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EDITORIAL

NASS And Exporters’ N1trn Debt

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Nigerian exporters owed several millions of naira under the Export Expansion Grant (EEG) scheme are disturbed by the non-approval of monies due to them in respect of the exports they made in 2016 and 2017. They have, therefore, appealed to the members of the National Assembly to support their cause by approving the monies. The accumulated debt was put at N1trillion, representing accumulated payments for years 2016 and 2017.

The entrepreneurs say that the non-payment of the debt is hamstringing their operations and that they are finding it difficult to meet contractual obligations with suppliers and workers, having expended so much money participating in the scheme. According to them, the settlement of the debt will tremendously boost members’ businesses.

The federal government under President Muhammadu Buhari revived the Export Expansion Grant (EEG) scheme which aims at supporting active exporters to expand their international business. This could be through higher volumes of exports of existing products in current and new markets. It is a post-shipment incentive designed to expand export volumes and improve global competitiveness for Nigerian products. This is done through providing cost of production support to increase export volumes, creating job opportunities and value addition to products.

On the part of the federal government, the procedures for the payment of the outstanding obligations have been carried out; the only thing remaining is the National Assembly’s approval.

The executive director and chief executive officer, Nigerian Export Promotion Council, Mr Segun Awolowo, has given assurance that the government had processed the promissory notes and concluded plans to start payment but was waiting for final approval from the National Assembly.

While appreciating the federal government for reviving the EEG, especially with the expansion of the use of the Export Credit Certificate (ECC), we believe that payment of the due monies would tremendously help the entrepreneurs to offset their liabilities with the federal government, especially in relation to taxes and the purchase of government bonds.

The Buhari administration deserves commendation for the reinstatement of the initiative. The National Assembly should do justice to the gesture through prompt approval of the proposition by the president. The challenge of huge orders could only by solved when exporters get paid for previous transactions on behalf of the federal government. Sometimes, it is not easy for the exporters to get bank credit, and even when they do, it comes with high interest rate.

Products exportation is important for Nigeria to enable it diversify her economy and earn more money. There is need to ensure that noble initiatives involving our export sector are implemented to the letter. Issues concerning the economy of the country, especially those ones capable of creating jobs, should always be given priority consideration, in the interest of the larger Nigerian society.

A major challenge confronting mono-product economies globally is price instability. This is worse for 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 we, as a newspaper, have usually underscored the need for the nation’s economy to be diversified.
That prayer seemed to have been answered 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, by cushioning the effects of infrastructural deficiencies and reducing 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.

We agree with industry operators believe that the resuscitation represents a major step in the ongoing effort to boost the economy by strengthening the capacity of Nigerians to play in the international market.


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