President MuhammaduBuhari’s decision two weeks ago to revive the once suspended Export Expansion Grant (EEG) under the name of Export Credit Certificate (ECC) is one move that has continued to gladden the hearts of Nigerian entrepreneurs, especially those of them involved in export trade.
That resuscitation represents a major step in the ongoing effort to boost the economy partly by strengthening the capacity of Nigerians to engage in international market.
It is also an impetus to produce products that can compete favourably out there in the global trade market, help Nigerian businesses to employ more hands and contribute more value to Nigeria’s real development.
By way of background, EEG Scheme was introduced in 1986 through the Export (Incentives and Miscellaneous Provisions) Act (amended in 1992) to stimulate non-oil exports. The scheme, administered by the Nigerian Export Promotion Council (NEPC), was suspended in 2014 to ensure a review and redesign in order to prevent abuse and ensure that the scheme is fit for purpose.
The incentive was granted in form of a negotiable duty credit certificate (NDCC) utilisable by exporters for payment of import and excise duties. The NDCC has now been replaced with the Export Credit Certificate (ECC) which can be used to settle all federal government taxes such as VAT, WHT, companies income tax etc. It can also be used to purchase government bonds and repay government credit facilities, and debts due to the Assets Management Company of Nigeria (AMCON).
Its advantage is that it provides for claims payable to individual exporters depending upon the value and volume of products exported and the individual rating as per the company baseline data ( both as outlined in the EEG Policy Circular of the Federal Ministry of Finance).
Upon investigation, one discovers that the company baseline data is based upon the audited financial results of the exporting companies and is based on the audited results of the company filed at the CAC (Corporate Affairs Commission) and it verifiable by the NEPC before it even begin to process any EEG application.
This means that how much that is eventually paid out is based upon the claims processed and approved by the EEG Implementation Committee meetings, a committee which draws membership from such agencies of the federal government as the Federal Ministry of Finance, Federal Ministry of Industry, Trade and Investment, the Central Bank of Nigeria, the Nigeria Customs Service, the Federal Inland Revenue Service, the Federal Ministry of Budget & Planning and the Nigeria Export Promotion Council.
A check on the policy document shows that claims are first audited by the Presidential Initiative on Continuous Audit (PICA) which normally includes calling for comprehensive documentary submissions from the individual exporters and also extensive field visits to the exporters’ facilities.
For industry operators, and indeed analysts of the Nigerian real sector, the scheme can therefore be described as a welcome interventionist programme, especially because of its diligent process of approval, with a mindset of accelerating export volume and enabling exporters to diversify their export products and market coverage.
In fact, this writer is of the opinion that President MuhammaduBuhari deserves commendation, not only in resuscitating the initiative, but also preparing the papers for the payment of outstanding Export Expansion Grant estimated at about N1tn
It was the Executive Director and Chief Executive Officer, Nigerian Export Promotion Council, MrSegunAwolowo who revealed the value of outstanding obligations at a forum in Lagos, adding that the Presidency had already passed the papers for the payment of the said sum.
The only gap for now, is that the National Assembly which is expected to okay the proposal, is currently on recess.
The expectation therefore that the honourable house would do the needful immediately upon resumption in the overral interest of the Nigerian economy. This it would do by promptly passing the paper concerning the settlement of the backlogs of the EEG.
The Presidency, has by these initiatives underscored the importance it truly attaches to a reinvigorated export sector, which of course comes with a lot of advantages, including the creation of jobs, value addition, attraction of more foreign direct investment and the enhancement of the Nigerian pride in the comity of nations, that it is able to also play in the international market, as a serious minded exporter.
However, all these values would be harnessed by an approval on time by the Assembly.
One cannot but join millions of other well-meaning Nigerians to therefore urge the honourable and distinguished members to do the needful.
Their positions as representative of their people is one of a huge trust, and comes under test when issues affecting the welfare and generality of Nigerians are concerned.
All over the world, countries are strengthening their internal capacities to trade, they are introducing initiatives to boost the competitiveness of their organisations and corporate entities, knowing the benefits that would accrue.
Statistics on the unemployment rate in the country continues to be of concern, increasing to 18.80 percent in the third quarter of 2017 from 16.20 percent in the second quarter of 2017, according to reports from the National Bureau of Statistics. Incidentally, a vibrant export sector is capable of ameliorating the unemployment situation. This it can do when exporters are able to export more, make more money as this would put them in the best position to engage more hands.
Certainly these realities are not lost on the Honourable members of our National Assembly, the more reason why one expects their prompt action in approving the outstanding bills concerning the EEG.
It is one gesture for which the generality of Nigerians would remember them, and for which posterity would appreciate.
Any true representative of the Nigerian people would certainly back initiatives that support Nigerians’ collective destiny of which the EEG is one.
CamiEzenwa, formerly an associate editor with Financial Standard, a business intelligence newspaper, currently teaches at the Nigerian Institute of Journalism (NIJ) Lagos.