Non-oil exporters seek govt’s revival of EEG scheme
The group also appealed to the President to look into their outstanding Negotiable Duty Credit Certificate (NDCC) claims which has hit over N151 billion.
In order to boost Nigeria’s trade presence in the international market, the federal government established the EEG in 2006 as an incentive to cushion the effect of harsh business environment faced locally by importers and drive non-oil exports revenue.
The incentive, modelled after Brazil’s and China’s, was targeted at earning more foreign exchange, attracting more non-oil investments and creating thousands of jobs, while also making local commodities competitive in the international market.
The EEG, which was operated through the Nigeria Customs Service, with instruments known as NDCCs, was suspended in August 2013 by the previous administration which promised to review it. The review, however, did not happen before the exit of the last administration.
Chairman, Manufacturers Association of Nigeria Export Group (MANEG), Tunde Oyelola said the scheme should be revived on account of its recorded success.
According to Oyelola, operations of the EEG between 2005 and 2013 led to a boost in the value of Nigeria’s non-oil exports from $700 million to $2.9 billion, with export of key commodities to ECOWAS and the European Union.
“Nigeria’s vision is anchored on economic diversification away from a mono-product (oil), transformation from primary commodities to processed and manufactured goods, as well as high levels of efficiency and productivity,” Oyelola said, in a statement.
“However, this vision remains a mirage without a strong commitment to the implementation of the EEG which has proven to be the most veritable tool to achieving the broad objective of economic diversification in Nigeria,” he warned.
According to him, the EEG was suspended unofficially as there was no official pronouncement before its temporary termination, adding that the outstanding debt owed by the federal government to non-oil exporters has pushed players to the precipice.
“Some of our members discounted the prices of their products in the international market in order to secure contracts, hoping to make up the difference from the EEG, but the sudden suspension of EEG has grossly affected their accounts,” he disclosed.
“In addition, some others went into expansion of their operations in order to increase their non-oil export volumes due to expected benefits promoted by EEG. In some other instances, manufacturers borrowed from their bankers with the NDCCs as security, but due to the suspension of the EEG, the bankers have been forced to ask for additional and better collaterals, thereby pushing them into further distress,” he explained.