The Senate Committee on Investment yesterday advocated the review of the Export Expansion Grants (EEG) following the inability of the scheme, as it is presently constituted, to serve the purpose of encouraging export of non-oil products from the country.
The committee also called for the review of the Negotiable Duty Credit Certificate (NDCC), saying it has been abused by importers who have exploited the leverage for importation of luxury and non-essential products instead of importing goods that will help boost the economy.
In same vein, the Minister of State, Finance, Dr. Yerima Ngama, disclosed that since the introduction of the EEG scheme in 2005, the sum of N202.3 billion has accrued to the beneficiaries of the NDCC scheme.
Also, the Minister of State, Trade and Investment, Dr. Samuel Ortom disclosed that since 2005, a total of 23 meetings have been held by the EEG implementation committee and NDCCs valued at N236 billion were issued as claims to beneficiaries. He added that a sizable portion of that amount was for claims carried over from previous years up to 2004.
However, the decision of the committee to press for the review of the export schemes was sequel to an interactive session between members of the Senate Committee on Investment and its counterpart from the House of Representatives and other stakeholders, including representatives of the federal ministries of finance, trade and investments as well as Customs and Nigerian Export Promotion Council (NEPC).
The committee lamented that EEG, designed to ensure export support incentive scheme was beset with a number of challenges thereby crippling the essence for which it was introduced.
They therefore agreed that the scheme should be reviewed in order to bring it in line with global best practices.
Chairman of the Senate Committee on Investment, Senator Esther Nenadi Usman who led the Senate Committee however asked the Nigerian Customs Service to honour the NDCC.
Her request was sequel to complaints by some beneficiaries of NDCC that some operatives of the Customs Service were not always forthcoming in honouring the NDCC, thus leading to difficulties in import transactions.
In their reaction, Representative of the Comptroller General of the Customs Service Abdullahi Diko, said Customs was open to honouring the NDCC but that it leads to loss of revenue to the Service since it does not count as part of the revenue collectable by the service.
Minister of State, Trade and Investment Ortom listed some challenges affecting the EEG and NDCC to include frequent disruption in the implementation of the scheme by various investigative panels, which he put at nine and delays in processing the EEG claims resulting in arrears of payments.
Others, he said include non -acceptability of NDCC by the Customs, high discount rate of the NDCCs by commercial banks which erodes the value of the certificates to the beneficiaries as well as ignorance and misconceptions on the workings of the EEG scheme and disregard of its positive impact on the nation’s economy by some stakeholders and individuals.
Usman was quick to remind the Customs that the service was set up for trade facilitation, revenue generation as well as for anti-smuggling purpose and said it was wrong for the service to neglect the core function of trade facilitation, which is the main objective of the NDCC scheme in their efforts to improve revenue generation.