Senate Mandates CBN To Recover Rice Import Waivers

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On Wednesday, the Senate ordered the Central Bank of Nigeria, CBN to urgently go after some companies to recover the over N30 billion of waivers given by the Federal Government channeled towards the importation of rice.

CBN also urged the apex bank to ensure that all agencies of government remit money into the Federation account.

Governor of Central Bank of Nigeria, CBN, Godwin Emefiele leading other management team of the bank to honour the Senate’s invitation was given the instruction by the Senate President Bukola Saraki.

Saraki also ordered the recovery from the Customs Service, the monetary equivalent of waivers issued to these companies.

“We must also show the big signals in things that we bring out the success of this policy, for example, you brought to our notice, the issue of the waivers on taxes and duties especially on rice which is about N30bn that were granted to certain companies, this money must be paid back to the federal government,” Saraki said.

“We have mentioned this to the governor of Central Bank. It will be our resolve too after we resume to get the Nigerian Customs act on this.

“Even before that, we cannot be taking some of these top positions while some people will get away and will not pay what they are supposed to pay what they should return to government. We have told the governor of Central Bank of Nigeria as well; he should also go and collaborate with customs to ensure that this N30 billion come back to the government coffers, so that we will be seen to be doing things to make this policy successful.

Saraki also expressed concern over the issue of smuggling. He said no matter how good the nation’s policy on import substitution may be, it will not succeed if smuggling continues at its current rate.

He also prescribed fiscal discipline as a major move that will help Nigeria’s economy grow at the desired rate.

“The CBN must know those agencies of government that had in the past, not sending revenue straight to the consolidated revenue purse and you must play a role in ensuring that this is done because a lot of agencies are used to this act of impunity and it is the time that we must play a role that these agencies bring the money back,” he said.

“We have seen that there is a slight increase in the amount in the foreign reserves due to the level of fiscal discipline and this must be sustained. Also, there must also be a participation of other organs like the Ministry of agriculture, trade and investment because the CBN alone cannot push this without the cooperation of other organs.

Meanwhile, as part of his reports to the senate, Emefiele said Nigeria’s Foreign Reserves has risen by 2.89 billion dollars and as at 7th July, the External Reserves stood at 31.89 billion dollars. He added that inflation rose from eight percent in December 2014 to nine percent in May, 2015.

According to Emefiele, following the sharp fall in oil prices and speculative foreign exchange activities, the external reserve declined from $37.3 billion in June 2014 to $29.1 billion at the end of June of 2015, adding, “Headline inflation remained stable throughout the year, although it has crept up to the upper limit of Central Bank range of 69 percent. Import prices inflation rose to 8.9 percent. Inflation rose gradually to eight percent in December 2014 to nine percent in May, 2015. Reflecting the sharp fall in oil prices and speculative foreign exchange activities, the external reserve declined from $37.3 billion in June 2014 to $29.1 billion at the end of June of 2015.

“I am delighted to note that with the strong efforts of President Muhammadu Buhari, to block all leakages as well as the Vigilant Demand Management Strategy of the Central bank of Nigeria, we have seen our foreign exchange reserve begin a gradual recovery.

“As at the 7th of July, 2015, the reserve stood at $31.89 billion, a trend we find extremely gratifying. Given our understanding that a fall in oil prices transitory but permanent, and that some speculative activities were ongoing in the foreign exchange market, the CBN took a number of proactive actions. These include: (1) Further typing of monetary policy, closure of the official foreign exchange window, review of operators’ net open position, placement of 72-hour limit on foreign exchange utilization by customers, introduction of a two-way other based quota system, introduction of a bank-around CBN tentative rate and bank on selective items from assets to foreign exchange.”