Exports promotion faces challenge over expanded grant

By ADEBAYO OBAJEMU

The Nigerian Export Promotion Council is one of the lesser known federal government parastatals, but as important to the economy as this agency is, its relevance to the import and export business is not well known among the population.

The recent report b the NBS on Nigeria’s export and trade imbalance has again raised questions about the effectiveness of the council. Nigeria recorded a N3.7 trillion trade deficit in the Q3. The agency has a lot of responsibility with regards to regulation of the export promotion.

To do this with enough benefits for the national economy, the government came up with the Export Expansion Grant (EEG), which is aimed at supporting active exporters; expanding their international businesses.

The policy is seen mainly as a post-shipment incentive designed to encourage Nigerian exporters to expand export volume, value and improve global competitiveness of Nigerian products. In order to benefit from EEG Scheme the following guidelines must be met:

The company in question must be registered with CAC & NEPC; must have carried out formal exports, with repatriation of proceeds into Nigerian bank account (CBN confirmation needed); have a minimum annual export turnover of N5 million; be a manufacturer/producer or merchant of products of Nigerian origin; show evidence of confirmed repatriation of export proceeds into a Domiciliary Account in Nigeria and, submit baseline data which should include Audited Financial Statements.

According to Dr. Olufemi Omoyele director of Entrepreneurship at Redeemers University, “most Nigerian entrepreneurs prefer to keep their profits abroad because of the fluidity and fluctuations in the value of our currency, and this has flouted the Export Promotion Council’s guidelines.
He told this newspaper that this attitude on the part of some business men and women involved in exporting their products abroad has made it difficult for the government to realize much needed revenues to reinforce the local currency.

To do this with enough benefits for the national economy, the government came up with the Export Expansion Grant (EEG), which is aimed at supporting active exporters; expanding their international businesses.

According to Professor Adesanya Oluwole of the department of Business Administration, Nasarawa State University, “It is a matter of patriotism to repatriate the profits back home, doing that will create a balance between the Dollars and Naira, and that way both the exporters and the national economy and the Naira will benefit.”

Omoyele said “exportation plays a vital role in boosting a nation’s economy, and to a large extent, economic development and exportation work in parallel, such that, one cannot do without the other; in other words, where there is exportation business in operation, the likelihood is that the economy is bound to explode thus, creating jobs and wealth. By so doing people’s standard of living will rise.
He bemoaned a situation whereby the country has largely remained a mono-product economy, exporting only oil, whereas, Nigeria is blessed with agriculture produce, and minerals, etc, which could have been used to diversify the economy by exporting these products other than oil, whichever way you look at it, exportation business is an economic booster.

He said that one of the fundamental reasons for the Council ” is making funds available for indigenous businesses that manufactured local products for exportation with a view to helping them secure an export market.
Oluwole blamed the government for the challenge being faced by exporters, which has created difficulties for the Export Promotion Council.
He traced the genesis of the policy to the realization of the challenges of exporting local products on the heels of complaints from exporters that the Federal Government has not made good its promise to disburse grants to back their commercial activities.

“The initiative is meant to encourage the Nigerian entrepreneur who wants to sell Nigerian goods, especially in the agricultural sector, to other countries. This will boost foreign exchange, but more importantly, it will tilt our reliance from oil as our principal source of foreign exchange revenue.”

He said that before 2007, federal government was giving grants to the exporters, but according to him, this was later affected by corruption and mismanagement of the process.

The current administration has made efforts to make the policy work as the Federal Executive Council was said to have approved promissory notes up to N195 billion to 270 firms.