10/09/2012 (BusinessDay) - The Manufacturers Association of Nigeria (MAN) has drawn the attention of the Federal Government to the country’s tariff regime as it affects manufacturing, and put forward recommendations suggesting what rates should apply in the industry.

This move was made last week in Abuja at a Consultative Forum on the Review of the Common External Tariff (CET) 2008-2012 organised by the Budget Office of the Federation (Federal Ministry of Finance), by Kola Jamodu, president, MAN.

But the tariff discussion on vegetable oil was deadlocked at the Abuja meeting, as protagonists and antagonists of tariff reduction were locked in stiff debate.

It was the only rowdy session of all the syndicate sessions and the last to be taken in Syndicate Group A, comprising Food, Beverages, Tobacco, Alcohol and Chemical sub-sectors.

Jamodu argued, “Tariff is a veritable instrument that could be used to spur the revitalisation of the manufacturing sector; greatly increase its contribution to the GDP, and generate substantial employment. However, the mileage achieved in the partnership on tariff, there are still some outstanding issues that should be addressed urgently to achieve the desired growth and development of the real sector.”

He said there was need for the resolution of some anomalies in the current ECOWAS CET that arose mainly from the adoption and harmonisation of some products in the CET book to achieve parity with the existing UEMOA tariff classification.

“Our careful study of the CET led to a compilation of the observed anomalies that we forwarded to your Ministry since 2009 and MAN has continuously updated the Ministry on the issue, the last being in November, 2011.

“MAN is of the opinion that the general principle guiding the determination of duty should include the objective of promoting and achieving sustainable backward integration, employment generation, industrial growth and value addition, all tailored towards the overall wellbeing of the Nigerian economy.

“To this end, we wish to reiterate the following tariff rates as worthy of retention/adoption: Industrial machinery zero percent duty; Raw Materials not locally available 5 percent Duty; Raw Materials that are sufficiently/adequately produced locally 10 percent Duty (could be 5percent duty + 5percent levy); Intermediate Products 10percent Duty; Finished goods locally available in adequate and consistent supply 20 percent duty + levy; Finished goods with excess local capacity  35 percent Duty + levy,” Jamodu added.

He argued further that it would be helpful for planning purposes for the minister to update the business community on Nigeria’s position on the adoption of the ECOWAS CET. “While we appreciate the need for backward integration, we are of the view that more consultations and interactions should be held with stakeholders in the implementation procedures in the introduction of composite cassava flour in bread, including possible review of 15 percent levy imposed on wheat and special incentives to accelerate the manufacture of composite flour,” he said.

At the vegetable oil discussion group, the two warring groups, established at the meeting were - protagonists of tariff reduction made up of Federal Ministry of Trade and Investment, Federal Ministry of Finance, MAN and PZ-Wilmar; antagonists of tariff reduction, which include Federal Ministry of Agriculture, Plantation Owners Forum of Nigeria (POFON), Palm Produce Association of Nigeria (PPAN), and Vegetable and Edible Oil Producers Association of Nigeria (VEOPAN).

PZ-Wilmar started the discussion describing the existing Crude Palm Oil tariff of 35 percent as too high and unproductive for refinery operators, and requested that the tariff be reduced to 10 percent. POFON and PPAN opposed and rejected the request.

Interestingly, VEOPAN, represented by its chairman, also opposed and rejected the request. A verdict of “inconclusive” was pronounced over the matter.  Thereafter, the Budget Office proposed that a separate session for the vegetable oil stakeholders be organised and the house agreed.