The same amount was lost the following year, with N288 billion going to companies trading in oil and similar products and the remaining N191 billion being lost through other concessions. Another N474 billion was lost in 2013. The breakdown of the figures shows that N359 billion went to 80 oil firms while N114 billion was lost through concessions to another 287 companies. The Customs documents indicate that about 65 percent of beneficiaries received the waiver/concessions for goods not approved by the government, which ordinarily should be limited to raw materials, machinery and spare parts. The inclusion by the Finance Ministry of “other goods” in the categories eligible for concessions, according to the Customs, enabled finished goods that add no economic value to the country to be imported. These goods include fish, bullet-proof vehicles, kola nut, palm oil and others.



– This Day

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