Follow Us on Google
Henry Uche
Nigeria’s overwhelming dependence on oil revenue since independence has left huge scares on its development agenda. That indeed explains why most observers believe the negative impact of this endless dependency underlines the need for the country to diversify its economy to develop a robust non-oil export base.
However, while sucessive governments have made pledge to implement strategies in this direction perhaps only the government of President Buhari appears determined to do something decisive. Riding on the back of the last economic recession the government realised that it might be difficult for the Nigerian economy to develop without a strategic programme to grow its non-oil exports.
That explains why government decided to revisit some neglected export promotion policies. This action is in line with the renewed vigour to grow exports,. The government is now getting serious
with one key “tool” in that package-The Export Expansion Grant (EEG). Moxt stakeholder agree that its implementation will boost non-oil exports and Nigeria’s economy in general. Historically, the Export Expansion grant was created specifically to help cushion those disadvantages experienced by Nigeria exporters from a cost perspective due to anomalies in the areas
of infrastructure, Power, monetary/ fiscal distortions and many others Regrettably, the implementation of policies on this grant by various government agencies including the Debt Management office (DMO) has left most exporters extremely astonished.
Some stakeholders have- for instance argued that despite government promises, the key steps to access- ing the grant are not only slow but policies around it are hazy and nebulous.
That explains their call the presidency to intervene to set things right. For
its part the DMO which operates directly with the exporters on this matter has said that it will make disbursement on the principle of what is designated as Reverse Auction Process (RAP), which implies that only exporters who will accept discounted rates will become beneficiaries. Even at that, the DMO is not giving the money to all eligible exporters. Stakeholders see this as extremely controversial.
Ironically, a policy that was approved by Nigeria’s Federal Executive Council with the overwhelming endorsement of the National Assembly is now seen as endangering the country’s capacity to fuel exports, even in modest terms.
Stakeholders even point out that the controversial RAP policy does not take cognizance of the ac- cumulation of debts the exporters have fallen under between 2007 and 2016, and the interests that have piled up.
This is obviously not acceptable to exporters and they are not lying low. Virtually all key local business bodies are also lining up behind them. Under a banner called Organized Private Sector Exporters Association (OPSEA) they have sent a strong Save-Our- Souls letter to President Buhari that exporters are becoming very unsettled in their businesses more than ever and unable to carry out their vital roles.
They are lamenting that the accumulated EEG not paid over the years is biting hard on the export activities of its members. The development, has led to the accumulation of billions of Naira owed exporters between 2007 and 2016.
Consequently, the association is making a three point request on the issue, which are as follows: The Reverse Auction Process (RAP) for issuance of Promissory Notes (PNs) should be reconsidered by the government; the second is that the government (including the Debt Management Office, DMO) should restrict themselves to issuing the PNs as the shortest term feasible for payment, while equal treatment should be meted to all beneficiaries of all cat- egories of PN.
Thirdly, the exporters should be issued PNs with shortest tenure (spread evenly over a maximum period of three years) bearing in mind that payment has been delayed for a period of three to 12 years for member’s claims.
OPSEA recounted that before now, previous administrations had commenced the issuance of EEG to genuine exporters but the grant was later suspended in 2007 due to duplicitous claims and counter-claims by stake- holders over who and who should indeed benefit from the package.
The exporters say government’s inaction is causing mounting challenges to their members. One of such major challenges is the accumulating interests on loans. “We have taken up debts to service the receivables and these debts are incurring further interests with the continuing delay in the payment of EEG claims’, they explain.
OPSEA members play vital role in economic di- versification through their contribution in generating the much needed foreign exchange earnings through export and creating numerous job opportunities via their operations throughout the country.
The body lucidly explains its pains and patience to the President: “Your Excellency sir, we are being constrained to draw your attention to the continued hardship and ill-treatment being inflicted upon the businesses and investors
in strategically important non-oil export sector, especially as it relates to the Promissory Notes (PN) program of the Federal Government of Nigeria
“We, the exporters have been waiting anxiously since the approval from the National Assembly (NASS) for the PN to be issued,” the letter read,
They explain that initial- ly, pressure was mounted on the National Assembly to do its work and give its legislative nod for the issuance of the federal government’s N350billion Promissory Notes to exporters in continuation of the Export Expansion Grant (EEG). This was after the executive arm seems to have done its bit. But now, they stressed, the pressure is now back on the executive to complete what it started by ensuring that the PNs are settled without further delays.
For those who could recall, the presidency has shown remarkable urgency on this project with the Federal Executive Council (FEC) sending three issues for the formal approval of the National Assembly ear- lier in the year. The three executive resolutions both- er on EEG claims, payment of construction contractors and pensions.
Although, NASS is said to have since rectified the latter two items, it was however unclear then
if legislative worked on the EEG claims that were made.
It could be equally recalled that diversification of the economy is one of the main policy initiatives of the Buhari administration that is aimed at shift- ing the nation’s economy from oil-based to non-oil sectors.
The Federal Executive Council (FEC) in one of its weekly meetings gave approval for the payment of the EEG Promissory Notes. It was equally gathered that the EEG claims by the non- oil exporters have been processed and prepared
by the federal government implementation committee with members drawn from the Federal Ministry of Finance, Federal Ministry of Industry, Trade and Investment, Central Bank of Nigeria, Nigeria Customs Service, Federal Ministry of Budget and Planning, Federal Inland Revenue Service as well as Nigeria Export Promotion Council.
Even the N350 billion EEG claim is said to have been audited by officials of Presidential Initiative on Continuous Audit (PICA) since last year but exporters are bewildered that even with all the said in- puts on the matter, nothing positive is yet to come their way in terms of payment. Stakeholders strongly advice that the federal government should carry private sector players along if they want to realize their economic diversification agenda.
They believe that faithful implementation of the EEG policy is the needed elixir to help track performance in the non-oil sector and accelerate the rate of indus- trial growth in the country.
The non-oil sector is seen to have great potentials, including the capacity to sustain the economy and ensuring inclusive growth, as in the case of agriculture.
Convincingly, the President Mohamadu Buhari led government has spelt out its plans to move the Nigeria out of the persistent dependence on oil revenue by getting other sectors up and working.
It has been observed in the renewed interest in agriculture and solid mineral sectors with the hope of meeting domestic consumption and enough to export to earn foreign exchange.
This policy direction has since catalyzed activities in the non-oil sector, including exports. But it appears there is currently a clog in the wheel of progress.
