How Waivers Kill Local Industries, By Dangote

[obinnaD]

Folks,

This is an excerpt from Thisday Newspapers:

How Waivers Kill Local Industries, By Dangote
By Crusoe Osagie and Eromosele Abiodun, 08.28.2007


President of Dangote Group, Alhaji Aliko Dangote, has commended the federal government’s decision to halt waivers, saying they are a major killer of local manufacturing efforts in the country.
Dangote, who was at THISDAY’s Corporate Head-quarters Lagos, to commiserate with the Board of Editors on the death of the Deputy Editor, Mr. Samuel Fama-kinwa, said waivers are a major problem for genuine local manufacturers as they hamper competition and enterprise.
“We commend the federal government’s bold initiative to suspend waivers. Waiver to industrialists is a killer. For example, if they issue waiver to someone on flour, I (Dangote) cannot compete because production cost in Nigeria is generally high so there is no way somebody who is a manufacturer will approve of government giving such waivers that are capable of destroying his business.
“The major reason you have all this abuse is that people claim they are doing projects for government and so government gives them waivers. I think the best thing for the government to do will be to take a good look at the waiver issue and not only look into it…but also to prevent repetition of such abuse, government should publish the names and particulars of individuals and organisations that got these waivers and how much revenue government lost as a result. I think this will deter such people from applying for these waivers in the future,” he said.
Dangote explained that for his business, he does not need waivers to run profitably. He said the duties on most of the raw materials which his company imports are only about 5 percent and they are not a major cost to their business.
Dangote, however, stated that there were other supports that local manufacturers receive from government which cannot be classified as waivers.
He said that local manufacturers who are investing in factories and manufacturing outfits require some incentives from government to support their business and this, according to him, is consistent with global practices.
“It is a good thing that government has cancelled duty waivers and reviewed some of them. But there are some government supports that cannot be called waivers.
They are better referred to as incentives, done all over the world. If you are going to build a factory and invest a lot of money you are competing with manufacturers all over the world, you are not working in isolation, government may decide to give you a tax holiday, even the tax holiday cannot be given by the ministry… it is already stated in the tax code who and who will benefit from the different incentives. All you need to do is to get these incentives is to apply to the Nigeria Investment Promotion Council,” he said.
“Whether you are investing $5 million or $5billion you only get five years tax holiday and the other category is if you are importing machinery you pay 2.5 percent duty so these are not waivers they are incentives. So waivers are different from incentives and if you check most of these waivers they are used to import things and sell and not for doing projects for which they were given,” he added
Federal Government last week announced the suspension of any form of further waivers or exemptions granted to individuals, corporate organizations from the payment of any taxes, duties or other tariffs.
It also approved the appointment of a consortium of accounting firms to probe all previous waivers to ascertain its genuine and compliance to the conditions of such waivers.
Finance Minister, Dr. Shamsudeen Usman, who announced the suspension said efforts would be made to simplify the tax system and collection.
He said urgent attention would be given to "plugging a number of sources of revenue leakages, a great source of corruption, especially the large number of waivers and exemptions that were granted over the last three years".

After enjoying monopolistic waivers and "incentives" from Governments for many years and amassing billions of dollars from them, Dangote is now waking up to the realities that waivers are not good afterall if we must encourage local productivity......ha ha ha. Hope our government is listening.....

What was good for the goose............

Anywayz, kudos to him. Atleast he's using his amassed wealth to set up functional industries that employ labour and enhance overall economic productivity. He's also been nice enough to allow us 'partake' in the largess viz the Sugar IPO(fleeced us through the NASCON deal though), Impending Flour and Cement IPOs.

What y'all think?

[investak]

Aliko may be a better politician tha a buisness man. He certaily knows how to play the politics. Our polititians should take lessons