Business

Non-Oil Exporters Decry Poor Implementation of EEG

Published

7 years ago

August 7, 2016

The continued decline in the non-oil export is due to the poor implementation of the Export Expansion Grant scheme by the Federal Government, non-oil sector exporters have said.

According to them, Nigeria’s non-oil exports decreased from $3bn in 2013 to $1.6bn in 2015 as a result of the poor implementation of the EEG since 2010.

The Executive Secretary, Organised Private Sector Exporters Association, Mr. Jaiyeola Olarewaju, stated that the decreasing trend in non-oil export would persist in 2016, judging by the available information.

Olarewaju, who spoke to journalists in Abuja on Friday, said, “According to a comprehensive Impact Assessment Report prepared by the Nigerian Export Promotion Council and released in May 2016, the decline in non-oil export is chiefly attributed to the disruption in the implementation of the EEG scheme since 2010.

“Due to the non-acceptance of the Negotiable Duty Credit Certificate, an instrument through which the grant is disbursed, a backlog of N123bn of unutilised NDCC’s has piled up. The exporters were paralysed by the backlog and had no option but to scale down exports which bore a stark reflection on the country’s non-oil export performance since 2014.”

He stated that Nigeria’s non-oil export sector was still in its infancy and came into mainstream in the last 10 years due to the policies that were put in place that encouraged the sector to invest in agricultural supply chains, export processing factories and overseas marketing.

Nigeria’s export basket comprises agro-allied commodities such as cocoa, cashew, cotton, sesame seeds, rubber, finished leather, tobacco, textiles, processed marine products, footwear and plastics.

The EU is Nigeria’s largest trading partner, accounting for about 40 per cent of the market share, followed by Asia and ECOWAS, accounting for 25 per cent and 18 per cent, respectively.

Olarewaju stated that for the past two years, exporters in Nigeria had been sitting on a backlog of over N100bn worth of unutilised export certificates issued under the seal of the Federal Ministry of Finance.

He said, “These are sovereign instruments and the government should honour its financial commitments as per extant law. It is unfair that some exporters were issued the certificates for exports made till 2013 whereas many others who had submitted their applications remain outstanding for no fault of theirs.

“This is part of the backlog lying with NEPC. After all, government policy is not based on first come first served. By any principle of fairness and justice, all pending applications for the EEG on account of exports made till 2013 should be treated by the Federal Ministry of Finance.”

According to the executive secretary, most developing countries give incentives to boost their exports.

Olarewaju said, “China, the world’s largest exporter, increased the export tax rebates in 2015 to check decline in exports. India provides a package of incentives to its exporters through its five-year foreign trade policy. Nigerian manufacturers need the EEG to mitigate the negative impact of infrastructural and other cost disadvantages.”

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Company News

Unilever Nigeria to Focus on Higher Growth Opportunities by Exiting Home Care and Skin Cleansing Markets

Published

3 days ago

March 27, 2023

Samed Olukoya

Unilever Nigeria Plc, one of the leading Fast-Moving Consumer Goods (FMCG) companies, has announced its decision to exit the home care and skin cleansing markets.

The company disclosed that the decision would only affect three of its brands – OMO, Sunlight, and Lux. According to Unilever Nigeria, the move is aimed at accelerating the growth of the organisation and sustaining profitability.

The restructuring of Unilever Nigeria’s business model is in response to the tough business environment in Nigeria, where many organisations and individuals have found it difficult to access cash due to the Naira redesign policy of the Central Bank of Nigeria (CBN).

Unilever Nigeria’s Managing Director, Mr Carl Cruz, noted that the offloading of the home care and skin cleansing portfolios would enable the company to “concentrate on higher growth opportunities.”

Unilever Nigeria has a strong competition in the business categories it is exiting. However, the company’s products are also market leaders in the sector. Mr Cruz added that the company was repurposing its portfolio by gradually exiting two categories, home care and skin cleansing, affecting only three brands (OMO, Sunlight, and Lux).

