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FG loses billions over illegal importation of steel and iron

The Galvanised Iron and Steel Manufacturers Association has disclosed that the Federal Government loses about N53 billion per annum to the illegal importation of iron and steel products.

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Nigeria losses billions over importation of iron and steel

The Galvanised Iron and Steel Manufacturers Association has disclosed that the Federal Government loses about N53 billion per annum to the illegal importation of iron and steel products.

Heavy importation could collapse the Nigerian iron and steel industry: According to the group’s consultant, Obiorah Ifoh, who revealed this at a press briefing in Abuja, there is an urgent need for the re-introduction of pre-shipment inspection in order to check the high occurrence of the importation of the substandard steel products into the country.

“GISMA has been battling for sometime with this dismal economic sabotage which may lead to the collapse of up to 60 per cent of manufacturing in the production of galvanised iron and steel companies in Nigeria.

“If unchecked, it may also result in a mass lay-off of more than 50,000 direct employees and crystallisation of numerous associated systemic risks in the Nigerian steel industry in a country where unemployment is already on the high side.” -Ifoh

The Federal Government losses about N1bn on a weekly basis due to this importation: Continuing on why the Government should put an end to the importation of iron and steel, Ifoh alleged that there is a cartel of economic saboteurs who import huge volumes of containers every week valued at about $5m which are never captured on the Nigeria Customs Service portal. This causes the Federal Government of Nigeria to lose an estimated N1bn on a weekly basis and N52bn annually as a result of these smuggled items.

Smugglers are flooding the market: He also added that the abandonment of pre-inspection of goods at the point of entry has created ample opportunities for smugglers to flood the Nigerian markets with below standard products, including steel products.

He further disclosed that lack of proper inspection has made the country’s borders and seaports porous, leading to the influx of illegal arms and explosives into the country. Such a development is inimical to national economic development and national security of Nigeria.

Mr Ifoh stated that it appears that the Government’s security and revenue generating agencies have either been overwhelmed or are ignorant of the nefarious activities of the smugglers.

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Some Industries are already shutting down: Speaking further on the problem at hand, the association claimed that seven of its members have shut down operations as a result of the activities of illegal importers.

According to Mallam Dahiru Ado-Kurawa, the Chairman of the Presidential Committee on Trade Malpractices:

“the issue was brought to our attention by GISMA interested party within the Manufacturers Association of Nigeria. It has been an issue for some time, probably more rampant now as smuggling in so many products is usually predicated upon, maybe international pricing, domestic fiscal policies, among others.

“What we have come across recently is that there is misclassification of galvanised roofing sheet in terms of duty code. That is a very technical way of smuggling and quite difficult to prove unless some serious efforts are employed by the already over-stretched Nigeria Customs Service.”

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Economy & Politics

Nigeria to exit recession by first quarter of 2021

The Minister of Finance has said that Nigeria will exit the economic recession by the first quarter of 2021.

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The Minister for Finance, Budget and National Planning, Mrs. Zainab Ahmed, on Monday, November 23, 2020, said the country will exit recession by the first quarter of 2021 as the Nigerian government is working towards reversing the declining economic trend in the country.

According to Channels Television, this disclosure was made by Mrs. Zainab Ahmed while speaking on the latest GDP figures released by the National Bureau of Statistics (NBS) about the current recession in the country at the ongoing 26th Nigerian Economic Summit, organized by the Nigerian Economic Summit Group (NESG) and the Federal Ministry of Finance, Budget, and National Planning.

The Finance Minister said the COVID-19-induced recession followed the pattern across the world, where many countries had entered an economic recession.

Ahmed said, “Nigeria is not alone in this, but I will say that Nigeria has outperformed all of these economies in terms of the record of a negative growth.”

The country’s economy posted a second consecutive negative growth, contracting by 3.62% in the third quarter. This negative growth is much better than the 6.01% that was earlier forecasted by the NBS.

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Also at the Economic Summit, Vice President Yemi Osinbajo, emphasized that the government is committed to working in synergy with the private sector to foster equitable growth and underpin national development.

The 26th Nigerian Economic Summit focuses on building resilient partnerships for Nigeria’s households, businesses, and the general economy.

What you should know

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It can be recalled that on Saturday, NBS announced that the country had entered its second recession in 5 years in the third quarter of this year, as the Gross Domestic Product (GDP) fell for the second consecutive quarter.

According to figures released by the Nigeria Bureau of Statistics (NBS), cumulative Gross Domestic Product (GDP) for the first nine months of 2020, therefore, stood at -2.48%, just as it recorded a -6.10% in the second quarter.

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Economy & Politics

Recession: Economy should be redirected from wasteful consumption to productivity – Peter Obi

Peter Obi has warned that that the current recession could be worse than that of 2016, because debt raised by the administration was not properly invested.

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Recession: Economy should be redirected from wasteful-consumption to productivity — Peter Obi

Former Governor of Anambra State, Peter Obi, has said that Nigeria needs to trim the unnecessary expenditure on its budget and redirect the economy towards a production-based one. He also warned that that the current recession would be worse than that of 2016, because debt raised by the administration was not properly invested.

Peter Obi disclosed this in a social media statement on Sunday and in an interview with Channels TV.

READ: Afrinvest cautions FG on World Bank’s EoDB ranking

(READ MORE: Nigeria is in a weak financial position to absorb recession shocks —Bismark Rewane)

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“For Nigeria to pull itself out of this economic recession, the 2nd in the last 5 years, there’s a compelling need to cut the pork out of the budget and expenditure at all levels of government and redirect the economy from a wasteful consumption-based one to a productive economy,” he said.

He mentioned in his TV interview that Nigeria should emulate other countries trying to pull out of the economic mess by concentrating on improving monetary and fiscal policies.

