Boost for non-oil exporters as FG settles N5bn unutilised NDCC
Despite falling government revenue resulting from dwindling oil prices, the Federal Government has raised the morale of non-oil exporters by settling N5 billion worth of unutilised Negotiable Duty Credit Certificates (NDCC). This figure, however, represents 4.8 percent of all the outstanding NDCCs owed non-oil exporters, Real Sector Watch has reliably gathered.
Of the N5 billion, N450.72 million is meant for all non-oil exporters who were originally owed sums less than N30 million, while N4.55 billion is for those previously owed amounts above N30 million.
Non-oil exporters have been owed much more than N100 billion since August 22, 2013, when the Federal Government directed the Nigeria Customs Service (NCS) to stop honouring NDCCs, which are instruments used in claiming an incentive called the Export Expansion Grant (EEG), a scheme introduced by the government in 2005 to drive non-oil exports.
The sums owed non-oil exporters resulted from government’s promise, in the form of EEG, to provide assistance, ranging from 5 to 30 percent of export value, to real sector players who were actually exporting to various markets in Africa, Europe and the Americas.
But since the suspension of the scheme in August 2013, non-oil exporters’ NDCCs have remained un-honoured by the Customs, meaning that these credit certificates are unutilised.
Ngozi Okonjo-Iweala, coordinating minister of the economy and minister of finance, had explained, during her visit to manufacturers early in 2014, that EEG was suspended because it was no longer sustainable and would require some review.
In a publication by the NCS in December, names of beneficiaries that were owed below and above N30 million were shown. Some of the companies owed below N30 million included AA-KKAYZ Resources Limited, Kolorkote Nigeria Limited, GB Tannery Limited, Seven-Up Bottling Company plc, Bel Papyrus Limited and Vita Foam. Others are Aarti Steel Nigeria Limited, Kwale Rubber Company Limited and Western Metals Products Company Limited, among others.
On the other hand, firms owed above N30 million were Araromi Rubber Estates Limited, Cement Company of Northern Nigeria, Everest Metal Nigeria Limited, Sapele Integrated Industries Limited, African Textiles Manufacturing Limited and African Foundries Limited. Others are Friesland Campina Wamco Nigeria plc, New Star Metal, Armada International Limited, among others.
Stakeholders hail response
Stakeholders have hailed the Federal Government’s response, describing it as timely.
Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group (MANEG), has commended the government, especially the coordinating minister of the economy, for responding to the plea made by non-oil exporters regarding the settlement of outstanding NDCCs, stating that it is an indication that the quest to diversify the economy and create jobs is being taken seriously. He said the federal government has demonstrated that non-oil exports drive has become part of its project, adding that no economy can ever become competitive without a strong non-oil export sector.
However, Oyelola stressed that it is important that government clearly explains when next it will settle the rest so that exporters can plan.
“One key tenet of export is planning,” he said.
“But planning requires certainty. Exporters cannot afford to play guess games. The nature of the business requires that you know what to expect,” he stressed.
“We need to know when we can utilise the rest of the NDCCs. We plead with the government to intimate us with their plans,” he said.
“Oil is failing us and all eyes are on non-oil sector. We are the people who are developing the real sector, diversifying the economy and creating jobs. So we are saying that we need to be encouraged. Many non-oil exporters borrowed from banks to export before NDCC was suspended. So they also need to know when the rest will be settled,” he added.
Dissenting Voices
Some non-oil exporters have stated in clear terms that 4.8 percent of the total owed them is infinitesimal. Some of them lament that amounts of money identified by the Customs (in the said mentioned publication) does not represent exactly what was owed them.
“I have a case where the Customs said I am owed a little above N100 million, but my documents show that I am actually owed over N300 million,” said a non-oil exporter, who spoke on the condition of anonymity.
“However, what they gave me recently was below N7 million. This is too small. How do you now expect me to travel to Abuja for just less than N7 million, especially when you have Customs that will be making demands for ‘something,” the exporter said.
Another non-oil exporter said, “This is not free money. So we should be glad if we could have a discussion with the government. I know attention has been shifted to elections, but I have always advocated that no economy can afford to ignore its non-oil export base,” he said.
“With devaluation, it is expected that a strong non-oil export economy will gain, but this is not the case here owing to so many issues. We are still import-dependent and that should change,” he added.
ODINAKA ANUDU