Connect with us

Economy

FG Sets Aside N20bn for Export Grant Arrears

Published

on

Dr. Okechukwu Enelamah
  • FG Sets Aside N20bn for Export Grant Arrears

The Federal Government has set aside N20bn as tax credit to settle part of the N300bn outstanding claims of the Export Expansion Grant.

The move is part of measures aimed at discouraging imports and encouraging the development of the local economy through the provision of incentives to manufacturers.

The proposed spending is contained in the 2017 budget, which was submitted to a joint session of the National Assembly by President Muhammadu Buhari on December 14.

The N7.3tn budget has a total capital vote of N2.24tn, representing 30.7 per cent while the recurrent component stands at N2.98tn with the rest allocated for debt servicing.

The Nigerian Export Promotion Council had put the outstanding claims of manufacturers and exporters for the Export Expansion Grant at over N300bn.

The EEG is an initiative of the Federal Government meant to encourage exporters of non-oil products, including agro-commodities, in order to cushion the effects of infrastructural deficiencies and reduce overall unit cost of production.

It was introduced through the Export Incentives and Miscellaneous Provisions Act, Cap 118 of 1986 to enhance the contributions of non-oil export to the national economy.

The mechanism is such that a financial credit is applied on the value of exports of products from Nigeria, ranging from five per cent to 30 per cent.

The financial credit is not cash-funded, but provided as Negotiable Duty Credit Certificate, which can be applied against import duties on other items, according to the system.

Some manufacturing companies operating in the country had raised the alarm over what they described as lopsidedness in the payment of the EEG.

The Federal Government had to suspend the scheme for review owing to the allegations of regularities in its implementation by manufacturers.

Just last month, the Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, said the government had held a meeting with exporters on the need to resume the scheme.

He explained that the scheme had been reviewed to prevent it from being abused by exporters.

The minister said under the new arrangement, the backlog of exporters’ claims would be settled with a tax credit rather than import credit.

An analysis of the 2017 budget of the ministry revealed that the sum of N20bn had been allocated for tax credit to exporters under the EEG scheme.

Apart from the N20bn EEG tax credit, the ministry proposes to spend N240m to develop clusters for priority products; N100.2m for implementation of Nigeria agro-industry development initiative; and N40m for implementation of trade facilitation agreements.

In the same vein, the sum of N500m was allocated for enabling environment for industry, trade and investment; N50m for implementation of multilateral agreements with Nigeria’s trading partners; N35m for promotion of made-in-Nigeria products; and N80m for international investment engagement initiatives.

Similarly, the sum of N35m was budgeted for domestic trade regulatory activities; N144m for development of policy framework for the industry; N25m for development of sector policy for iron and steel; and N20m for establishment of trade resource centres.

The Executive Director/Chief Executive, NEPC, Mr. Olusegun Awolowo, had said if the huge EEG claim of over N300bn was not addressed, it would affect the efforts of the government to diversify the economy owing to the near absence of incentives to encourage exports.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Continue Reading
Comments

Economy

IMF Queries FG Strategies On Fuel Subsidy, Unemployment, Inflation

Published

on

IMF - Investors King

The International Monetary Fund has raised the red flag over Nigeria’s resumption of petrol subsidy payments, describing it as injurious to the economy.

It also reiterated the importance of introducing a market-based fuel pricing mechanism and deployment of well-targeted social safety nets to cushion any adverse impact on the poor.

In a report produced after a virtual meeting with Nigerian authorities from June 1 to 8, the IMF also expressed concerns over the rising unemployment and inflation rates, even as it admitted that real Gross Domestic Product was recovering.

The IMF team, led by Jesmin Rahman, further hailed the Central Bank of Nigeria for its efforts at unifying the exchange rate by embracing needed reforms.

The Fund said: “Recent exchange rate measures are encouraging, and further reforms are needed to achieve a fully unified and market-clearing exchange rate.

“The resurfacing of fuel subsidies is concerning, particularly in the context of low revenue mobilisation.

“The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 global pandemic. Following sharp output contractions in the second and third quarters, GDP growth turned positive in Q4 2020 and growth reached 0.5 percent (y/y) in Q1 2021, supported by agriculture and services sectors.

“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 percent, owing to high food price inflation. With the recovery in oil prices and remittance flows, the strong pressures on the balance of payments have somewhat abated, although imports are rebounding faster than exports and foreign investor appetite remains subdued resulting in continued FX shortage.

“The incipient recovery in economic activity is projected to take root and broaden among sectors, with GDP growth expected to reach 2.5 percent in 2021. Inflation is expected to remain elevated in 2021, but likely to decelerate in the second half of the year to reach about 15.5 percent, following the removal of border controls and the elimination of base effects from elevated food price levels.”

The IMF also recognised that tax revenue collections were gradually recovering but noted that with fuel subsidies resurfacing, additional spending for COVID-19 vaccines and to address security challenges, the fiscal deficit of the Consolidated Government is expected to remain elevated at 5.5 percent of GDP.

Continue Reading

Economy

Nigeria-South Africa Trade Hits $2.9bn

Published

on

Shipowners

The volume of trade between Nigeria and South Africa hit $2.9 billion last year with expectation of it rising further with the African Continental Free Trade Area (AfCFTA) agreement.

