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N1trn EEG Payment: What Hope For Nigerian Exporters?

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Nigerian business operators involved in export of Nigerian-made products have appealed to the members of the National Assembly to help their course by approving monies due them in respect of 2016/2017 exports they made.

Speaking during a recent forum in Lagos, the entrepreneurs said the appeal had become necessary given the huge amount involved, and the fact that the non-payment was hamstringing their operations.

Executive director and chief executive officer, Nigerian Export Promotion Council, Mr Segun Awolowo had put the money at over N1trillion, saying that this represented accumulated payments for years 2016 and 2017.

Awolowo, who said the procedures for the payment of the outstanding obligations had been carried out and that the only thing remaining was for the national assembly’s approval.

Speaking on the sidelines of the MAN Export Group AGM themed: ‘Effective Implementation of the Non- Oil Export Incentives : A Catalyst for Export Development in Nigeria ’, Awolowo, who was represented by the director in charge of policy and strategy in the agency , Mr Abdullahi Sidi- Aliyu , assured that the government had processed the promissory notes and concluded plans to start payment but was waiting for final approval from the national assembly .

“The government has done all that is necessary for the take off of this programme . Right now , we are waiting for the national assembly to reconvene and then they will grant approval for that promissory note programme.

“There are other debts that are coming under the promissory note programme . So hopefully , if the national assembly reconvenes before the end of the year, everything will be implemented ,” he added.

Reacting to the development, However, exporters are pleading for prompt settlement of the outstanding bills so that they would continue in business, even as some raised funds to finance the exports.

Chief Ede Dafinone who is the chairman, Export Group of the Manufacturers Association of Nigeria (MAN), while appreciating the federal government for reviving the Export Expansion Grand (EEG), especially with the expansion of the use of the Export Credit Certificate ( ECC), added that payment of the due monies would tremendously help members’ businesses

He observed that the expansion of the scheme would enable his members easily offset their liabilities with the federal government, especially in relation to taxes and the purchase of government bonds.

He reiterated the fact that last year was challenging for business, especially in the area of procuring of foreign exchange, praying for approval of the monies being awaited by the exporters under the scheme.

“Since the collection of the unutilised Negotiable Duty Certificates by the federal government, no payment has been made which put our members in a difficult position with their banks. I hope government will commence full payment of the new EEG soon,” he stated.

Mrs  Mojisola Adenekan, who deals on export of cashew nuts, said the Buhari administration deserved commendation for the reinstatement of the initiative, praying the national assembly to do justice to the gesture through a prompt approval of the proposition by the president.

She said the challenge of huge orders could only by solved when exporters get settled for previous transactions on the behalf of the federal government.

“Sometimes, it is not easy to get bank credit. And when you do, it is on high interest rate. Besides, the total money required by the export business is huge. If you do not get reimbursement fast, your business could be grounded,” she said urging for quick response by the concerned authorities.

She however expressed optimism that the members of the Assembly would do justice by promptly approving the payment as a way of triggering increased activity in the export sector.

Managing director of Gold Trade, Mr Olajide Ayomide, also reiterated the appeal of his colleagues, adding that as ambassadors of Nigeria’s business sector, their efforts were critical to improved trade balance for the country.

He therefore urged the national assembly, now that the Presidency had already presented the bill for payment, to encourage entrepreneurs, and bring boost to the economy by endorsing the bill.

Another that spoke along the same line, Godwin Odhiare, general manager of Sagenta Nigeria Enterprises, also commended President Muhammadu Buhari for the remodeling of the EEG, saying the economy would be the better for it.

According to him, products exportation is important for Nigeria to enable it diversity and earn more money.

“You know, there is a proverb that he who wears the shoes knows where it pinches. It is those who spend money in exportation that would understand the burden of not being settled on time. There is need to ensure that noble initiatives involving our export sector are implemented to the latter.”

According to Odhiare, many of them who had been nursing the idea of expanding their operations were being held back by the outstanding payments since according to him, the monies involved were huge.

“The export market is competitive. Many of us are proud to be flying the nation’s flag in that area and we would appreciate every assistance that the authorities could give,” he said.

Mazi Jerry Ugwu, the general manager of Leather Worth Nigerian Company,  said many of them were appreciative of the initiative promoting Nigerian made products, warning against anything that would negatively affect it.

“I would appeal to the members of the assembly, not to look at this particular issue from the point of view of politics. This is one area in which Nigeria’s image is being publicised abroad while at the same time bringing revenue.  The exporters should be paid promptly.”

Ugwu added that issues concerning the economy of the country, especially those ones capable of creating jobs should always be considered with priority, in the interest of the larger Nigerian society.

“You can imagine what would happen when such an amount is released. It would be ploughed back into the economy and more jobs would be created,”he said.

Experts have argued that a major challenge of mono-product economies the world over is instability in prices.

According to them, this is worse with countries like Nigeria, which are, not only mono-product in nature, but ship such products out in raw, unprocessed form.

The prices are usually externally influenced and thus susceptible to manipulations or shocks in the global economic system. It is for this reason that Nigeria’s crude oil has remained one of the most vulnerable in terms of pricing in the international oil market.

It is for this reason too that they have usually underscored the need for the nation’s economy to be diversified.

That prayer seemed to have been heeded, when a few years ago, the federal government set up the Nigerian Export Promotion Council (NEPC), putting in place some policies aimed at supporting Nigeria’s quest to export, one of which was the Export Expansion Grant (EEG), to be managed by the former.

The EEG is an initiative of the federal government designed to encourage exporters of non-oil products, including agro-commodities in order to cushion the effects of infrastructural deficiencies and reduce the 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

The mechanism is such that a financial credit is applied to the value of exports of products from Nigeria, ranging from five per cent to 30 per cent.

The financial credit is not cash funded but provided as Negotiable Duty Credit Certificate, which can be applied against import duties on other items.

Industry operators believe that the resuscitation represented a major step in the ongoing effort to boost the economy partly by strengthening the capacity of Nigerians to engage in international market.

They said give and take, that the scheme had a lot of advantage.For instance, it provides for claims payable to individual exporters depending upon the value and volume of products exported and the individual rating as per the company baseline data ( both as outlined in the EEG Policy Circular of the Federal Ministry of Finance).

A development economist, Dr. Ken Igboanugo, also called for a fraud proof access template.

Speaking on the sidelines of a one-day day quarterly Business Intelligence Discuss (BID) on African Continental Free Trade Agreement (AfCFTA), organised in Lagos on Monday by Business Hilights Online Publications, he argued that “If it has been discovered that earlier regime of the grant was marred with serial abuse, stopping it does not solve the problem, but coming up with an antifraud template.

“Nigeria remains a developing economy that is in dire need of agro export promotion and we are not doing that yet. In fact to me, the reintroduction of EEG is belated,” Igboanugo stressed.

Stakeholders, who spoke with LEADERSHIP said there is no doubt that the EEG is not only valuable, but follows a diligent process, with a mindset of accelerating export volume and enabling exporters to diversify their export products and market coverage.

It is for these reasons they said, the plea on the national assembly to promptly endorse the presidential proposition regarding the EEG is predicated.

An Abuja – based economist, Dr Hillary Omafor, was of the view that having made a lot of sacrifices and investments keying into the EEG initiative, non-oil exporters should be encouraged to do more, through a prompt payment of the costs already incurred in the bid to promote made in Nigeria products.

For now, the hopes of those exporters who participated in the scheme hang in the balance.

 

 



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