As the suspension of the Export
Expansion Grant enters its second year, non-oil exporters in Nigeria are
asking the government of Muhammadu Buhari to restore the incentive
which has remained the only major stimulus in the sector.
The group is also appealing to the
president to look into outstanding Negotiable Duty Credit Certificate
claims which currently stand at over N151bn.
In order to boost Nigeria’s trade
presence in the international market, the Federal Government established
the EEG in 2006 as an incentive to cushion the effect of harsh business
environment faced locally by importers and drive non-oil exports
revenue.
The
incentive, modelled after Brazil’s and China’s, was targeted at earning
more foreign exchange, attracting more non-oil investments and creating
thousands of jobs, while also making local commodities competitive in
the international market.
The EEG was operated through the Nigeria
Customs Service with instruments known as Negotiable Duty Credit
Certificates and suspended in August 2013 by the previous administration
which promised to review it. The review, however, did not happen before
the exit of the last government.
The Chairman, Manufacturers Association
of Nigeria Export Group, Tunde Oyelola, said the scheme should be
restored on account of its recorded success.
He added that operations of the EEG
between 2005 and 2013 led to a boost in the value of Nigeria’s non-oil
exports from $700m to $2.9bn.
In a statement issued by the
association, Oyelola said, “Nigeria’s vision is anchored on economic
diversification away from a mono-product (oil), transformation from
primary commodities to processed and manufactured goods, as well as high
levels of efficiency and productivity.
“However, this vision remains a mirage
without a strong commitment to the implementation of the EEG which has
proved to be the most veritable tool of achieving the broad objective of
economic diversification in Nigeria.”
According to him, the EEG was suspended
unofficially as there was no official pronouncement before its
termination, adding that the outstanding debt owed non-oil exporters by
the Federal Government has pushed players to the precipice.
He said,“Some of our members discounted
the prices of their products in the international market in order to
secure contracts, hoping to make up the difference from the EEG, but the
sudden suspension of EEG has grossly affected their accounts.
“In addition, some others went into
expansion of their operations in order to increase their non-oil export
volumes due to expected benefits promoted by EEG. In some other
instances, manufacturers borrowed from their bankers with the NDCCs as
security, but due to the suspension of the EEG, the bankers have been
forced to ask for additional and better collaterals, thereby pushing
them into further distress.
A non-oil exporter and the Chief
Executive Officer of Sapele Integrated Industries Limited, Ede Dafinone,
said a country desirous of economic expansion amid crude oil crash
could not afford to ignore a critical area like the non-oil sector,
stressing that the EEG is not free money as it is targeted at non-oil
growth and remains a practice in many developing and developed
countries.
“You look at the number of jobs it can
create, the economic diversification and expansion, the multiplier
effect on other sectors and wonder why a scheme like this would be
ignored,” he said.
http://www.punchng.com/business/industry/non-oil-exporters-call-for-restoration-of-incentives/
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