TRALAC - Trade Law Centre

Nigerian Govt Okays 2.5% Duty for AGOA Industrialists

Thursday, 08 May 2003

Source: Vanguard (Lagos)

INDUSTRIALISTS under the aegis of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) who are involved in the importation of industrial equipment under the African Growth and Opportunity Act (AGOA) scheme are now to pay 2.5 per cent Customs duty on such goods.

According to document from NACCIMA made available to Vanguard, the approval was conveyed to the association by the Director (Fiscal) in the Federal Ministry of Finance, Mr. B. M. Dankano in a letter to the association and copied to the Director Comptroller-General of the Nigerian Customs Service,. The Liaison Offices for Societe Generale De Surveillance (SGS), Swede Control Intertech Service and Coteena International Limited.

Apart from the letter, according to NACCIMA read, "This is to confirm that the Honourable Minister of Finance has approved that AGOA members of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture attracts 2.5% Customs duty.

Adding that "this is in line with the year 2002 budget fiscal policy measures and tariff amendments implementation circular N0. BD, 12237/s.366)vol.1/31 dated 10 April 2002". It therefore advised the above mentioned offers and their subordinates to "assess the implementation of industrial equipment by AGOA committed members of NACCIMA accordingly."

Arising from this, Madewell Products Ltd from Sapele, Delta State, and a member company of NACCIMA has become the first beneficiary of this approval from the Federal Government.

To encourage active participation of the private sector, the Federal Government organised and funded special trade delegations to the USA, South Africa, Mauritius and some Asian countries. The delegations included manufacturers in the footwear/leather products, textile and apparel and other products (granite) sectors. Such trade missions have served as linking points between the potential Nigerian exporters and the US importers on one hand, and the Nigerian exporters and importers from the rest of the world on the other. These linkages through trade missions have started yielding results though orders received by CIBI (a granite company) based in Kaduna and initial exports (though small in volume) to the US by A. Lead Ltd, a footwear company in Aba.

Government has, further created an enabling environment for the local industries to thrive and measures to check dumping of imported items, especially textiles, which are sold at prices below the actual cost of production. It is envisaged that these measures would allow for optimum capacity utilisation of our companies thereby generating more jobs. The United State Agency for International Development (USAID) has also conducted a survey on Export Opportunities for Nigerian Manufacturers in Textile-based Sewn Products. The report which is very comprehensive would serve as a good guide for formulation of business plans for those interested in garment manufacturing.

Although Nigeria is yet to have an effective Visa system under the AGOA textile and apparel provisions, it is hoped that the visa arrangement would be effected as soon as the National Assembly harmonises and passes the relevant Bill on penalties for illegal trans-shipment and the visa system.