The delay in approving non-oil export incentives under the revised Export Expansion Grant (EEG) scheme, also known as the Export Credit Certificate (EEC), is affecting Nigeria’s non- oil export receipt. The Nigerian Export Promotion Council recently clarified that the delay in clearing the backlog of the revived EEG payments was attributable to prolonged approvals from the National Assembly (NASS), following its reversion to Credit Guarantee Certificate (CGC).
The Export Expansion Grant (EEG) Scheme was introduced via the Export (Incentives and Miscellaneous Provisions) Act (amended in 1992) to stimulate non-oil exports. The scheme is administered by the Nigerian Export Promotion Council (NEPC). The scheme was suspended in 2014, to review and redesign it, in order to prevent abuse and ensure that it is fit for purpose.
Prior to its suspension, the incentive was granted in form of a negotiable duty credit certificate (NDCC) utilisable by exporters for payment of import and excise duties. The NDCC has now been replaced with the Export Credit Certificate (ECC). The revised guidelines were released and effective from January 1, 2017.
The previous administration had commenced the issuance of EEG to genuine exporters. Under the revised guidelines exporters are divided into four categories with maximum applicable EEG rates as indicated below: fully manufactured products: 15 per cent, semi-manufactured products -10 per cent, processed/intermediate products -7.5 per cent, merchants/primary agricultural commodities – five per cent.
It states that proceeds of qualifying export transactions must be fully repatriated within 300 days calculated from export date and as approved by the EEG implementation committee. Exporters are also required to present an Export Expansion Plan as a prerequisite for participating in the EEG scheme.
However, the ECC can be used to settle all federal government taxes such as VAT, WHT, companies’ income tax etc. It can also be used to purchase government bonds and repay government credit facilities and debts due to the Assets Management Company of Nigeria (AMCON). The ECC is valid for only two years and transferable once to final beneficiaries.
To fund the administration of the scheme, EEG beneficiaries are to pay two percent of the value of the ECC upon collection of the certificate and for cost of collection when utilised. According to a report released in 2017 by PricewaterhouseCoopers Limited, the revision and reintroduction of the EEG scheme was a reflection of the federal government’s commitment to export promotion. 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.
The Federal Executive Council (FEC) had sent three matters for the formal approval of the National Assembly earlier in 2018. The three executive resolutions bother on EEG claims, payment of construction contractors and pensions. Whereas NASS had 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.As a result of this, the federal government had 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.
The expansion of the EEG scheme would enable exporters easily offset their liabilities with the federal government, especially in relation to taxes and the purchase of government bonds.
The Buhari administration deserved commendation for the reinstatement of the initiative, but members of the National Assembly would do justice by promptly approving the payment as a way of triggering increased activity in the country’s export sector.
The challenge of huge orders could only by solved when exporters get settled for previous transactions on the behalf of the federal government. A major challenge of mono-product economies the world over is instability in prices.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.
Nigeria remains a developing economy that is in dire need of agro export promotion and we are not doing that yet. It is for these reasons the plea on the National Assembly to promptly endorse the presidential proposition regarding the EEG is predicated.
– Quassim, an oil sector analyst, sent in this piece from Abuja
Banks Recapitalisation: Expert Says Emefiele On Track
A Financial Expert, Prof. Uche Uwaleke says the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele is on track on...
China Slams Possible US Bank Penalties
China has criticised Washington’s efforts to enforce US law abroad following a news report three Chinese banks might be penalised...
Court Remands 4 In Prison Custody For Allegedly Strangling Woman To Death
An Iyaganku Chief Magistrates’ Court, Ibadan, on Tuesday ordered that four men, accused of strangling a woman to death be...
Edo, Delta Highest In Human Trafficking – NAPTIP
The Zonal National Agency for the Prohibition of Trafficking in Persons, (NAPTIP), Benin zone, Barr. Nduka Nwenwene, on Tuesday, said...
Israel Halts Transfer Of Fuel To Gaza In Response To Arson Balloons
Israel has halted the transfer of fuel to Gaza Strip’s only power plant on Tuesday, in response to the launch...
Scrap Foreign Reserves, NCPC Boss Tells FG, Others
The executive secretary of the National Christian Pilgrims Commission, NCPC, Tor Ujah has urged the federal government as well as...
Benue Assembly Speaker, Pilgrims Task Nigerians On Religious Tolerance
The Speaker, Benue State House of Assembly, Mr Titus Uba as well as other pilgrims at the ongoing Easter Pilgrimage...
NEWS23 hours ago
Gov Fintiri Sacks LG Staff Employed from April 2016 To Date
NEWS23 hours ago
INEC Server: Stop Heating Up Nigeria’s Polity, NANS Tell Atiku
COVER STORIES13 hours ago
CBN Kicks Off PMB’s 100m Jobs Project
COVER STORIES14 hours ago
Zamfara: Ex-Gov Yari Leaves N251bn Debt
NEWS24 hours ago
FMC, Keffi Staff Protest Appointment Of New Clinical Head
NEWS21 hours ago
Gov Fintiri Declares Free Education in Public Schools in Adamawa
NEWS2 hours ago
10 Killed In Wukari High Way Road Blocks
WORLD4 hours ago
‘Mental Retardation’: Iran’s President Mocks Donald Trump