Nigeria’s quest to diversify its revenue sources and bolster non-oil export earnings is being hampered by the federal government’s inability to address the backlog of Export Expansion Grant (EEG) claims and streamline the bureaucratic process associated with accessing the grant. The EEG, which serves as Nigeria’s primary incentive scheme for exporters, has been marred by allegations of corruption involving some government officials and a lack of due diligence by the Nigerian Export Promotion Council (NEPC) in the approval process.
These challenges have eroded trust in the scheme among exporters, who question whether they will receive the grant when needed. To revive the export industry and enhance Nigeria’s economic stability, experts are calling for a comprehensive overhaul of the EEG.
The EEG plays a pivotal role in assisting exporters in managing the challenges associated with the cost of doing business, breaking even, and competing in the global market. According to Odiri Erewa-Meggison, the chairman of the Manufacturers Association of Nigeria Export Promotion Group (MANEG), “Without the export grant, it is difficult for Nigerian manufacturers to be competitive in the export market amid a challenging business environment.”
Meggison emphasizes the need for unity in supporting exporters to bring in foreign exchange that the country desperately needs, while eliminating bureaucratic bottlenecks in the process.
Over the years, a significant number of companies that exported various products or commodities dating as far back as 2009 are owed substantial sums in claims. The federal government has failed to meet its obligation of settling these claims, despite NEPC’s prior approval.
The EEG was established in 1986 with the primary objective of enhancing the competitiveness of Nigerian exporters in the global market. It also serves as a mechanism to boost the volume of non-oil exports in the country and encourage the export of value-added products over raw agricultural commodities.
Similar incentive schemes are implemented in various developing and developed countries, including China, India, and Australia, to provide concessions or grants to companies looking to penetrate new markets or solidify their positions in existing ones.
The EEG, however, faces a multitude of challenges, as pointed out by Madu Obiora, Chairman and CEO of Multimix Group, who highlighted that the scheme currently favors larger corporations at the expense of smaller businesses.
In light of these pressing issues and the necessity for revitalizing Nigeria’s non-oil export sector, it is imperative for the government to address the existing bottlenecks and expedite the settlement of outstanding claims to ensure that the EEG serves as an effective tool in advancing the country’s revenue diversification agenda.
