The Federal Competition and Consumer Protection Council (FCCPC) says it has, in collaboration with the Nigerian Customs Service (NCS), discovered that some importers and sellers of generator spare parts in the country short-change government in duty payments.
Babatunde Irukera, executive vice chairman and CEO of FCCPC, said that through intelligence gathering, the council discovered anti-free market practices such as price-fixing being perpetrated by some importers and sellers of generating sets in the country.
Irukera spoke on Arise News, according to a statement on Sunday.
He said some of the companies importing and selling generators in the country took undue advantage of the opportunity provided by the government through the exemption of duty payment on imported Completely Knocked Down (CKD) parts of generators, which was intended to boost alternative energy and increase the affordability of generators for consumers.
He said the policy was part of the ways the government wanted to help address grid power generation, transmission and distribution deficits in the country so that people could have alternative means of power supply at an affordable price.
“The least that society should experience is that the candle did not burn from both ends and they are not short-changed even with respect to the cost of providing the alternative power, which typically is now renewable energy, but primarily generators,” he said.
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“So, we got credible intelligence that in the generator sector, there were few things that were going wrong. Number one, in order to address the generation, transmission and distribution deficits, one of the things the government has done is to relax certain rules with getting your own alternative power.”
Irukera added that one of them is reducing or even eliminating duty with respect to completely knocked down parts, which most generator importers bring in and assemble. He said the lack of duty makes it more affordable for consumers. “Then, it also promotes the local industry in the sense that at least, it brings the value-adding process to be done domestically, which is assembling.”
“While the spare parts continue to attract duty, the council later discovered that there were some businesses that would import few engines in a container that would be dominated by spare parts and portray that as CKD parts, thereby paying far less duty than they should,” Irukera said.
In collaboration with the NCS, he said that they were able to get some data about some of the containers that had moved which yielded some information to them.
On the alleged price fixing by the companies, Irukera explained that the council also discovered that there was some level of coordination where some companies were talking with themselves and agreeing by signalling on how the prices moved, saying such practice distorts the free market.
“So, with all that information that we had, we presented that to the Judge of the Federal High Court and when the judge was convinced, the judge issued a search warrant, an order for us to execute and that’s what we did,” Irukera said.
“We executed a search warrant simultaneously on multiple operators in the industry at the end of last year. We analysed certain terabytes of information from their computers, emails and telephones.”
