The Federal Government was to issue Promissory Notes worth N195.08bn to 270 companies to settle part of the Export Expansion Grant liabilities to exporters.
The amount is expected to bring succour to the export sector in particular and the economy in general following a series of delays that have plagued the release of the EGG.
The EEG is an initiative of the Federal Government that was meant to encourage exporters of non-oil products, including agro-commodities, in order to cushion the effects of infrastructural deficiencies and reduce the overall unit cost of production.
It was introduced through the Export Incentives and Miscellaneous Provisions Act, Cap 118 of 1986, to enhance the contributions of non-oil export to the national economy.
The mechanism is such that a financial credit applied to the value of exports of products from Nigeria ranging from five per cent to 30 per cent.
The financial credit is not cash funded but provided as Negotiable Duty Credit Certificate, which can be applied against import duties on other items.
It was suspended by the Federal Government following allegations of abuse of the scheme by exporters.
Speaking during a stakeholders’ forum on the framework for the issuance of the promissory notes for the settlement of the outstanding EEG, the Chief Executive Officer, Nigerian Export Promotion Council, Mr. Olusegun Awolowo, stated that the government was now set to clear the EEG arrears to exporters from 2007 to 2016.
He said 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.
He said, “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.
“It is our fervent belief that the settlement of this inherited debt by the Federal Government will pave the way for the revival of the non-oil export sector of the economy.
“It will in no small measure enable the affected companies to settle their debts with banks and other financial institutions, inject funds for further export activities, generate more foreign exchange as well as employment for the teeming youth of our country.”
On export earnings of Nigeria, Awolowo said that the country’s export earnings for 2017 and 2018 experienced an upward trend.
For instance, he said there was a growth of 48.43 per cent from $1.2bn in 2016 to $1.78bn before hitting $2.27bn in 2018.
He expressed optimism that exports earnings for the 2019 fiscal period would grow by about 40 per cent in view of the settlement of the exporters’ debt through Promissory Note programme.
He said in line with the government’s policy on ease of doing business, the council had developed an online platform for the processing and management of the EEG claims.
The online platform, according to him, would provide the opportunity for all stakeholders to submit, review and access information regarding the processing of claims.
He said the platform which was developed by PriceWaterHouse Coopers would be fully deployed before the middle of May this year