There is urgent need to accede to the request on the payment of EEG promissory notes, writes Bassey Okon
As a stakeholder, I am compelled to write urging the National Assembly to give its nod for the issuance of the federal government’s N350 billion promissory notes in continuation of the export expansion grant (EEG).
As it stands now, non-oil exporters are full of great expectations. However, it appears that after the executive arm has done its bit, the legislature wants to sit on the policy, a situation which analysts and economic watchers say would lead to de-industrialisation, massive loss of jobs as well as lull in non-oil exports.
We reliably gathered that the Presidency (Federal Executive Council) had sent three matters for the formal approval of the National Assembly earlier in the year. The three executive resolutions bother on EEG claims, payment of construction contractors and pensions. Whereas NASS has since rectified the latter two items, there have been no legislative actions yet on the EEG claims, making tongues to wag about the government’s seriousness concerning its economic diversification programme and export promotion drive.
Indeed, one of the main policy initiatives of the President Muhammadu Buhari administration is the re-focusing of the nation’s economy from oil-based to non-oil sectors. Towards this end, the federal government promised to beam searchlight on the export sector; how to expand and promote the sector for much-needed foreign exchange, industrial growth as well as job and employment creation. Before now, the previous administration commenced the issuance of export expansion grant to genuine exporters. However, the grants were suspended in 2007 due to duplicitous claims and counter-claims by stakeholders over who and who should indeed benefit from the package. The development, according to insiders, led to the accumulated sum of N350billion owed to exporters between 2007 and 2016.
The Federal Executive Council in one of its meeting made the EEG promissory notes approval for onward implementation. We learnt that the EEG claims by non-oil exporters have been processed and prepared by the federal government implementation committee which members are drawn from the Federal Ministry of Finance, Federal Ministry of Industry, Trade and Investment, Central Bank of Nigeria, Nigeria Customs Service, Federal Ministry of Budget and Planning, Federal Inland Revenue Service as well as Nigeria Export Promotion Council. Again, the N350billion approximate EEG claims now under the promissory notes programme were audited by the officials of Presidential Initiative on Continuous Audit (PICA) between March and July 2018.
Due to the delay in the approval of EEG claims by the NASS, non-oil exporters have been facing acute financial distress and therefore under intense pressure from banks, financiers and other creditors. Therefore, the stakeholders are appealing to the federal lawmakers to expedite action on the executive request for the payment of the N350billion EEG promissory notes.
Actually, investigations reveal that debts servicing with mounting interests have been one of the major challenges facing the exporters. ‘The exporters have acted in good faith in relying on the extant government policy of EEG in making their investment and pricing decisions in their businesses. They have taken up debts to service the receivables and these debts are incurring further interests with the continuing delay in the payment of EEG claims’, a source close to the exporters stated.
Non-oil exporters need every encouragement and support from the federal government. Although the EEG policy suffered poor implementation during the Jonathan administration, it was initiated to boost and grow non-oil exports. The EEG policy represented the federal government’s intervention to encourage non-oil exporters and uplift the nation’s economy through massive job creation as well as increased foreign reserves. Observers maintain that highly performing economies across the world are export- driven where finished products are pushed outside the shores as a matter of deliberate policy.
In Nigeria, operators in agricultural and agro-allied sector form the bulk of non-oil exporters that contribute to over 80% of the nation’s non-oil earnings. According to experts, the federal government needs to carry along the private sector players in order to realise his economic diversification agenda. Therefore, they believe that faithful implementation of the EEG policy could help to track performance in the non-oil sectors and accelerate the rate of industrial growth.
Analysts say the non-oil sector has great potential. For instance, agriculture has the capacity of sustaining the economy and ensuring inclusive growth. Although, the federal government is trying to promote the sector, more incentives and political will are required for improved productivity and encourage agro-exports.
One commodity which Nigeria has the potential to produce and export is rice. The government’s food security agenda would only succeed through effective collaborations with stakeholders and operators involved in the production, demand, supply and consumption value chain of a commodity like rice.
This is also as rice growers in Nigeria are trying to mechanise and modernise their production processes in line with international best practices. Nigeria, some experts believe, can produce 10 million tonnes of rice annually to drive self-sufficiency, food security and rice exportation.
‘Great efforts to grow rice capacity in order to displace imports and smuggling from rice suppliers especially coming from some South-East Asian nations such as India, Thailand, Bangladesh, Vietnam, Cambodia and so on should be encouraged.
Regrettably, they force Nigerians to buy their rice when the Nigerian government abandons well-laid plans and policies, investments and import substitution strategies such as the EEG, and NDCCs’’. Nigerians are out of jobs, enriching smugglers, pauperising our local farmers through policy delays. The government should implement policies that are good for economic growth and development. Exports grants and other intervention funds should be put in place. Continuity remains the hallmark of good governance and purposeful leadership. Politics should lead to development and not under-development’’, a stakeholder averred.
Indeed, the EEG claims of the non-oil exporters are quite in tandem with the directive by the Federal Ministry of Finance as approved by FEC and consistent with the audited financial results of the participating companies as filed with the Corporate Affairs Commission.
Again, the claims were duly vetted by CBN, Customs, FIRS, Federal Ministries of Finance, Industry, Trade & Investment and Budget & Planning. Checks showed that these MDAs which constituted the EEG Implementation Committee convened several meetings to check and clear every EEG claim which are in turn properly vetted by PICA (Presidential Initiative on Continuous Audit).
Sources close to the exporters disclosed that they are anxiously waiting for the appropriate Senate Committee to consider and accede to the FEC’s request on the payment of EEG Promissory Notes without further delay, adding that this would bring vibe and vitality towards growing the nation’s export sector.
Okon, a local exporter, wrote from Lagos