●Manufactures hail use of certificate for tax, other payments
All over the world, production sector enjoys special incentives, either in the form of easy access to fund at low interest rate, tax holiday or other fiscal measures aimed at promoting competiveness at global market.
In Nigeria, attempt was made in 2005 to key into this global trend with the introduction of Export Expansion
Grant (EEG), a post shipment incentive designed to assist exporters to increase the value and volume of their exports, diversify their export markets and enhance their global competiveness, despite the high cost of production occasioned by infrastructural deficiencies.
With EEG, each manufacturers was entitled to be issued, by relevant authority, a transactional certificate, the Negotiable Duty Credit Certificate (NDDC), which had monetary value for the clearance of their imported raw materials at the nation’s gateways.
The certificate issued by the Nigeria Export Promotion Council, through the direct supervision of the Ministries of
Finance, Trade and Industries became the legal tender recognised by the Nigerian Customs Service (NIS) for the clearance of raw material imported by the manufacturers.But to the bewilderment of non- oil exporters,
three years ago, the Nigeria Customs service stopped the acceptance
of the certificate, as usual,for the clearance of imported raw materials at the nations ports. This followed announcement by the government that the scheme had been suspended due to abuse by some of the beneficiaries.
Since then a number of export oriented companies had closed shop until few weeks ago when the government announced that it had concluded the comprehensive review of the scheme hence the lift of the three- year old suspension.
The lift, as announced attracted joy and commendation from manufacturers, who said although government fiscal
measures caused a set back to their upward movement, many companies could now overcome their comatose condition with the resumption of the EEG
The president of the Manufacturers Asso0ciation of Nigeria, Dr. Frank Udemba Jacobs commended the Federal Government for lifting the three years old suspension of the scheme, saying export would now be stimulated to generate employment and improve foreign exchange earnings for the government , if well implemented
“I want to commend the Federal Government for the lifting of ban on the Scheme and measures taken so far at encouraging productivity in non-oil sector, particularly the manufacturing sector.
Export Expansion Grant (EEG) is a laudable policy articulated by the Government in 2005 that significantly catalyzed the growth of non-oil manufacturing export of Nigeria.
Up until 2014, the Negotiable Duty Credit Certificate (NDCC) which was the payment instrument was duly redeemed with ease and honoured by the Nigeria Customs Service (NCS) when presented for import duty payment. The effect of the policy was an up-surge in non-oil export from $700 million in 2005 to $2.9 billion in 2013 (Nigerian Export Promotion Council-NEPC). Unfortunately, in 2014, the Federal Government suspended the implementation of the policy leading to backlogs of unpaid and unutilized NDCC just as the Nigeria Customs Service stopped accepting
the instrument for payment of import duties. The implication is a downward trend in non-oil and manufacturing exports since then.
Certainly, the newly resuscitated EEG if properly implemented will lead to further growths in non-oil export in the
country both in the short and long runs.
According to him, the resuscitated EEG would further strengthen non-oil export and support the industrial sector, especially with the expanded use of the new Negotiable Export Credit Certificate (NECC) for payment of Company Income Tax, VAT, Withholding as well as purchase of Federal Government Bonds, settlement of credit
facilities by Bank of Industry, NEXIM Bank & CBN intervention Facilities, and settlement of AMCON liabilities. “No
doubt, if the new guideline isnproperly implemented, non-oiland manufacturing exports will improve”.
The man boss described Manufacturers as core stakeholders of the EEG Scheme, adding that the resuscitation of
the Scheme was a welcome development. “This is also apt at this time that the sector is grappling with various macroeconomic challenges, particularly low consumer demand. The persistent high inflationary condition has significantly eroded the purchasing power of household income and severely lowered aggregateconsumption in the economy.
With the mounting inventory of finished manufactured goods in the manufacturing sector, the new EEG can create new export markets for the sector and improve the nation’s foreign exchange earnings through export proceeds”.
Continuing, he said: “Export Expansion Grant scheme is a very veritable scheme that supported the development of the non-oil sector through increased export earnings within the years it was implemented. When EEG scheme was suspended in January 2014, the official reason adduced by the government was that they want to review the scheme due to perceived abuse of the scheme.
However, it is important to note that the scheme is a kind of subsidy which is funded by the Government in the face of increasing fiscal responsibilities.
This is the reason MAN is elated with the resuscitation of the scheme even with very important modifications. I am also aware that the EEG processes have been reviewed to prevent excessive use of initiatives, efficient validations of relevant documents, enhanced transparency,accountability and inclusiveness.
MAN will as usual continue to support NEPC to actualize its mandate and ensure that our esteemed and responsible members continue to be above board in filling their claims and all other EEG transactions.”
On the effect of the prolong suspension of the scheme, he said “it is important to note that the EEG scheme is designed to generally improve the fortune of the economy. The argument is that with more non-oil export earnings resulting from EEG scheme, activities of the non oil sector will expand leading to high contribution to national
output and labour employment.
Consequently, since the suspensionof the scheme in January 2014, non-oil export has decelerated which is an indication of receding activities of the sector and its contributions to output growth and employment. Data from Nigerian Export Promotion Council (NEPC) shows that non-oil export sharply slowed by 8% from USD2.97 billion in
2013 to USD2.71billion in 2014 due to the suspension.
The MAN president has a word for the beneficiaries and the managers of the scheme when he said: “MAN has reviewed the new EEG guideline and found it to be interesting. Importantly, the new scheme has a clearly spelt out guideline on the process of application and claims to guide beneficiaries. I am also aware that government is committed to ensuring that beneficiaries get their grants on time through the provision of annual budgetary allocation strictly for this purpose. However, it is important that the implementation should be based on merit and devoid of arbitrary selection.
Also, the beneficiaries should participate in the Scheme with sincerity of purpose especially in the areas of claims. In
that way, the implementation