Relief for exporters as FG agrees to settle N119bn EEG debt

The Federal Government has agreed to settle part of over N119 billion debt owed exporters who participated in the Export Expansion Grant (EEG) scheme.

Non-oil exporters who participated in the suspended EEG scheme are being owed over N119 billion via their Negotiable Duty Credit Certificate (NDCCs), which are documents that serve as alternative to cash payment of export incentive claims. Negotiable Duty Credit Certificate (NDCCs) are also used to settle import duty payment due to government.

A document obtained by Real Sector Watch and signed by Okechukwu Enalamah, minister of industry, trade and investment, shows that the Federal Government is planning to settle the debt using non-transferable tax credits, which will be applicable to taxes collected by the Federal Government.

The government, however, may not settle all of the debt as there are indications that the present administration can only fix those it is convinced are actually owed.

The FG said there would only be payment on the approved liability for unused NDCC certificates that are either in the custody of exporters or awaiting issuance in the Federal Ministry of Finance, after the conduct of an audit to verify the accuracy and validity of the amounts due.

“All claims which have been received by the EEG Secretariat and not completely processed at the time of the suspension should go through the appropriate processing procedures,” said Enalamah in the document, which was a presentation made at a meeting with manufacturers in Lagos on October 27.

Real Sector Watch reported last Monday that the FG was finally considering including the EEG scheme in annual budgets, after months of dilly-dallying on the scheme.

The EEG Scheme was introduced by the Federal Government in 1986 to improve the competitiveness of Nigerian products and commodities. The scheme operated with the Negotiable Duty Credit Certificates (NDDCs).

The essence of the scheme was to ensure the country earned more foreign exchange through the non-oil export sector. The scheme, however, was suspended in August 2013 by the immediate past administration on the claims there was an abuse of the scheme by exporters. The scheme has been under review since then.

Manufacturers and exporters say the suspension of the scheme has hampered Nigeria’s capacity to earn foreign exchange through non-oil exports.

“This is the time to support exporters. However, when you continue to suspend this type of scheme that will support exporters at a time you don’t have foreign exchange in your country, there may not be end in sight for your currency crisis,” Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group, told Real Sector Watch recently.