The Nigerian Online Newspaper

Reps to investigate concessionary sugar tariff

The House of Representatives on Thursday resolved to investigate the concessionary tariff granted by the Federal Ministry of Industry, Trade and Investment to sugar importers.
The low tariff enjoyed by the importers, according to the lawmakers, runs into hundreds of billions of naira.
The resolution was sequel to a motion by Rep. Johnson Agbonayinma (Edo-PDP).
Moving the motion, Agbonayinma said in 2013, the Federal Government approved low concessionary tariff of five per cent duty and 70 per cent levy in the National Sugar Policy.
He said the National Sugar Development Council had revealed that some companies flouted the terms and conditions for obtaining a three-year low tariff for sugar importation into the country.
Agbonayinma explained that the high tariff for importation of refined sugar was deliberately designed to discourage importation and encourage local production of sugar.
He said the concession became necessary in order not to hike the local price of the commodity since the country had yet to achieve self-sufficiency in sugar production.
He said: “The government took the decision to approve the National Sugar Master Plan Policy because of the importance of the commodity.
“This is because as at 2013, Nigeria still depended on sugar importation to meet 90 per cent of local demand, and in realisation that if sugar is to be imported at that high tariff, the cost will be excessively high.
“The concession was given to three companies that signed a commitment for Backward Integration Programme (BIP) with the Federal Government.
“The money saved from the concession is expected to be invested in their farms to cater for sugar being sourced locally.
“This is with the target that by 2018, the companies will be able to produce 700,000 metric tons of sugar locally from those farms, create jobs and diversify the economy from petroleum to agriculture.”
Agbonayinma, however, recalled that in November, 2015, the Executive Secretary of the National Sugar Development Council, Dr. Abdullatif Busari, said some companies had flouted the concession terms.
He said the grant of low tariff to those companies was for them to put the savings from the concession into the BIP agriculture farms.
According to him, this is a move that will help the country to achieve self-sufficiency in sugar production for domestic consumption and export.
The lawmaker expressed concern that the companies had nothing to show for the grants, in their farms over the three years they enjoyed concessionary low tariff running into billions of naira.
The motion was unanimously adopted by the lawmakers when it was put to a voice vote by the presiding Deputy Speaker, Yussuff Lasun.
Consequently, the House resolved to constitute an ad hoc committee to investigate the issue and said the exercise would cover from 2013 to date as contained in the backward integration policy.