NACCIMA, Employers Slam Suspension of Export Expansion Grant
Economy
By Patrick Ugeh and Chris Nwachuku
Concerned about the eff-ect the decision to suspend further payment of Export Expansion Grant would have on genuine industrialists and exporters that have made prior export commitments and obtained loans to do business, the National Association of Chambers of Commerce, Industry, Mines and Agricu-lture (NACCIMA) says it is not in the interest of the economy.
Similarly, textile and garment manufacturers have said it had hindered the growth of their industries while the ban on the importation of textile materials has failed, months after it was billed to take off.
"We have reviewed the matter, and therefore, wish to categorically state here that such a blanket, abrupt suspension or ban, for whatsoever reason, is not in the interest of the economy and the citizenry, given the present administration's drive at diversifying our economic base from oil, through promoting non-oil export," NACCIMA said in a statement made available to THISDAY at the weekend. "This is because such policy would not only discourage existing genuine exporters, but also prospecting ones, thereby, frustrating the already significant inroads being achieved on the international export market through the 40% EEG received from Government to encourage export and Nigerian export-ers."
The body argued that if government felt that some unscru-pulous Nigerians or companies were claiming to be exporters and not repatriating their proceeds, thereby frustrating the EEG scheme, then it should put in place an appropriate mechanism to effectively checkmate them.
It argued that getting those agencies saddled with such responsibility to mete out severe punishment to culprits to serve as a deterrent to others engaged in such illicit trade malpractices was better than placing a blanket suspension, which affects genuine export-ers and industrialists.
"We, therefore, strongly appeal to government to handle the matter with utmost care and reverse its decision on the issue in the interest of genuine Nigerian exporters and in consistency with the bold economic blueprint of government towards promoting non-oil export," the industrialists said.
If this was not done, they added, many of those in the export business would fold up, thereby leading to loss of jobs that would further exacerbate poverty in the land.
NACCIMA pledged to work with government to forge a stronger partnership in fighting such business/trade malpractices in both the private and public sectors of the economy.
The Executive Director, Nigeria Textile, Garment and Tailoring Employers Associa-tion, E.O. Olarewaju, said the grant, which was increased from 20 per cent to 40 per cent for intermediate and finished goods in 2003, had the potential of slightly expanding the operations, but had to be halted due to abuses.
Olarewaju noted that the suspension of the grant had demonstrated that nothing positive survives in the country.
"If the government will keep to its commitment to maintain the grant up to 2007 at least," he suggested, "some expansion would take place in the industry."
The employers' association stated that the ban on importation of textiles, which was reintroduced in January, 2004, had not yielded any result, noting that all the warehouses were still stockpiled with imported fabrics.
"Unless government makes special efforts to implement the ban, reviving the industry may be a mirage," Olarewaju said.
Revisiting the situation in the sector, he disclosed that between 1997 and 2003, about 42 factories had closed shop, with over 80,000 workers thrown into the labour market.
Also, capacity utilisation went down to about 28 per cent, as no new investors demonstrated interest in the industry. The association stated that because banks were not prepared to do business with the sector, some closed factories evacuated their machinery to other parts of the world.
"Warehouses are still filled with imported fabrics, while fabrics still come into the country unabated, especially through unapproved routes. The industry was of the opinion that the impact of the ban would be felt as from July but this has not been the case," Olarewaju noted.
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