MANEG Executive Seeks Trade Minister’s Intervention In Payment Of Export Grant Backlog
Okhai Ehimigbai, an executive of the Manufacturers Association of Nigeria Export Group (MANEG) has sought the intervention of the Trade Minister, Doris Uzoka-Anite in the payment of the backlog of the unpaid Export Expansion Grant (EEG) from 2021 to 2023, which has further increased their pain and hindered the performance of the non-oil export segment of the economy.
The EEG is a post-shipment scheme targeted at stimulating an increase in the volume and value of made-in-Nigerian products in the international market. The scheme is also intended to encourage the export of value-added products as against raw agricultural commodities.
Ehimigba who is also the Export Manager of Aarti Steel, explained that the EEG which has facilitated the integration of the informal sector exporters into the mainstream economy through proper documentation of their exports and repatriation of their proceeds has
suffered several suspensions since inception from several governments.
The grant is a relief to operators, who often face huge cost disadvantages in the international market as a result of infrastructural deficiencies, risk and high cost of doing business.
He wondered why the government had kept mum over the payment of the grant, noting that each time the initiative was suspended, there was an accumulation of the EEG, “which is what we are suffering today”, and also called the Nigerian Export Promotion Council (NEPC) to do something concerning the backlog to relieve exporters of the burden.
“When you leave the grant to pile up for too long it becomes so heavy and then they cite fraud as the reason for non-payment which is wrong”, he stated, adding that the government had to pay the outstanding of past years because it piled up.
“The last government saw a reason why they should pay it. But as it is today, if we keep leaving it like this it will kill the 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 signing an export contract. The cost of foreign exchange to bring in raw materials is high.
If the government is not making a pronouncement about the grant and then all of a sudden we see a 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 which is supposed to cushion our own cost is not forthcoming. So it becomes a problem and then ECOWAS is a region where we have an advantage but we are leaving it to the Chinese and Indians because they have a projection. Nobody is ready to go into a long-term contract, that is why the government cannot project the flow from non-oil exports.”
He also lamented that the unsustainable budgetary allocation is one of the problems the EEG has to contend with, saying it 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.
Ehimigba, who called for tax rebates and special windows 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.
“The government should engage core exporters, like NACCIMA, MAN, and MANEG”, he said
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