Agro-Allied Operators Tackle FG Over N175b Unpaid Export Grants | Independent Newspapers Limited
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Agro-Allied Operators Tackle FG Over N175b Unpaid Export Grants

Posted: May 29, 2015 at 12:00 am   /   by   /   comments (0)

By Sylvester Enoghase – Lagos


Key operators in the nation’s agricultural sector have been lamenting over the federal government’s failure to fully implement the policies of Export Expansion Grant (EEG) as well as Negotiable Duty Credit Certification (NDCC) which were fashioned out by the Jonathan Administration to principally boost the nation’s Rice value chain.

In a Letter to outgoing President Goodluck Jonathan, copied to the Co-ordinating Minister of the Economy/Finance, Dr. Ngozi Okonjo-Iweala, the operators congregating under the auspices of Federation of Agricultural Commodity Associations of Nigeria (FACAN), regretted that the Government reneged on the agreement to implement the EEG policy framework for 2014 as announced by the Finance Ministry.

The letter, signed by FACAN’s National President, Dr. Victor Iyama, observed that member-companies and organisations in the Agriculture and agro-allied sector form the bulk of the non-oil exporters in the country and contributes over 80 per cent of the nation’s non-oil export earnings.

According to the association, government’s lukewarm attitude towards boosting the non-oil sector has continued to negatively affect sustained economy growth.

Part of the Memo stated: “Our members have relied on the EEG and NDCC policies to plan their investments and make their pricing decisions. Now, government has been foot-dragging on the issue of implementation of these policies. It is rather saddening that while the Federal Government regularly pays fuel subsidy to marketers with interests and exchange rate adjustments, it (FG) is refusing to allow the utilization of NDCCs which has been signed by the Federal Ministry of Finance and disbursed to the exporters as a “legal tender.” Our members have been patient but have been subjected to continued neglect,” FACAN declared.

Actually, analysts say that the massive investment drive in local food production cannot be realised so long as the nation continue to spend huge foreign exchange on rice importation. According to reliable sources, Nigeria expends a whopping sum of $9 billion annually on wheat, rice, sugar and fish importation, products which the nation could mass-produce or even export given the right political will and commitment. Again, the figure could be reduced by 50% within three years if the Government religiously implements the EEG and NDCC utilization policies.

We gathered that the EEG Policy Review was on the cards throughout the duration of Jonathan administration (2011 – 2015).

In the letter to the outgoing President, FACAN further declared: “We urge you to kindly ensure that the appropriate details are shared with the Transition Committee so that the incoming administration of Muhammadu Buhari would be assisted to complete this process soonest.”

FACAN said following the confusion that arose, exporters “do not know if the EEG Scheme was cancelled, though there was no official pronouncement on the matter.

The organisation disclosed that two official files on EEG Implementation Committee Meeting have been awaiting approval by the Ministry of Finance since 2014, adding that the documents deal on the approved EEG claims of various exporters up to 2013.

“We understand that the Federal Ministry of Finance was part of the Committee which scrutinised and approved the claims. The sitting on the files is totally unfair to the exporters concerned as they are being denied NDCCs that are due to them for no fault of theirs, simply because of the refusal of the finance ministry to approve and release the files. We implore you to please approve the files and allow the NDCCs to be disbursed to the exporters,” the letter stated.

Our investigations revealed that due to the undue delay, exporters have really faced hard times in view of their EEG claims still pending for processing and approval by the Nigerian Export Promotion Council (NEPC).

“No EEG Inter-Ministerial Committee Meeting has been done for the past 18 months. The EEG Inter-Ministerial Committee is chaired by Ministry of Finance and is the final decision making body for the EEG scheme. There are many important issues on which decision is still pending, some of which are as follows: 300 days rule for repatriation of export proceeds – to be extended to 360 days for exports done during 2009 and 2010 owing to the prevailing global financial crisis; Timeline to NEPC to complete the processing of pending claims within a specified period and the EEG claims to be processed on FIFO (first in first out) basis so that it is transparent and fair to every exporter. At present, the claims are taken up for processing on an ad-hoc basis and this has resulted in a situation where some exporters have got almost their entire claims approved and disbursed while many others have substantial claims stuck at NEPC for years; we believe that over N50billion of EEG claims of exporters are pending for processing for the period up to 2013.”

FACAN also claims that it has become an increasingly difficult and uncertain process for the exporters to collect their NDCCs. “Even after the exporter finally gets the NDCCs, the Nigerian Customs Service, has been allowed to act with impunity when they have restricted the use of NDCCs or stopped the use of NDCCs altogether.”

The group also noted that the exporters agreed, in February 2013, under pressure, to pay 7% to customs for utilisation of NDDCs, even though it was outside the EEG policy, in the hope that this would result in smooth usage of NDDCs. “That hope has been betrayed. We are also meant to understand that since August 2013, the NDCCs utilisation has been barred largely at the instance of Ministry of Finance. It was a solitary instance of your “magnanimity” where the Ministry of Finance allowed 5% of outstanding NDCCs to be utilized.”

The exporters have NDDCs of over N125billion in their hand. They have been stuck with it for several years now. Many exporters are now wondering if they have been handed a “dud cheque” by Ministry of Finance in the form of NDCCs. “We are yet to come to terms with the fact that we have been handed a “dud-cheque” by government which is against fiscal policies and financial guidelines,” the letter stated.

FACAN noted that non-oil exports have grown fivefold between 2005 and 2011 which is a much higher rate of growth than the Nigerian GDP, noting that since 2011, the growth rate has stagnated and now even reversed because of the poor implementation of the EEG policy.

“We believe it is time that we understand the urgency of the situation and arrest further decline. We are confident that if exporters are provided some support and understanding, we can get non-oil exports back on the path of rapid growth which will not only be beneficial to the exporters but also the Nigerian economy through massive job creation and increased foreign exchange reserves which are two of our biggest challenges today,” the group said.