Cablegate: Nigeria: Good News-Gon Drops Some Import Bans

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DE RUEHUJA #1925/01 2701450
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P 261450Z SEP 08
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 4049
INFO RUEHOS/AMCONSUL LAGOS 9998
RUEHZK/ECOWAS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 02 ABUJA 001925

SIPDIS

DEPT PASS TO USTR-AGAMA
TREASURY FOR PETERS AND HALL
DOC FOR 3317/ITA/OA/KBURRESS AND 3130/USFC/OIO/ANESA/DHARRIS

E.O. 12958: N/A
TAGS: ETRD ECON ECIN EAGR EINV PREL PGOV NI
SUBJECT: NIGERIA: GOOD NEWS-GON DROPS SOME IMPORT BANS

1. Summary. In a major breakthrough, September 25 the Government
of Nigeria (GON) announced the number of banned import categories
would decrease from 44 to 26 items, and that there would be tariff
reductions on a wide range of products. Bright Okogu, Director
General of the Budget Office of the Federation, and H. B. Ahmed,
Comptroller General (CG) of the Nigerian Customs Service (NCS), said
the GON remains committed to harmonizing its tariff regime with its
neighbors under the Economic Community of West African States
(ECOWAS) Common External Tariff (CET). The GON reduced the duty
rate on a proposed ECOWAS CET fifth band from 50 percent to 35
percent pending the outcome of the ECOWAS Commission study on the
implications of the proposed fifth band. The trade policy shift is
substantial good news that follows years of USG advocacy and
represent a major positive milestone in Nigerian trade policy. The
removal of several agricultural products from the banned item list
should a major boon to U.S. agricultural exporters, especially in
the areas of fresh fruits, edible oil, beef and pork products.
Advocacy efforts and engagement on the Trade and Investment
Framework Agreement and potential Bilateral Investment Treaty should
continue and be strengthened to further encourage elimination of all
bans and replacement with reasonable tariffs. End Summary.

2. On September 25, Bright Okogu, Director General of the Budget
Office of the Federation, and H. B. Ahmed, Comptroller General (CG)
of the NCS, held a press briefing on the GON's new tariff policy
published in a document titled the "2008 - 2012 Tariff Book." Okogu
provided an introduction on the tariff book confirming that it is
Nigeria's second attempt at harmonizing its tariff regime with those
of its West African neighbors under the ECOWAS CET. The first
attempt was the 2005 - 2006 Tariff Book released on October 1, 2005
which had about 60 percent of the duties harmonized with the ECOWAS
CET. Okogu stated that Nigeria remains committed to the ECOWAS CET.
He also stated that the tariff book is a product of two years of
hard work involving inter-agency collaboration among various GON
agencies and the private sector and other stakeholders.

3. CG Ahmed provided a general breakdown of some of the schedules
in the 2008 - 2012 Tariff Book, and stated that the policy will be
implemented with immediate effect, and there will be no grace
period. He also stated that the GON will not grant any special
concessions, waivers, or exemptions outside those available in the
tariff book. He also mentioned that limited published copies of the
tariff book will be given to the various Customs Area Commands,
Licensed Clearing Agents, and the Manufacturers Association of
Nigeria. New copies will soon be published and made available to
the public, while the NCS also plans to publish the document on its
website.
.
2008 - 2012 Tariff Book
-----------------------
.
4. According to CG Ahmed, there is a reduction in the number of
prohibited tradable imports from 44 items to 26 items, and a general
reduction in applicable duty rates in the new tariff book. The
tariff book contains seven schedules and five tariff bands. In
addition, a fifth band and its 50 percent duty rate would be lowered
to 35 percent. The tariff bands are as follows:

-- Band 1 - Zero duty for necessities such as medicine including
drugs for the treatment of HIV/AIDS, books, fertilizer;
-- Band 2 - 5 percent duty for basic raw materials;
-- Band 3 - 10 percent duty for intermediate goods;
-- Band 4 - 20 percent duty for finished goods; and
-- Band 5 - 35 percent duty for luxury items and finished goods in
infant industries the GON wants to protect.

