By Gabriel Ewepu

In this interview, the Chairman of Non-oil Exporters in Nigeria, Chief Ede Dafinone, spoke on the inadequacy of N1 billion in 2021 budget for Export Expansion Grant, EEG, claims by non-oil exporters, and what the Federal Government should do to boost export business for healthy competition in the global market including other issues.

Excepts:

Being the Chairman of Non-oil Exporters in Nigeria, what should be done by Government to boost the Export Expansion Grant, EEG, including sustainability?

The Export Expansion Grant, EEG, scheme stalled in 2014 and was restarted in 2017. The scheme was restarted with a backlog of unpaid claims of approximately N330 billion. Since 2017 processing of EEG claims has yet to fully recommence and there is thus a further backlog being created that some estimate is as high as N200 million at today’s date.

To ensure the sustainability of the EEG the government, therefore, needs to ensure that not only are the claims processed on a timely basis but there are sufficient budgetary allocations to ensure that the claims can be paid promptly.

The 2021 draft budget included just N1 billion for EEG claims and this mirrors the decline in EEG budgetary allocations over the past three years.

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Sir, among your members what do you have as an internal control to ensure they meet the government’s criteria for access to the EEG?

The members of the Export Group are all members of MAN and are subject to some basic scrutiny before their admission as members.

More significantly the applications for EEG are subjected to several layers of verification both from within the NEPC to other government agencies such as the Nigerian Customs Service and the Central Bank of Nigeria among others.

The multi-layered verification processes ensure that unqualified applications for EEG are easily detected and flushed out.

Which areas of the EEG policy are of concern to you that you want the government to improve on?

The EEG rates were initially set by the government to ensure that the disadvantages suffered by Nigerian exporters as a result of poor or missing infrastructure would be adequately compensated for and thus allow Nigerian exporters to break into new markets and compete effectively on price.

The EEG rates have however been repeatedly slashed and at this rate may soon reach a level where the grant will barely cover the additional costs exporters bear in submitting applications for the grant. This would completely defeat the key objective of the grant in ensuring the competitiveness of our products in overseas markets.

In your assessment as stakeholder, has the EEG achieved its aims and objectives since inception in promoting non-oil export business?

The statistics are widely available and these show a very significant rise in the value of our exports especially in the period 2004 to 2014.

The reverse however is equally true for periods where the scheme was stalled and the value of non-oil exports drops significantly as evident in the years 2014 to 2018.

What are you doing as an organization to press on government to allow non-oil exporters in the agric sector to have unfettered access to their forex as against recent Central Bank of Nigeria’s policy ordering banks not to give exporters access to their money?

The CBN has stated that exporters (in all sectors) have “unfettered access to the foreign exchange arising from their export revenues. However, in defining unfettered access the CBN has required that exporters may only sell their export proceeds to approved agents (Banks) and at approved rates as artificially defined. Exporters, therefore, are currently selling their export proceeds at rates well below what would be a market-determined rate.

To counter this Manufacturers Association of Nigeria Export Group, MANEG, continues to make presentations to CBN and other relevant government agencies to allow exporters to truly unfettered access to their foreign exchange once this is properly and formally remitted back into the Nigerian banking system.

What do you think could really assist non-oil exporters beyond the EEG?

There needs to be continuous monitoring of the difficulties in doing business and for government policies that are anti-business to be nipped in the bud while they are still on the drawing board.

The closure of our land borders has had a significant impact on our cross border trade and this will still have a long term impact on the investment in regional trade going forward. This is particularly delicate as we commence the AfCFTA as we need to strengthen our export capabilities at this time.

More recently CBN has required shipping companies to confirm Nigerian Export Proceeds, NXP’s before shipments may proceed. Whilst this policy ensures that more of our exports are captured in the formal sector the modalities for this confirmation were not fully in place and shipments are currently being delayed at the ports by a minimum of seven days.

What have you done on the exclusion of 38 companies from among benefiting companies under EEG?

38 companies were excluded from the National Assembly approval for participation in the government’s Promissory Note Programme granted in December 2018. These companies are some of the largest capitalised companies in the country with the highest levels of corporate governance. MANEG has met with the leadership of the National Assembly as well as government officials at the Ministry of Industry Trade & Investment and Ministry of Finance. Together with the executives at MAN, we will continue to lobby the two arms of government on behalf of our members

Vanguard News Nigeria