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For more three years into the concluding administration of President Muhammadu Buhari’ first term, the government has been assuring the clearance of all arrears of budgetary allocations amounting to billions of naira meant for Export Expansion Grant (EEG) between 2015 and this year to no avail.
Contrary to the promises from the Chief Executive Officer, Nigerian Export Promotion Council (NEPC), Olusegun Awolowo, that the payments are underway, it appears that endless promises may continue even into the second term, thus creating the feeling of loss of confidence by the Organised Private Sector Exporters Association (OPEXA).
The exporters, led by its Executive Secretary, Jaiyeola Paul Olarewaju, had continued to go down in their activities due to inability of the Federal Government to do the needful over the years.
Recall that the payment of EEG was halted in 2014 but the current administration announced its return but is yet to put paid to the continuity.
OPEXA boss confided in Business Hilights Abuja Bureau chief that the non-implementation of budgetary allocations amounting to N29.28 billion meant for Export Expansion Grant (EEG) in both 2017 and 2018 has impaired their activities and further places strong question mark on the policy consistency claims of the present administration in driving export promotion and economic diversification campaign.
According to Olarewaju, making provision for EEG in the country’s yearly budget would create transparency and confidence of non-oil investors and will further encourage more investors into exporting segment of the productive sector of the economy.
He recalled that during a recent inter-ministerial monitoring committee meeting held with Minister of Finance, Mrs Zainab Ahmed, OPEXA member expressed deep concern over non-implementation of the EEG budget since 2017.
However, light seems to be appearing soon at the end of the tunnel if the pledges of the Chief Executive Officer, Nigerian Export Promotion Council (NEPC), Olusegun Awolowo, last week is anything to go by.
He revealed that the government was now set to clear the EEG arrears to exporters from 2007 to 2016 but was silent on 2017 and 2018.
In his submission, “The reactivation of the EEG scheme, after its technical suspension in 2014 and settlement of the outstanding claims owed exporters, was in line with the Federal Government’s focus on diversification of the economy through non-oil exports.
“The assent in January 2019 by the National Assembly of the first batch of the request and the subsequent directives by the Minister of Finance to the Debt Management Office for the settlement of the EEG covering backlogs of ten years for 270 companies with a total value of N195.08bn will bring succour to the export sector.
“We also have a positive signal that the National Assembly will soon pass the second batch of the approval for the remaining 39 companies with a total value of about N126bn only”.
While agreeing that the EEG budget allocation for 2017 was N16 billion, which was not implemented and it elapsed probably due to non-utilisation, he noted that “In 2018, the budgetary allocation of N13.28 is yet to be implemented and we understand that less than N2 billion has been approved for disbursement by March 2019.”
Awolowo was quick to concur that “The 2019 budgetary allocation for EEG was surprisingly reduced to N5.12 billion, which appears arbitrary and inconsistent with government policy to grow non-oil exports.”
Explaining more, OPEXA leadership averred that “Diversification of the economy was a policy imperative and the government should be commended for reviving the moribund EEG scheme.”
The association further suggested the retrieval of un-utilised 2017 budgetary allocation of N16 billion and mitigates the shortfall in the 2019 EEG budget through a supplementary provision.
“Annual budget allocation should be in the range of N60 billion but not less than the provision for 2017, in any case since exports are growing and we want the government to make a clear statement on future policy for EEG,’’ Olarewaju said.
OPEXA further called for the urgent intervention of the Federal Government in approving the utilization of EEG budget for 2018 to enable the issuance of Export Tax Credit Certificate, stressing that “The importance of non-oil export to the country and quoted the CBN, which put the figure for 2016 as N675 billion and was increased to N1, 075 billion in 2017.”
Olarewaju disclosed that “This trend has continued in 2018 with export earnings for the fourth quarter of 2018 valued at 1.16 billion dollars, representing a 85 per cent increase over the corresponding quarter in 2017.”
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