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 Daily Independent Online.
* Friday, August 13, 2004.
Export grant:
‘Blanket suspension will erase gains’
By Ntai Bagshaw
Development
Reporter, Lagos
The blanket
suspension of the Export Expansion Grant (EEG) scheme by the Federal
Government will erase the significant gains recorded in the export sector
in recent times, thereby plunging the economy into recession, Mr. Olufemi
Boyede, an export expert, has said.
“On account of the obvious
positive impacts that the Export Expansion Grant scheme has exerted on
Nigeria’s export industry, it is my considered opinion that the blanket
suspension is not the best solution under the circumstance,” he added.
The EEG scheme - lauded as
Nigeria’s premier export promotion strategy - was established in 1986 to
assist exporters increase the volume of their exports. But, the Federal
Government, last month, announced the suspension of the scheme, saying
that the $30 billion (about N4 trillion) so far spent on it had made no
impact on the promotion of the export sector.
Affirming that the scheme was
fraught with malpractices, Boyede, chief executive of Koinonia Ventures
Limited, said despite these anomalies, whatever remains of the export
portfolio of non-traditional products in the country currently are a
direct result of the availability of the EEG to Nigerian exporters. “I
think that rather than throw away the baby with the bath water, the
problems should be frontally addressed to ensure that the scheme
functions more effectively as any attempt to either cancel or reduce the
rate of the incentive would render the few companies that are still
exporting in the country very uncompetitive and unprofitable in the
international markets.
“What the government needs to
do, and the government does have the muscle and resources to do this, is
to deplore all anti-crime machinery of state to fish out the perpetrators
of the observed malpractices and speedily prosecute and punish them,” he
added.
Boyede
highlighted the gains recorded in the export sector, as a result of the
implementation of the EEG scheme. “According to him, the increase in the
repatriation sum of the scheme from two per cent at its inception in 1986
to 40 per cent presently led to the significant rise in the level of
domestic production activity in the economy. Companies, even with
manufacturing operations in other parts f the continent, relocated their
operations to Nigeria, due to running of the scheme, Boyede said. “Export
performance rose significantly from by about 800 per cent from a dismal
0.52 per cent in 2000 to above four per cent between 2003 and this year,
but for the suspension of this scheme, which has resulted in immediate
crippling of the activities of most manufacturers’ exports, the figure
was poised to hit two-digit levels within the shortest time,” he added.
Announcing the scheme’s
suspension, Secretary to the Federal Government, Chief Ufot Ekaette, said all current claims would be
vetted through a special validation exercise within three months. The
scheme, he added, is also to be streamlined to reduce or eliminate abuses
and other malpractices that characterised it in the past.
Meanwhile, companies
implicated in the fraud, according to the Minister of State for Finance,
Mrs Nenadi Usman, are to be handed over to the Economic and Financial
Crimes Commission (EFCC) for the recovery of funds in their possession
and prosecution.
Speaking earlier with Daily
Independent on the matter, President of the Manufacturers Association
of Nigeria (MAN), Mr. Charles Ugwuh, was, however, optimistic that the suspension will be
lifted soon. “We would talk to the minister about the need to get the
scheme back on track.” he said.
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