Relief for 285 companies as FG approves payment of N375bn export debt – The Whistler Nigeria

The Federal Executive Council chaired by President Muhammadu Buhari has approved the payment of N375 billion as backlog of export expansion grants to 285 non-oil exporters.

The amount was confirmed by the Executive Director/Chief Executive of the Nigerian Export Promotion Council, Dr. Ezra Yakusak during an interview on the sidelines of the Export for Survival Walk in Abuja.

The EEG tax credit is expected to provide some relief to the non-oil exporting sector following a series of delays that have hampered the release of the export expansion grant.

This is a federal government initiative aimed at encouraging exporters of non-oil products, including agricultural products, in order to cushion the effects of infrastructural deficiencies and reduce the overall unit cost of production.

It was introduced by the Export Incentives and Miscellaneous Provisions Act, Cap 118 of 1986 to increase the contribution of non-oil exports to the national economy.

The mechanism is such that a financial credit is applied on the value of Nigerian commodity exports ranging from 5% to 30%.

The financial credit is not financed in cash, but provided in the form of a negotiable right credit certificate which could be applied against import duties on other items.

It was suspended by the federal government in 2014 following allegations of abuse of the scheme by exporters.

However, after a series of revisions to the scheme, it was reintroduced as a tax credit by the government.

Experts said reactivating the EEG program was vital for diversifying the economy through non-oil exports.

Speaking during the interview, the NEPC boss explained that the N385bn which has been approved by the FEC would enable the government to eliminate the EEG backlog from 2006 to date.

He has already said that the approval made by the FEC has been sent to the National Assembly for legislative review, adding that many initiatives are being implemented to boost non-oil exports.

The NEPC boss said: “Initiatives come as challenges arise. Since the outcome of the last conference, we have decided to recruit new exporters who have no idea what it means to export, we will match them with all exporters to train them on non-oil exports from the basics, procedures to ensure that they export.

“To boost non-oil exports, the Federal Executive Council has just approved the sum of N375 billion as an export expansion grant to all exporters who have applied for the EEG.

“And that means the backlog from 2006 to date has been cleared and exporters will expect it anytime soon.

“At this time, it will be submitted to the National Assembly for approval, about 285 exporters are beneficiaries of this EEG.”

Yakusak and other NEPC staff were joined by relevant stakeholders from Ministries Departments and Agencies (MDAs) to participate in the quarterly program hosted by the Board.

Export for Survival is a sensitization fitness activity to awaken the awareness of Nigerians that the survival of Nigeria as a nation depends on non-oil export.

Regarding the challenges facing the development of non-oil exports, Yakusak identified supply-side constraints, the issue of packaging, the issue of logistics and market access as some of the issues the NEPC attacks.

“There are so many strategies to overcome the challenges. One of the challenges is the logistical constraint concerning our exports in terms of bottlenecks in the ports, in particular the ports of Lagos.

He said: “So we started the domestic warehouse initiative which is to reduce logistical constraints and ensure that our goods do not sit for months before being shipped, as almost all export contracts have a shelf life and once you don’t meet with the time for this export, the contract will be canceled and this bad news for exporters which affects our economy as a whole.

“We are meeting our target for the NEPC March on Export for Survival as it has led to an increase in the registration of non-oil exporters.

“There has been an influx of people coming to register and we know it’s thanks to this initiative.”

ENDS