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By Merit Ibe, [email protected]
Exporters under the aegis of Manufacturers Association of Nigeria Export Group (MANEG) are worried over the backlog of unpaid Export Expansion Grant (EEG) from 2021 to 2023 which runs into billions of naira.
The livid exporters say the scathing development has further rubbished all attempts to boost non-oil export.
The EEG is a post-shipment scheme targeted at stimulating increase in the volume and value of Made-in-Nigeria products in the international market. The scheme is also intended to encourage export of value-added products as against raw agricultural commodities.
The operators, who often face huge cost disadvantages in international market as a result of infrastructural deficiencies, risk and high cost of doing business, see the grant as a relief. They wondered why the government has kept mum over non-payment of the grant.
As the cost of manufacturing in Nigeria reaches stratospheric heights, the exporters are lamenting that the EEG, which would have cushioned the cost, was not forthcoming even as they lose export contracts.
Applauding the scheme, an executive of MANEG and Export Manager, Aarti Steel, Okhai Ehimigbai, explained that the EEG has facilitated the integration of the informal sector exporters into the mainstream economy through proper documentation of their exports and repatriation of their proceeds.
Ehimigbai, however, lamented that the scheme has suffered several suspensions since inception from several governments. He noted that each time the initiative was suspended, there was accumulation of the EEG, “which is what we are suffering today.”
He called on the Minister of Industry Trade and Investment and the Nigerian Export Promotion Council (NEPC) to help clear the backlog so the exporters can breathe.
“When you leave the grant to pile up for long, it becomes so heavy and then they cite fraud as reason for non payment which is wrong.
Government had to pay outstanding of past years because it piled up. The last government saw reason why they should pay it. But as it is today, if we keep leaving it like this, it will kill companies that are exporting.
“One of the reasons for EEG is to soften our cost of production but now that there is no news about it, it is a big problem for us. Non-oil export is going down because nobody is interested in going to sign a contract for export. The cost of foreign exchange to bring in raw materials is high.
“If government is not making a pronouncement about the grant and then all of a sudden we see few years gone and nothing is happening, then exporters fear to take export contracts.
“The cost of production is very high and we can’t compete with the companies in China and India, their products are cheaper and then EEG that is supposed to cushion our own cost is not forth coming.
“So, it becomes a problem and then ECOWAS is a region where we have advantage but we are leaving it to the Chinese and Indians because they have a projection. Nobody is ready to go into long term contract that is why government cannot project in flow from non oil export”, he lamented.
Ehimigbai also lamented that one of the problems the EEG has to contend with is sustainable budgetary allocation.
“Lack of a sustainable budgetary allocation remains a major constraint in the effective implementation of the scheme. The EEG guidelines introduced in 2017 were premised on an annual budgetary allocation to be made. Therefore, there is a need to put in place a sustainable mechanism for backing the policy.
Ehimigbai, who called for tax rebate and special window for exporters and raw materials for production for export, also pleaded with the Federal Government to reduce the number of agencies managing the scheme, noting that it was a case of duplicity of work.
“Another challenge of this scheme is that it is being managed by too many agencies and ministries.
He advised that the government should engage core exporters, like NACCIMA, MAN, MANEG, pre-shipment agencies and other stakeholders.
On her part, the Chairman of MANEG, Mrs Odiri Erewa-Megisson, noted that the export group was working on arranging how the backlog of EEG can be paid.
On the microeconomic environment of the non-oil export business, Erewa-Megisson applauded the federal executive council for the approval of the 2017 to 2020 EEG claims, which also included some of the 38 exporters that were exonerated by the 8th national Assembly.
Erewa-Megisson reeled out some of the challenges clogging the wheel of exporters to include but not limited to high and increasing exchange rates; high cost of energy, multiple levies and taxes, port congestion, unending insecurity, infrastructure deficiencies and smuggling, among others, causing untold constraints on manufacturing operations.
Benedict Obhiosa Maneg Secretary of the group said the EEG claims for 2021, 2022 and 2023 were the current backlogs. “We are doing our best to draw the attention of government to this.”