5. The tariff book has seven schedules. Schedule 1 contains tariff
and duty rates, while schedule 2 contains goods exempted from duty
such as films and editorial materials imported by the United Nations
and its agencies, fuel for aircraft of armed forces of another
country and civil aircraft of other countries, goods imported for
the use of the commander in chief of the armed forces of Nigeria or
anybody standing in for him, goods imported by foreign diplomats,
goods obtained free as technical assistance from donor agencies such
as the Red Cross, life saving equipment, military uniforms, and arms
and ammunition imported for use by the armed forces or the police.
.
Banned Items
------------
.
6. Schedule 4 contains items prohibited under trade, which refers to
items that can be imported in a quantity allowable for personal use
but not for resale.

-- Dead or live birds including frozen poultry;

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-- Refined vegetable oil excluding castor oil and olive oil. Crude
vegetable oil can be imported by those that have vegetable
refinery.
-- Cocoa powder, cocoa cakes;
-- Cassava;
-- Water, including mineral or flavored water;
-- Non-alcoholic beverages excluding energy or health drinks;
-- Bottled or canned beer;
-- Fruit juice in packs;
-- Bagged Cement (only companies that have been given concession to
import the item for a limited time to bridge supply gaps can
import);
-- Medicines falling under chapter 30 e.g. paracetamol, multivitamin
tablets, chloroquine etc;
-- Waste pharmaceuticals;
-- Soap and detergents in retail packs;
-- Sanitary wares of plastic including plastic water closets, baths
and domestic articles of plastic under heading 3924, excluding baby
feeding bottles;
-- Toothpicks;
-- Rethreaded or used tires;
-- Noodles;
-- Corrugated paper and paper boards and cartons made from them;
-- Toilet paper, cleansing paper under 4818, excluding baby diapers
and exercise books;
-- Telephone recharge cards;
-- Textile fabrics and articles thereof such as African prints,
made-up printed articles, lace fabrics and other embroidery fabrics
(58012100 - 58019000), carpets and rugs of all types under chapter
57 and 58. Excluding insecticide treated nets and made-up lining
articles, industrial gloves, jute bags etc;
-- All types of footwear, bags and suitcases, excluding safety
shoes, sports shoes and CKD shoes and blanks;
-- All types of furniture except baby walker, laboratory cabinets,
height adjustment device, stadium chairs, skeletal form of chairs
including blanks, arm guides;
-- Ball pens including refills, except the tips;
---Used motor vehicles above 10 years of age (passenger vehicles).
Trucks and Buses of any age can be imported;
---Hollow glass bottles exceeding 0.15 liters used for packaging of
beverages; and
---Used compressors, used air conditioners, and used refrigerators.
.
Items Removed From the list of Banned Items
-------------------------------------------
.
7. Items removed from the list of banned items include flowers
either plastic or fresh, fresh and dried fruits, maize, sorghum,
millet, wheat flour, sugar confectionaries, biscuits, bentonites,
barites, toothpaste, envelopes, diaries, greeting cards, calendars,
exercise books, cutlasses, axes, pick axes, spades, shovels, fully
built and completely knocked down bicycle frames, forks, mudguards,
wheel barrows and electric generating sound proof casings.
.
Comment
-------
.
8. Though we have not seen a breakdown of the tariff for each
individual product, the reduction in the number of prohibited
imports is a major breakthrough and step in the right direction
after sustained advocacy efforts. The removal of several
agricultural products from the banned item list should a major boon
to U.S. agricultural exporters, especially in the areas of fresh
fruits edible oil, beef and pork products. Advocacy efforts and
engagement on the Trade and Investment Framework Agreement and
potential Bilateral Investment Treaty should continue and be
strengthened to further encourage elimination of all bans and
replacement with reasonable tariffs. The continued harmonization of
the four bands with the ECOWAS CET and reduction of the duty on the
fifth band from 50 percent to 35 percent also shows that Nigeria
remains committed to the ECOWAS CET.

9. At the time of announcement copies of the tariff document
showing the applicable duty rates were not available but officials
stated it will soon be placed on the Nigerian Customs Service (NCS)
website and published copies will be made available to the public
soon. As soon as Post receives a copy, we will provide a more
detail assessment of the tariff book. End comment.

SANDERS

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