The Federal Government is considering the imposition of a new tariff on imported bulk cement (also known as cement clinkers), following the influx of the commodity which is said to have caused a glut in the market and is threatening local cement manufacturing in the country.
The current duty on imported bulk cement is 10 per cent, but no levy is imposed on the commodity.
Minister of Trade and Investment, Dr. Olusegun Aganga, who disclosed this Monday at a breakfast dialogue with select ministers on Nigerian business competitiveness organised by the Nigerian Economic Summit Group (NESG), also stated categorically that at no time did he issue any import permit for bulk cement in 2012.
Aganga expressed concern over the smuggling of bulk cement, which is imported in the form of clinkers, crushed and bagged, stating that the trend had led to distortions in the market.
He said that there was no basis for importing cement clinkers when Nigeria has a manufacturing capacity of about 28.6 million metric tonnes of the product.
According to Aganga, “On the smuggling of cement, it is a very big commodity, it’s not that easy to smuggle, it is not like sugar.
“But what we have seen is a situation whereby some companies or individuals import clinkers. However, that should not happen, especially now that we have capacity of 28.6 million metric tonnes.
“The industry brought it to my attention and I wrote to Mr. President. And he has approved a very, very high duty for anybody bringing in clinkers, because we have self-sufficiency in cement manufacturing.”
Recently, there were claims and counterclaims of a cement glut in the market by major cement manufacturers, represented mainly by Dangote Cement Plc and Lafarge WAPCO Cement Plc, and a major importer of bulk cement, Ibeto Cement Company Limited.
But Aganga mediated in the altercation and brokered peace between the manufacturers and Ibeto Cement.
Also speaking on the occasion, the Minister of State for Finance, Alhaji Yerima Ngama, decried the cost of funds in the banking sector and expressed the need for the banks, Central Bank of Nigeria (CBN) and the Ministry of Finance to find ways of bringing rates down.
Specifically, he noted that the high cost of lending by banks was taking its toll on the treasury as the Federal Government paid N699 billion to service N6.5 trillion domestic debt last year alone.
He said: “The domestic debt at N6.5 trillion is not really high, our biggest problem is the cost. Interest rates are so high in Nigeria that the interest government paid to service the domestic debt last year stood at N699 billion.
“Compare that to the total capital budget released, which is just about N1 trillon, which shows that the bankers are actually milking us dry.
“I said this during the Institute of Bankers meeting that the bankers, central bank and finance ministry should sit down and discuss ways to bring down rates.
“There is no way government would issue FGN bonds at 19 per cent, even economies that are not strong as our own, their bonds do not attract 19 per cent.
“And when you know that at 19 per cent, government is risk-free, then when the private sector comes and the banks lend at 24 per cent, there is no way we can continue with this cycle.
“So we have to sit down and deliberate on the cost of funds in this country.”
Ngama also flayed the multiple taxes levied on companies and individuals by some state governments, pointing out that Lagos and Rivers States were the biggest culprits.
For instance, he stated that Lagos State had about 97 different taxes and called on the Federal Government to bring the issue of multiple taxation to the attention of state governments at the National Economic Council.
According to him, “The issue of multiple taxation is real; Lagos alone has about 97 different taxes and we have a presentation at the National Economic Council to bring this to the notice of the state government.
“The issue is that most of this issues are with the Rivers and Lagos State Governments. But some of the states which collect internally generated revenue (IGR) of less than N2 billion a year, are not as aggressive.”