By Eromosele Abiodun
Federal government efforts to diversify the economy to shoreup foreign exchange has received a boost with the approval of N20 billion for export claims settlement.
The Executive Director/Chief Executive Officer, Nigeria Export Promotion Council (NEPC), Olusegun Awolowo announced the approval at a stakeholdersâ€™ forum on the revised guidelines on the Export Expansion Grant (EEG) in Kano.
An initiative of the federal government, the Export Expansion Grant (EEG) was meant to encourage exporters of non-oil products, including agro-commodities, in order to cushion the effects of infrastructural deficiencies and reduce overall unit cost of production.
It was introduced through the Export Incentives and Miscellaneous Provisions Act, Cap 118 of 1986 to enhance the contributions of non-oil export to the national economy.
Awolowo, had at another forum recently said if the huge EEG claims of over N300 billion was not addressed, it would affect the efforts of the government to diversify the economy owing to the near absence of incentives to encourage exports.
Awolowo stated that the review of the scheme by the federal government was meant to boost the economy, as well as resuscitate ailing industries in the country.
According to him, the theme of the forum, â€˜Improved EEG scheme for sustainable growth and development,â€™ was to review the scheme by an inter-ministerial committee set up to look at the underlying issues and proffer solutions to enable the reactivation of the scheme after its suspension in 2013.
â€œI am glad to also announce that the Federal Government has approved a budgetary provision for the settlement of the EEG claims, with initial provision of N20billion in the 2017 budget for the settlement of the current yearâ€™s export claims.
â€œThis will eliminate complaints over revenue loss by utilising agencies, as well as the Export Credit Certificate, which replaces the Negotiable Duty Credit Certificate, which is expected to cover a wider scope than just settlement of taxes. Its usage will include purchase of governmentâ€™s bonds, settlement of government loans, such as from the BoI, NEXIM AMCON, BoA etc.â€
The President of Manufacturers Association of Nigeria (MAN), Mr Frank Jacobs, had recently called on the federal government to re-introduce EEG scheme to salvage the manufacturing sector.
He said that recipients of the export grant held an instrument called Negotiable Duty Credit Certificate (NDCC) which they used in the payment of import and excise duties. Jacobs said that the suspension of the NDCC had affected export of manufactured goods which had drastically reduced the volume of exports.
According to him, the inability of Nigerian exporters to meet delivery targets has destroyed the confidence built over the years by overseas importers of Nigerian products. Jacobs said that MAN had severally met with the Vice President and the Minister of Trade, Commerce and Investment on the need to re-introduce EEG scheme to boost the manufacturing sector.
He added: â€œThe association also visited the Minister of Finance, Mrs. Kemi Adeosun and she assured that MAN â€œwill be hearing from government soon but till now nothing has been done.â€
â€œWe have made it clear to the government to re-introduce EGG and pay the outstanding NDCC to save many companies that are folding up. Some have folded up already. The Vice President has promised us that something will come up soon but we do not know how soon it will be, if nothing is done fast many companies are still going to fold up; we are hoping that the government that soon do something positive with regard to the NDCC,â€ Jacobs said.