Post by Trade Coach on Dec 8, 2013 9:21:53 GMT 1
The Export Expansion Grant (EEG) is a lofty economic policy with the potential to transform Nigeria’s economic fortunes, but Crusoe Osagie reports that the lack of will to implement it makes the nation’s Vision 202020 a lot more elusive
Nigeria has never been in short supply of initiatives and strategies that are capable of transforming the fortunes of its economy.
Painfully, the will to conscientiously implement these inherently laudable schemes has, ever so often, been the bane and has prevented the endowed African giant from achieving her development potential.
Non-oil Challenges
Analysts say this has been the scenario that many non-oil exporters have been challenged with, since government first started the major drive to diversify the nation’s economic base, by making non-oil export a priority.
As a part of the Structural Adjustment Programme, Government, in 1986, strengthened the Nigeria Export Promotion Council (NEPC) and introduced a basket of eighteen different incentives to promote the exportation of Nigeria’s myriad of God-given non-oil resources.
It is instructive to note that before oil, agricultural produce and mineral resources were the mainstay of the nation’s economy. For several years, attention was focused on oil to the detriment of other natural resources that God has endowed this nation with.
However, since 1986 till date, various governments have championed the need for Nigeria to go back to what used to hold Nigeria’s economy before oil was discovered in Oloibiri, in Bayelsa State in the late 50s. That has informed the introduction of various policies and incentives instruments to support the non-oil sector of the economy.
As against the belief in certain quarters, incentivising non-oil exports is not unusual. Governments all over the world are presently providing all manners of support and subsidy to ensure the competitiveness of the exports and exporters in the fiercely competitive international trade arena.
Policy Inconsistency
But the sad part of Nigeria’s economic history is that there had never been consistency in the nation’s policies. Rather than strategically and sustainably moving forward, we are notorious for taking one step forward and three or more steps backward.
It is one thing for Nigeria to aspire to be among the top 20 economies of the world by the year 2020 but it is an entirely different thing for her to be seen to work towards that goal and aspiration. From the unfolding drama in the last couple of weeks, there are clear indications that the vision 20:2020 aspiration might just be a pipe dream if not a mirage, especially in the non-oil export sector.
EEG Scenario
This makes Export Expansion Grant (EEG) the only functional incentive of all instruments introduced by government to encourage exporters of non-oil products immensely essential. This scheme was introduced as a form of buffer for those who export non-oil products from Nigeria so that they could be encouraged to expand their production base, add more value and foray into new markets. With the Grant, exporters are entitled to certain percentage of their turnover so that they could continue in business.
The incentive was also introduced bearing in mind that Nigeria’s infrastructure and business climate are not particularly healthy for business. Manufacturers in Nigeria are more of local governments in their own rights because they have to get their own water, their own light, construct their own road and then face numerous government agencies after they might have finished production.
Certificate Rejection
Unfortunately, just two weeks ago, the Nigeria Customs Service arbitrarily and unilaterally began to outrightly reject the Negotiable Duty Credit Certificate (NDCC), the instrument with which the EEG is paid to beneficiary-exporters. When some of the affected exporters raised concerns about this, they were told the order to reject the certificates came from above. Until today, no written instruction has been issued to effect the rejection.
The question that should agitate the mind of right thinking Nigerians are: why should an economy that is striving to be among the top 20 economies of the world by year 2020 be run on “orders from above”? What is the interest at play with the EEG? Is the government of President Goodluck Jonathan aware of this withdrawal? Are some people trying to play games with people’s destinies by truncating their businesses?
These are the questions that need to be answered if truly we are sincere as a country and we really want to move this nation forward. What government should realise is that the global economy is a battlefield. And every country is arming its economic foot-soldiers (exporters) with the most potent weaponry (incentives) to ensure that they match up to their competitors in the global market place.
It will not augur well if we continue to expose our economic armies to harsh conditions thereby making them vulnerable. We cannot continue to run our economy on chance and make major players look stupid and directionless. The sad part of the EEG saga is that this is about the 14th time that it will be suspended, directly and indirectly. If government keeps suspending and bringing it back, it then means there is a need to take a second look at its implementation.
There is no doubt that the policy is a good one. But there is also a dire need to look at the modalities of implementation. Are there people who are benefiting unjustly from the scheme? If there are such instances, then the solution is not to suspend or withdraw the scheme but to look at ways through which the loopholes can be blocked so that genuine and sincere exporters will not be affected.
It will be very wrong to continue to throw away the baby with the bath water. Soon that baby will develop fractures and might not be able to walk again. If, at every single opportunity, instruments that seem to be encouraging Nigerians to remain in business are being tampered with without any cogent reason, we may wake up one day to witness a comatose economy.
Impact of Suspension
Already, many exporters are feeling the pain of the suspension. Some have literally packed up business in the past when the scheme was suspended. The truth is that every time a spanner is thrown into the wheel of the nation’s economic progress, there are casualties. If truly we desire a nation that is economically strong, efforts should be made to ensure consistency in our policies and be seen to be doing the right thing always.
In the meantime, it will be in the interest of the economy if government heeds the voice of reason and without further delay calls the Nigeria Customs Service to order and give directive for the immediate restoration of the smooth operation of the EEG and the instruments with which it operates. This will go a long way in assuring non-oil exporters that government is not gambling with the nation’s economy.
