Nigerian exporters have demanded the provision of N70 billion in the 2020 budget for payment of a grant designed to help them increase their non-oil exports, as shortfalls have accumulated since 2017.
The Organised Private Sector Exporters Association (OPEXA) wants the amount to be paid for the Export Expansion Grant (EEG) to exporters next year, it’s executive secretary, Jaiyeola Olarewaju, said in a statement on Tuesday in Abuja.
Olarewaju decried the persistent inadequate disbursements of the new EEG by the implementing agencies since the scheme was reintroduced as incentive to ensure exporters’ competitiveness in the international market.
“We reiterate our concern at the meagre budgetary allocations and lack of proper implementation by the implementing agencies such as ministries of industry, trade and investment, finance, national planning and the Nigerian Export Promotion Council (NEPC).
“According to NEPC estimates and going by prevailing exports, an annual budget provision of not less than N60 to N70 billion will suffice to meet policy commitments. The government agencies and CBN have real-time data on which realistic projections can be made,” he said.
OPEXA’s breakdown revealed further that the 2017 budgetary allocation of N16 billion was not implemented and that out of the 2018 allocation of N13.28 billion, only N4 billion was paid just in June 2019, leaving a balance of N9.28 billion.
“To the utter surprise of the sector, the budget for 2019 was reduced to N5.12 billon. This is totally arbitrary in spite of exports growing through the years and the EEG provision is being reduced,” the OPEXA boss said.
Olarewaju however commended the EEG policy and urged the Federal Government to show sincerity and commitment to generate confidence in its policies.
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He said that OPEXA had acknowledged in its paper presentation recently that most developing countries support exports with incentives.
He said that Nigerian exporters were suffering from cost disadvantages due to infrastructural constraints, which had resulted in a high cost of doing business.
“Therefore incentives are required to cushion such disadvantages and make our exports more competitive.
“Since the reintroduction, exporters embraced the new policy in good faith by investing in export processing factories and made commitments to foreign buyers, which improved statistics of non-oil export,” he said.
OPEXA quoted the CBN data as indicating that non-oil exports in 2016 increased from N675 billion to N1, 075 billion in 2017, while in 2018, non-oil exports increased to N1, 367 and the trend continued in 2019.
Olarewaju, however, lamented that three years after the policy pronouncement with three budget circles, the EEG was still confined to the files of the implementing agencies with “only a minuscule disbursement so far. The exporters are the crossroads again”.
EEG is one of the export incentives introduced by the Federal Government through as amended by Export Incentives and Miscellaneous Provision Act, No. 65 of 1992, Cap, E19, Laws of the Federal Republic of Nigeria.
It is a post-shipment incentive designed to improve the competitiveness of Nigerian products and commodities and expand the country’s volume and value of non-oil exports.