Nigeria’s Consul General, Malik Abdul, in a statement noted that Nigeria accounts for 64 per cent of South Africa’s trade in West Africa and is one of his country’s top three sources of crude oil.

He further added that in 2020, South Africa imported R35 billion ($2.48 billion) worth of goods, predominantly crude oil from Nigeria and exported R6 billion ($425milion) to Nigeria.

He stated: “South Africa is currently among the top 10 per cent of investors in Nigeria, globally and Nigeria is South Africa’s 10th biggest export market in Africa and thirty-second globally. Nigeria accounts for 64 per cent of South Africa’s trade with West Africa and is one of South Africa’s top three sources of crude oil.

“Also, Nigeria in 2020 was South Africa’s top import market in Africa and sixth globally, after China, Germany, USA, India and Saudi Arabia. Over the past year, South Africa imported $2.48 billion worth of goods predominantly crude oil from Nigeria and exported $425 million worth to Nigeria.”

Also, the consulate said his embassy issued a total of 10,341 passports to Nigerian citizens in South Africa between March 2020 and May 2021.

The consul general further said the Mission had 404 unclaimed passports, and advised all those whose passports were processed and pending from August 2020 to come for collection.

Abdul added that the consulate was working to clear all COVID-19 lockdown backlog of applications, urging members of the public to exercise patience while the mission was resolving the backlogs.

On the re-introduction of administrative fees and charges for lost passports, Abdul said that the step was taken to harmonise and standardise consular services following approval from the Ministry of Foreign Affairs, Abuja.

The Mission had increased the fees for lost passports from R1,500 to R2,000, and admin charges of R120 for data capturing.

“On this issue, the Mission could not unilaterally impose any charges without headquarters’ approval or consent.

“The admin fees of R120 pertains to all services rendered by the two Missions,” he said.
According to the Nigerian envoy, the decision was taken to remove disparities in all consular services, noting that visa fees have also been harmonised.

On penalty for lost passports, Abdul disclosed that 484 Nigerian passports were reported missing at the mission between August 2020 and May 2021 with request for re-issue.

Abdul said it was discovered that there were criminal undertones and immigration rules infractions associated with the ‘so-called’ lost passport declarations.

“In line with practice in other Missions, there was a need to impose fines to deter people from engaging in such infractions.

“At such an astronomical rate of loss declarations, the option will be to refer such losses to Nigeria for processing.

“This will save the booklet for genuine requests of re-issue and thereby reducing the backlog and pressure on the Mission,” the envoy said.

Abdul disclosed that the consulate had received a directive to embargo processing of lost passports pending further instructions from the headquarters.

The consul general then accused some Nigerian groups in South Africa of, “peddling lies and outright falsehoods” against the Mission and his person.

“These disgruntled elements have gone ahead to incite fellow Nigerians with intent to sabotage the Mission.

“Moreover, a lie and falsehoods often repeated amounts to a propaganda which can be misinterpreted by the gullible and undiscerning as truth,” he said.

Continue Reading

Economy

NNPC Engages Gas Producers to Improve Power Supply

Published

on

Electricity - Investors King

The Nigerian National Petroleum Corporation (NNPC) has started engaging gas producers across the country in an effort to boost gas supply to power generation companies (Gencos) and subsequently improve electricity supply.

Mr. Yusuf Usman, the Chief Operating Officer, Gas and Power, NNPC, disclosed this in Lagos during his tour of Egbin Power Plc facility on Monday.

Usman, who responded to concerns raised by the Chairman of Egbin Power Plc, Mr. Temitope Shonubi, said the company’s concern on gas supply and transmission restrictions had been noted, adding that the corporation would support it to ensure constant power supply.

I have listened to all the concerns you raised. An area of concern to me is when you talked about the gas constraints. We are going to support you to make sure that the power supply is steady. We are having a session with gas suppliers in this regard.

“I am aware that works are ongoing in this regard to ensure that all the power we generate is safely evacuated,” Usman said.

Usman, however, said he was impressed by the level of progress being recorded by Egbin, noting that the effort of the company’s management to effect turnaround maintenance at the company through overhaul of the entire system, was commendable.

Usman added: “The visit has been an eye opener for me. We have seen turbines that have been running for over 40 years. We have seen efforts being made by Egbin management to effect a turnaround at the plant through overhaul of the entire system.

“We have also seen the support you have been given to the youths through employment and capacity development opportunities.”

Shonubi, in his remarks, said Egbin Power was planning to increase power generation by 1,900 megawatt.

Shonubi said: “Egbin has 1,320MW capacity. As at the time we took over, the plant was generating 300MW which is abysmal 22 per cent. As at today, our generation capacity has surged and we do 89 per cent.

“We have reached the highest peak of 970MW and we are working hard to ensure sustainability of this feat.

“The 970MW we hit is the highest recorded this year and based on our core value of sustainability, we are working round the clock to make sure that we sustain the gains, which we have made.”

Continue Reading




Advertisement
Advertisement
Advertisement

Trending