‘Why processing firms are becoming moribund’
Stakeholders seek measures to non-oil export’s growth
Stakeholders involved in non-oil export and processing of agricultural goods have decried government’s poor efforts in encouraging growth of the industry through suspension of incentives and initiatives designed for the industry.
According to the stakeholders, there is need for the Federal Government to intervene on the issue, adding that many processing firms are closing down due to lack of confidence in government’s agenda in boosting non-oil export.
The stakeholders, under the aegis of the Organised Private Sector Exporters Association (OPEXA) appealed to the Federal Government to revive the Export Expansion Grant (EEG) scheme and honour outstanding Negotiable Duty Credit Certificate (NDCC) claims, both of which have hit over N450 billion.
According to OPEXA, the failure of the Federal Government to honour the trade agreements has affected non-oil export earnings within the last two years.
Addressing journalists in Lagos, recently, Executive Secretary, OPEXA, Jaiyeola Olarewaju, said the non-oil sector which showed remarkable growth from $1 billion in 2006 to about $3 billion in 2013 in foreign exchange, had equally experienced a decline from 10 per cent in 2014 to 20 per cent in the first quarter of 2015.
He said: “The growth earlier mentioned, however, is being hampered by the inconsistency in implementing the government policy on non-oil exportation. The extant policy on the Export Expansion Grant (EEG) and the utilisation of the Negotiable Duty Credit Certificates (NDCC) had been put on hold; this is having a negative effect on the non-oil sector in particular and the economy in general.
“Many companies have invested in export processing factories to add value to primary products. However, the suspension of these polices has hampered their operations. McKinsey, the global consulting firm, reckons that Nigeria could easily double its agricultural output over the next 15 years by introducing some simple reforms. The association will collaborate with the government, its agencies and other private sector organisations to further boost the expansion of non-oil exports”.
He urged government to address the challenges associated with the implementation of incentives for the non-oil sector, adding that the huge cost of production in the country was impacting negatively on global competitiveness of processors and operators in the real sector.
“The African Growth and Opportunity Act (AGOA) has been extended by another 10 years. Nigeria has another opportunity to access the U.S. markets if various incentives are revived. Government should take this issue seriously as incentives to cushion non-oil export are being frustrated and withdrawn”, he added.