READ: NBS hits back at Prof Hanke, says Nigeria’s inflation is not 33%

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READ: Surviving the looming recession in the Nigerian tech space

He said that the October protests were signs that politicians needed to sit up in order to arrest the situation before it gets worse.

“Every other country is discussing the recession and how to pull their people out of poverty. So, what we should do now is concentrate on the monetary and fiscal policies to start pulling people out of poverty.

“If you see what happened with the recent protests, you could see that we are heading into a problem. And I want our energy to be concentrated on that problem. The politicians, the class where I belong, should do more seriously, across party lines, to be able to arrest the situation before it gets out of hand,” he said

(READ MORE: Nigerians pay heavy price as laptop scarcity bites harder)

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He also stated that priority should be on putting food on the table now instead of discussing the 2023 elections.

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“For me, it is in discussing how do we put food on people’s table. Elections will come and we can see how to select the best. But let’s deal with the recession we have just entered before 2023.

“This recession is going to be worst than in 2016 because the monies we borrowed then were not properly invested.

READ: NNPC, only Nigerian company to cut losses by N800 billion in one financial year – GMD

“What we need now is to go into a vigorous regime of formulating implementable and measurable monetary and fiscal policies to drive ourselves out of the present situation,” he said.

What you should know 

Nairametrics reported that Nigeria’s Gross Domestic Product (GDP) in real terms declined by -3.62% (year-on-year) in Q3 2020, thereby marking a full-blown recession and second consecutive contraction from -6.10% recorded in the previous quarter (Q2 2020).

READ: Citibank: Bitcoin could skyrocket by $300,000 in 2021

Former Vice President of Nigeria, Atiku Abubakar, had warned that Nigeria must stop borrowing for anything other than essential needs. He added that very non-essential line items in the proposed 2021 budget must be expunged in a bid to kick-start the economy from a recession.

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Economy & Politics

Recession: Nigeria must stop borrowing for anything other than essential needs – Atiku

Atiku Abubakar has advised the Federal Government to expunge non-essential line items from the proposed 2021 budget.

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Former Vice President of Nigeria, Atiku Abubakar has warned that Nigeria Nigeria must stop borrowing for anything other than essential needs, he also added that very non-essential line items in the proposed 2021 budget must be expunged and others in a bid to kick start the economy from a recession.

Atiku disclosed this in a social media statement on Sunday, titled: “We Must Exit This Recession With Precision”.

Atiku said he received confirmation of Nigeria’s slide into recession for the second time in five years with a heavy heart. He urged that the poor economic environment could have been avoided if his ideas of cutting costs of governance were incorporated.

“This could have been avoided had this administration taken heed to patriotic counsel given by myself and other well-meaning Nigerians on cutting the cost of governance, saving for a rainy day, and avoiding profligate borrowing.

“Yes, the COVID-19 pandemic has exacerbated an already bad situation, however, we could have avoided this fate by a disciplined and prudent management of our economy.

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” It serves no one’s purposes to quarrel after the fact. We must focus on solutions. Nigeria needs critical leadership to guide her back to the path of economic sustainability,” he said.

Atiku warned that Nigeria’s proposed 2021 budget is no longer feasible as the Federal Government does not have the budget to afford heavy luxuries. He, therefore, urged the government to expunge every non-essential line items from the budget.

“We must act now, by taking necessary, and perhaps painful actions. For a start, the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable.

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“Nigeria neither has the resources, or the need to implement such a luxury heavy budget. The nation is broke, but not broken. However, if we continue to spend lavishly, even when we do not earn commensurately, we would go from being a broke nation, to being a broken nation.

“As a matter of importance and urgency, every non-essential line item in the proposed 2021 budget must be expunged.

“For the avoidance of doubt, this ought to include estacodes, non-emergency travel, feeding, welfare packages, overseas training, new vehicle purchases, office upgrades, non-salary allowances, etc,” Atiku said.

The former Peoples Democratic Party presidential candidate added that the budget must focus on essential items including human development investments and policies that increase the purchasing power of Nigerians.

” Nigeria ought to exclusively focus on making budgetary proposals for essential items, which include reasonable wages and salaries, infrastructural projects, and social services (citizenry’s health, and other human development investments)”

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” Additionally, we have to stimulate the economy, by investing in human development, and increasing the purchasing power of the most vulnerable of our population. Only a well-developed populace can generate enough economic activity for the nation to exit this recession.”

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Atiku called on a monthly stimulus package to poor Nigerians which he adds should be funded not by debt but by adding a 15% tax to luxury purchases.

He said, ” For example, a stimulus package, in the form of monthly cash transfers of ₦5000 to be made to every bank account holder, verified by a Bank Verification Number, whose combined total deposit in the year 2019 was lower than the annual minimum wage.

” How will this be funded? By more profligate borrowing? No. I propose a luxury tax on goods and services that are exclusively accessible only to the super-wealthy. A tax on the ultra wealthy to protect the extremely poor.

“A practical approach to this is to place a 15% tax on all Business and First Class tickets sold to and from Nigeria, on all luxury car imports and sales, on all private jets imports and service charges, on all jewellery imports and sales.”

“And above all, Nigeria must stop borrowing for anything other than essential needs. Again, for the avoidance of doubt, borrowing to pay salaries, or to engage in White Elephant projects, is not an essential need.

“If we keep borrowing, we stand the risk of defaulting, and that will make recession a child’s play because we will lose some of our sovereignty.

What you should know 

Nairametrics reported that Nigeria’s Gross Domestic Product (GDP) in real terms declined by -3.62% (year-on-year) in Q3 2020, thereby marking a full-blown recession and second consecutive contraction from -6.10% recorded in the previous quarter (Q2 2020).

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