• Tuesday, February 27, 2024
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Non-oil exporters’ outstanding NDCC claims hit N151bn

Non-oil-export
Nigeria’s non-oil exporters are having a rough time as Negotiable Duty Credit Certificate (NDCC) claims from the suspended Export Expansion Grant (EEG) have reached N151 billion.
While N64 billion represents the lump sum for unused NDCCs, N87 billion is for yet-to-be-honoured EEG claim applications already submitted to the Nigerian Export Promotion Council (NEPC), Real Sector Watch has found. A section of non-oil exporters says the outstanding claims are actually much more than N151 billion.
The EEG, which was the only incentive from the federal government to boost non-oil exports, was suspended in August 2013.
It was operated through the Nigeria Customs Service, with instruments known as NDCCs. The previous Nigerian administrations had suspended it eight times before August 2013. Ngozi Okonjo-Iweala, then coordinating minister for the economy, claimed that the scheme was suspended for review, saying that the administration was planning to come up with an upgraded scheme that would spike non-oil exports. But this did not happen before the exit of her principal, Goodluck Jonathan.
Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group (MANEG), said the scheme should be re-started on account of its recorded success. According to Oyelola, operation of the EEG between 2005 and 2013 led to a boost in the value of Nigeria’s non-oil exports from $700 million to $2.9 billion, with export of key commodities to ECOWAS and the European Union.
“In terms of outstanding claims, some of our members discounted the prices of their products in the international market in order to secure contracts, hoping to make up the difference from the EEG, but the sudden suspension of EEG has grossly affected their accounts,” he disclosed.
“In addition, some others went into expansion of their operations in order to increase their non-oil export volumes due to expected benefits promoted by EEG.  In some other instances, manufacturers borrowed from their bankers with the NDCCs as security, but due to the suspension of the EEG, the bankers have been forced to ask for additional and better collaterals, thereby pushing them into further distress,” he explained.
Some exporters say that the scheme was suspended unofficially as there was no official pronouncement to this effect.
Others argue that the NEPC, which was assigned to manage the scheme, has developed cold feet, having failed to request the baseline data from non-oil exporters.
“We wonder why the NEPC has failed to call for the baseline data,” a non-oil exporter, who chose to speak on the condition of anonymity, said.
“We are convinced that the new administration wants to diversify the economy and we are confident this will be re-started soon. So tell me, what happens if the new government says ‘start’? The NEPC will rush the baseline data and so many accounting mistakes will be made, similar to what the Customs did in December 2014,” the non-oil exporter said.
The non-oil exporter said the baseline data, which determine who gets what, needs to be operational, wondering why applications for the EEG for 2013 and 2014 are yet to be processed by the NEPC.
 In an economic review held last week, Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), said there is need to review the EEG guidelines to enable the incentive to fully achieve its desired objectives.
In a recent interaction with our reporter, Ede Dafinone, CEO, Sapele Integrated Industries Limited, wondered why a country desirous of economic expansion amid crude oil crash should ignore a critical sector like non-oil sector. According to Dafinone, the only way Nigeria can survive is to take the non-oil export sector seriously by ensuring the scheme is given the needed attention.
“You look at the number of jobs the sector can create. You look at economic diversification and expansion. You look at its multiplier effect on other sectors and wonder why a scheme like this would be ignored,” he said.
“You cannot expect much difference when the only incentive for the sector was suspended unofficially,” he added.
 ODINAKA ANUDU