FG’s N85bn fund seen driving credit, export

The N85 billion budget commitment to export processing zones, Export Expansion Grant and recapitalisation of development banks in Nigeria is seen as a key driver to the real sector in 2017.

“I see this pushing up export earnings in Nigeria. This could also free credit to small business,” said Ifeanyi Okeleke, CEO of Kenfrancis Integrated Farms Limited, an agro-industrial firm located in Anambra State.

“The key point here is implementation of the budget to achieve the set objectives,” said Okeleke.

President Muhamadu Buhari in his 2017 budget announced that N50 billion would be set aside as Federal Government’s contribution for the expansion and development of new export processing and special economic zones.

Buhari also voted N20 billion for the revival of the Export Expansion Grant (EEG) in the form of tax credits to companies.

The president also announced that N15 billion has been voted for the recapitalisation of the Bank of Industry and the Bank of Agriculture, even as the Development Bank of Nigeria is expected to begin with US$1.3 billion. This means a total of N85 billion has been voted for the real sector in 2017.

Manufacturers see this as a step that could steer the growth of the real sector, including exports.

Ede Dafinone, CEO of Sapele Integrated Industries Limited, said the fund is key to settling exporters who are owed various amounts of money by the past administration, adding that it could draw more companies to export if properly implemented.

 Dafinone, however, wondered how possible it would be for the government to apply tax credits on exporters whose proceeds are tax-free.

 “It’s going to have a positive impact on export business,” said Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group.

 “At least it means exporters now have an incentive that will enable them to compete in the global market,” Oyelola said.

Special economic zones (SEZ) are designated areas where economic regulations differ from other areas in the same country. Export processing zones are areas where exporters process their products specifically for export. In many cases exporters do not pay tariffs and certain taxes. Example of this is the Lekki Free Zone in Lagos. Similarly, Export Expansion Grant is an incentives given to exporters to enable them stay competitive in the global market.

Chuma Ezedinma,  officer in charge of the United Nations Industrial Development Organization (UNIDO) Regional Office, Nigeria, said there is virtually no country in the world that has not become an economic power house without the development of Special Economic Zones, including industrial parks.

“Nigeria can actually become an industrial power house if each state in the federation develops at least one industrial park or agro industrial zone or a special economic zone,” Ezedinma said.

ODINAKA ANUDU