Nigerian lawmakers go after British American Tobacco over alleged sharp practices

The Nigerian Senate and the House of Representatives have trained their spotlight on activities of the British American Tobacco Nigeria, particularly the allegations of sharp practices against the company, PREMIUM Times has learnt.

Last week, the House of Representatives acting on a petition written by civil society group, the Environmental Rights Action/Friends of the Earth Nigeria, summoned the tobacco company to a hearing over claims of being an illegal beneficiary of the Export Expansion Grant Scheme.

“Take notice that if you or legal practitioner or authorised representative do not attend the hearing as required the case may be heard or determined in your absence,” read the summon dated July 19th.

The hearing, which was initially scheduled for July 26th, has been moved to a later date, multiple sources told PREMIUM TIMES.

According to the petition, the tobacco company benefitted from the EEG scheme in the form of tax waivers, grants and other benefits between 2004 and 2014.

The Senate is also currently investigating BATN and about 29 other companies over alleged complicity in the loss of N30 trillion federal revenue in the import and export value chain between 2006 and 2017.

On Thursday, the Senate’s Joint Committee on Customs, Excise and Tariff, and Marine Transport gave the companies a one-week deadline to appear before it.

The Nigerian government during the administration of former president, Olusegun Obasanjo, introduced the Export Expansion Grant (EEG) Scheme as an export incentive to assist indigenous exporters expand the volume and value of their exports, diversify export markets, as well as become more competitive in the international market.

The Scheme provided cash inducements for exporters who have exported a minimum of N50,000 worth of semi-manufactured or manufactured products, with the incentive provided according to the volume of export to certified exporters in the form of Negotiable Duty Credit Certificate (NDCC). This certificate is then utilized by the beneficiaries for the payment of customs and excise duty on their export shipments.

Under the Scheme, the Nigerian government granted up to 40 per cent to any indigenous company that exported and repatriated money on intermediate and finished products.

But the government suspended the Scheme in 2013 after it observed a high incidence of abuse by exporters who exploited loopholes in the scheme, tendering different kinds of certificates to claim billions of Naira.

“We are disturbed that the British American Tobacco Nigeria (BATN) and the other multinational Tobacco Companies listed among beneficiaries of the EEG within the same period imported volumes of raw tobacco leaf and shredded tobacco into Nigeria playing double standard,” ERA/FoEN stated in its petition to the lawmakers.

When contacted by PREMIUM TIMES, Freddy Messanvi, Head of Corporate and Regulatory Affairs at BATN West Africa, said they would call back to respond to the questions. They never did and subsequent calls to him were not answered.

The ERA/FoEN had, in 2012, raised an alarm over the inclusion of the BATN in the EEG Scheme describing it as “fraudulent.”

The searchlight on BATN in Nigeria came just as the UK Serious Fraud Office launched a formal investigation into alleged bribery and misconduct in British American Tobacco’s dealings in Africa.

The allegations, of illegal payments to politicians and civil servants by the company, were first made in a BBC Panorama programme in 2015.

Matthew Myers, President of the Campaign for Tobacco-Free Kids, said the allegations of illegal activity serve as a reminder to the public that tobacco companies “cannot be trusted.”

“The allegations that British American Tobacco paid illegal bribes to influence members of parliament and gain advantage over competitors in multiple African countries are truly shocking,” Mr. Myers said.

“British American Tobacco should be investigated and prosecuted to the fullest extent of the law. It should also prompt governments to stand up to the industry and take strong action to reduce tobacco use and save lives.”

Tobacco use kills over seven million people annually, according to the World Health Organization, and is an increasing risk factor in non-communicable diseases including cardiovascular disease, cancer and chronic obstructed pulmonary disease.

A 2012 Global Adult Tobacco Survey showed that Nigerians spend N89 billion yearly on tobacco, with people in the South East region being the highest consumers of the product (nine percent of the adult population).

Last June, the Nigerian government introduced nine new regulations to limit tobacco use which included, among others, the prohibition of the sale of cigarettes in single sticks.