There is brewing controversy over the relevance of the Export Expansion Grant Scheme (EEG)
introduced in 2006 by the Federal Government to boost non-oil receipts in the economy.
The controversy stems from the fact that the Nigerian Customs which is a key agency in the implementation of the federal government's policy as it concerns import and export trade has been rejecting the Negotiable Duty Credit Certificate (NDCC) which is statutorily document issued by the Federal Ministry of Finance to exporters.
The EEG since inception in 2006 has always employed the policy of using NDCC certificate to offset the cost of imports and excise duty and other port related charges.
But this policy suffered a setback recently following the circulation of a document purportedly from the NSC but without authentication, saying that the instrument can only be used to settle industrial machines and raw materials.
The matter has left key stakeholders in the country's agriculture and real sectors in quandary.
Reliable sources say Customs took its position because the federal government fails to recognize the NDCC certificate as part of the revenue generated by the customs.
Customs recent released a statement to journalists stated that NDCC revenue and other charges totaling N27, 841, 830. 732 have been lost to the implementation of the Export
But the Manufacturers Association of Nigeria (MAN) however said the Customs insinuation that the EEG is a worthless policy and the lossess of N27.8 billion is not correct.
MAN said in its reaction that the issue of recognition of revenue from duties collected through payment by NDCC is an internal matter between the customs and the supervisory ministry, which the Ministry of Finance which are agencies of the Federal Governments.
Mr. Romoe Baberpolopous, chairman MAN Export Group said it is contrary to fact and logic to suggest that customs have lost duties and excise of N27, 841,830,732 when in actual fact the importers have to buy the NDCC by paying cash at agreed discount to face value.
"It is contrary to fact and logic to suggest that customs have lost duties and excise of N27, 841,830,732. This assertion suggests that NDCCs are worthless piece of paper when in actual fact the importers have to buy the NDCC by paying cash at agreed discount to face value.
MAN, however described the NCS rejection NDCC and questioning the impact of the EEG on the economy as unjustified, frivolous patently wrong and malicious.
" For NCS to make vague references to FGN objectives in seeking to explain and justify their action on NDCC which have been in use for past several years and accepted as legal tender by NCS all along and a sudden twist is an economic sabotage,'' MAN said.
In addition, MAN noted that NCS view of a direct correlation between the export revenue and importation of raw materials and machinery was unfounded and perhaps even misleading.
He explained that much of non-oil exports is derived from agricultural , livestock and fishery sector adding that most of the raw material for these non-oil exports is sourced locally leading to high level of local content and value addition to products. "Machinery importation can be a done only when a business can not find the machinery and technology locally and also only at those times when capacities are added. Therefore machinery imports cannot be done on an ongoing basis in line with export revenue MAN emphasised
Baberpolopous noted that the increased availability and usage of NDCC is actually the backbone and reflection of success the policy have recorded so far.
MAN, however supports 100 per cent revenue recognition for NCS for all duty collection, irrespective of the medium of payment whether cash or NDCC.
"For the record MAN Export Group supports the case of 100% revenue recognition for NCS for all duty collection, irrespective of the medium of payment whether cash or NDCC".
He said that Customs should press for recognition of NDCC as part of its generated revenue to the federal government rather than disorganize the EEG programme.
"The issue of NDCC not been counted as part of revenue generated by customs is a long standing practice/procedure followed between the NCS and Federal Ministry of Finance.
"It should be sorted out by the ministry of finance as the supervisory body without allowing the economy to suffer," MAN noted.
The export group chief reiterated that the objective of the EEG policy is to increase foreign exchange earnings of the country through non-oil exports adding that its has been one of the most effective fiscal policy intervention of the Federal Government and has served as a catalyst in increasing the non-oil export earnings from about $600mil to over $2billion in 2009.