Source: THISDAYSLIVE
Nigeria has never been in short supply of initiatives and strategies that are capable of transforming the fortunes of its economy.
Painfully, the will to conscientiously implement these inherently laudable schemes has, ever so often, been the bane and has prevented the endowed African giant from achieving her development potential.
Non-oil Challenges
Analysts say this has been the scenario that many non-oil exporters have been challenged with, since government first started the major drive to diversify the nation’s economic base, by making non-oil export a priority.
As a part of the Structural Adjustment Programme, Government, in 1986, strengthened the Nigeria Export Promotion Council (NEPC) and introduced a basket of eighteen different incentives to promote the exportation of Nigeria’s myriad of God-given non-oil resources.
It is instructive to note that before oil, agricultural produce and mineral resources were the mainstay of the nation’s economy. For several years, attention was focused on oil to the detriment of other natural resources that God has endowed this nation with.
However, since 1986 till date, various governments have championed the need for Nigeria to go back to what used to hold Nigeria’s economy before oil was discovered in Oloibiri, in Bayelsa State in the late 50s. That has informed the introduction of various policies and incentives instruments to support the non-oil sector of the economy.
As against the belief in certain quarters, incentivising non-oil exports is not unusual. Governments all over the world are presently providing all manners of support and subsidy to ensure the competitiveness of the exports and exporters in the fiercely competitive international trade arena.
Policy Inconsistency
But the sad part of Nigeria’s economic history is that there had never been consistency in the nation’s policies. Rather than strategically and sustainably moving forward, we are notorious for taking one step forward and three or more steps backward.
It is one thing for Nigeria to aspire to be among the top 20 economies of the world by the year 2020 but it is an entirely different thing for her to be seen to work towards that goal and aspiration. From the unfolding drama in the last couple of weeks, there are clear indications that the vision 20:2020 aspiration might just be a pipe dream if not a mirage, especially in the non-oil export sector.
EEG Scenario
This makes Export Expansion Grant (EEG) the only functional incentive of all instruments introduced by government to encourage exporters of non-oil products immensely essential. This scheme was introduced as a form of buffer for those who export non-oil products from Nigeria so that they could be encouraged to expand their production base, add more value and foray into new markets. With the Grant, exporters are entitled to certain percentage of their turnover so that they could continue in business.
The incentive was also introduced bearing in mind that Nigeria’s infrastructure and business climate are not particularly healthy for business. Manufacturers in Nigeria are more of local governments in their own rights because they have to get their own water, their own light, construct their own road and then face numerous government agencies after they might have finished production.
Certificate Rejection
Unfortunately, just two weeks ago, the Nigeria Customs Service arbitrarily and unilaterally began to outrightly reject the Negotiable Duty Credit Certificate (NDCC), the instrument with which the EEG is paid to beneficiary-exporters. When some of the affected exporters raised concerns about this, they were told the order to reject the certificates came from above. Until today, no written instruction has been issued to effect the rejection.
The question that should agitate the mind of right thinking Nigerians are: why should an economy that is striving to be among the top 20 economies of the world by year 2020 be run on “orders from above”? What is the interest at play with the EEG? Is the government of President Goodluck Jonathan aware of this withdrawal? Are some people trying to play games with people’s destinies by truncating their businesses?
These are the questions that need to be answered if truly we are sincere as a country and we really want to move this nation forward. What government should realise is that the global economy is a battlefield. And every country is arming its economic foot-soldiers (exporters) with the most potent weaponry (incentives) to ensure that they match up to their competitors in the global market place.
It will not augur well if we continue to expose our economic armies to harsh conditions thereby making them vulnerable. We cannot continue to run our economy on chance and make major players look stupid and directionless. The sad part of the EEG saga is that this is about the 14th time that it will be suspended, directly and indirectly. If government keeps suspending and bringing it back, it then means there is a need to take a second look at its implementation.
There is no doubt that the policy is a good one. But there is also a dire need to look at the modalities of implementation. Are there people who are benefiting unjustly from the scheme? If there are such instances, then the solution is not to suspend or withdraw the scheme but to look at ways through which the loopholes can be blocked so that genuine and sincere exporters will not be affected.
It will be very wrong to continue to throw away the baby with the bath water. Soon that baby will develop fractures and might not be able to walk again. If, at every single opportunity, instruments that seem to be encouraging Nigerians to remain in business are being tampered with without any cogent reason, we may wake up one day to witness a comatose economy.
Impact of Suspension
Already, many exporters are feeling the pain of the suspension. Some have literally packed up business in the past when the scheme was suspended. The truth is that every time a spanner is thrown into the wheel of the nation’s economic progress, there are casualties. If truly we desire a nation that is economically strong, efforts should be made to ensure consistency in our policies and be seen to be doing the right thing always.
In the meantime, it will be in the interest of the economy if government heeds the voice of reason and without further delay calls the Nigeria Customs Service to order and give directive for the immediate restoration of the smooth operation of the EEG and the instruments with which it operates. This will go a long way in assuring non-oil exporters that government is not gambling with the nation’s economy.
Source: THISDAYSLIVE
