Post by Trade Coach on Mar 24, 2014 15:50:00 GMT 1
Manufacturing exporters count losses as NDCC suspension persists
Given the persistent suspension of the Negotiable Duty Credit Certificates (NDCCs), manufacturing exporters in the country have continued to count their losses, while appealing for reinstatement.
NDCCs are instruments used for the Export Expansion Grant (EEG), a scheme introduced by the government to assist non-oil exporters in the country. NDCCs serve as incentives, ranging from 5 percent to 30 percent of export value, to exporters.
BusinessDay gathered that the use of NDCCs was, however, suspended on August 22, 2013, when the Nigeria Customs Service (NCS) stopped recognising the instruments.
“We used to factor in the benefits of the NDCCs into our export pricing,” said a senior official of a top-notch manufacturing export company, who spoke with BusinessDay’s Real Sector Watch on the condition of anonymity.
“This was the only way we were able to compete in the international market. But since the suspension, our prices have been relatively higher, making it difficult to compete favourably price-wise, and make profits,’’ the official added.
An official who is in the business of exporting food and beverage products told BusinessDay that the inability of manufacturers to use the NDCCs to pay for import duties of raw materials was already having negative impact on cost of production, adding that this was already affecting the performance of non-oil exporters.
The Organised Private Sector (OPS) had earlier given BusinessDay some funding options for the scheme. Two of such are creation of budgetary allocation and creation of Non-oil Export Development Levy for the scheme.
The OPS also suggested a 2 percent levy on Cost, Insurance and Freight (CIF) value of all imports as well as 1 percent levy on export of crude oil with a view to using the proceeds to fund the EEG scheme.
Ngozi Okonjo-Iweala, co-ordinating minister of the economy and minister of finance, had in a chat with the Manufacturers Association of Nigeria (MAN) last month in Lagos said government was reviewing the EEG scheme with a view to making it sustainable.
But a key official in the manufacturing sector advised the government to involve available business professionals in the process, contending that the scheme had failed because key and knowledgeable officers were not involved. The official stated that while EEG was being discussed, other schemes for the ports, trade fairs, among others, should be introduced.
Source: businessdayonline.com/2014/03/manufacturing-exporters-count-losses-as-ndcc-suspension-persists/#.UzBC-M6mqjs
Given the persistent suspension of the Negotiable Duty Credit Certificates (NDCCs), manufacturing exporters in the country have continued to count their losses, while appealing for reinstatement.
NDCCs are instruments used for the Export Expansion Grant (EEG), a scheme introduced by the government to assist non-oil exporters in the country. NDCCs serve as incentives, ranging from 5 percent to 30 percent of export value, to exporters.
BusinessDay gathered that the use of NDCCs was, however, suspended on August 22, 2013, when the Nigeria Customs Service (NCS) stopped recognising the instruments.
“We used to factor in the benefits of the NDCCs into our export pricing,” said a senior official of a top-notch manufacturing export company, who spoke with BusinessDay’s Real Sector Watch on the condition of anonymity.
“This was the only way we were able to compete in the international market. But since the suspension, our prices have been relatively higher, making it difficult to compete favourably price-wise, and make profits,’’ the official added.
An official who is in the business of exporting food and beverage products told BusinessDay that the inability of manufacturers to use the NDCCs to pay for import duties of raw materials was already having negative impact on cost of production, adding that this was already affecting the performance of non-oil exporters.
The Organised Private Sector (OPS) had earlier given BusinessDay some funding options for the scheme. Two of such are creation of budgetary allocation and creation of Non-oil Export Development Levy for the scheme.
The OPS also suggested a 2 percent levy on Cost, Insurance and Freight (CIF) value of all imports as well as 1 percent levy on export of crude oil with a view to using the proceeds to fund the EEG scheme.
Ngozi Okonjo-Iweala, co-ordinating minister of the economy and minister of finance, had in a chat with the Manufacturers Association of Nigeria (MAN) last month in Lagos said government was reviewing the EEG scheme with a view to making it sustainable.
But a key official in the manufacturing sector advised the government to involve available business professionals in the process, contending that the scheme had failed because key and knowledgeable officers were not involved. The official stated that while EEG was being discussed, other schemes for the ports, trade fairs, among others, should be introduced.
Source: businessdayonline.com/2014/03/manufacturing-exporters-count-losses-as-ndcc-suspension-persists/#.UzBC-M6mqjs