This would allow Unilever Nigeria to drive the rest of its brand portfolio for growth into the future and strengthen business operations with measures to digitize and simplify processes.

Unilever Nigeria is a truly Nigerian business and the oldest serving manufacturer in the country. The company’s decision to exit the home care and skin cleansing markets is in line with its commitment to adapt to changing market circumstances and reposition itself to better meet the needs of its consumers, shareholders, and employees.

Mr Cruz said, “By making these changes, we will unleash the sustained and profitable growth we need to be here for the next 100 years as well.”

Merger and Acquisition

Access Bank Zambia Granted Approval for Atlas Mara Zambia Merger

Published

3 days ago

March 27, 2023

Samed Olukoya

Access Holdings Plc has announced that its subsidiary, Access Bank Zambia Limited, has received final regulatory approval from the Central Bank of Zambia for the acquisition and merger of African Banking Corporation Zambia Limited (Atlas Mara Zambia).

The move is a significant step towards the creation of one of the top five banks in Zambia.

Sunday Ekwochi, Company Secretary of Access Holdings, stated that the latest development is a big step towards the earlier announcement made on October 25, 2021.

This approval comes after the Central Bank of Nigeria (CBN) and Common Market for Eastern and Southern Africa Competition Commission granted their “no objection” to the transaction in 2022.

Access Zambia will now begin the process of integrating and merging Atlas Mara Zambia into its existing operations. The merger is expected to boost Access Bank Zambia’s position in the Zambian banking sector and create more opportunities for its customers.

Access Holdings Plc is committed to expanding its operations and presence in Africa, and this acquisition and merger is a testament to its efforts in achieving that goal. The company believes that this move will strengthen its position as a leading financial services provider in the region.

Dr. Herbert Wigwe, Group Chief Executive Access Holdings, while commenting on the transaction, said: “The transaction builds on our earlier acquisition and merger of Cavmont Bank Plc into Access Bank Zambia and underscores our resolve to strengthen our presence in Zambia, a key African market that fits into our strategic focus on geographic earnings growth and diversification”.

Merger and Acquisition

First Citizens BancShares Acquires Silicon Valley Bank’s Deposits and Loans in FDIC-Assisted Deal

Published

4 days ago

March 27, 2023

Samed Olukoya

On Monday, First Citizens BancShares Inc announced that it had acquired the deposits and loans of Silicon Valley Bank (SVB) following its failure earlier this month.

This acquisition marks a significant step forward in addressing the global financial markets’ ongoing crisis of confidence.

As part of the deal, First Citizens BancShares will assume SVB’s assets including $110 billion in assets, $56 billion in deposits, and $72 billion in loans. The Federal Deposit Insurance Corporation (FDIC), which took control of SVB, will receive equity appreciation rights in First Citizens BancShares stock with a potential value of up to $500 million.

First Citizens BancShares described itself as having completed more FDIC-assisted transactions since 2009 than any other bank. It believes that the combined company will be resilient with a diverse loan portfolio and deposit base.

The bank’s statement also noted that its prudent risk management approach would continue to protect customers and stockholders through all economic cycles and market conditions.

In addition to the acquisition, First Citizens BancShares will receive a line of credit from the FDIC for contingent liquidity purposes. Again, the bank will have an agreement with the regulator to share some losses on commercial loans to provide further downside protection against potential credit losses.

While analysts said the move was positive for financial stability and the venture capital industry, they noted that it only addressed the issue of deposits leaving smaller banks for larger banks or money market funds up to a point.

Redmond Wong, Greater China market strategist at Saxo Markets, said that “First Citizens Bank’s acquisition of the SVB loan book and deposits does not add much to solve the number one issue that the U.S. banking system is now facing.”

SVB’s failure was the largest bank to fail since the 2008 financial crisis. Its closure on March 10th caused massive market disruption and heightened stresses across the banking sector globally. The acquisition of its deposits and loans by First Citizens BancShares is a step towards stabilizing the sector and restoring confidence in the global financial markets.