- 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.
AfCTFA to Cushion Negative Effect of Covid-19, Boost Regional Income by 7%- World Bank
World Bank Says Successful Implementation of Trade Pact Could Increase Africa’s Income by $450 Billion
A recent report by World Bank has revealed that the African Continental Free Trade Area (AfCFTA) agreement will avail African countries the opportunity to boost growth, reduce poverty, widen economic inclusion and increase regional income by 7 percent or $450 billion.
The multilateral financial institution further stated that the successful implementation of the trade pact could cushion the negative effect of the global health pandemic, lead to a surge in wage growth for women and lift over 30 million people out of extreme poverty by 2035.
Given the economic damage caused by Covid-19, the report suggested that AfCFTA’s income gain would likely come from simplified customs procedures, tariff liberalization and reduction in non-tariff barriers. Also, putting in place trade facilitation measures that cut off the red tape, reduce compliance costs for businesses, improve ease of doing business in Africa and broaden the continent’s global supply chains would bolster income gains.
World Bank explained that the AfCFTA agreement would help cushion the negative effects of COVID-19 on Africa’s economy — by supporting regional trade and value chains through the reduction of trade costs. In the longer term, AfCFTA would provide a path for integration and growth-enhancing reforms for African countries by replacing the patchwork of regional agreements, streamlining border procedures, and prioritizing trade reforms, AfCFTA could help African countries increase their resiliency in the face of future economic shocks.
The World Bank’s Chief Economist for Africa, Albert Zeufack, said, “The AfCFTA is expected to lift around 68 million people out of moderate poverty and make African countries more competitive. But successful implementation will be key, including careful monitoring of impacts on all workers –women and men, skilled and unskilled—across all countries and sectors, ensuring the agreement’s full benefit.”
“The African Continental Free Trade Area has the potential to increase employment opportunities and incomes, helping to expand opportunities for all Africans,” he further stated.
According to the report, the trade pact would reshape markets and economies across the region, leading to the creation of new industries and the expansion of key sectors.
AfCFTA would also significantly boost African trade, particularly intra-regional trade in manufacturing. Intra-continental exports would increase by 81 percent while the increase to non-African countries would be 19 percent.
Oil Marketers: Panic Buying Ahead of Possible Increase in Pump Price
Oil Marketers in Panic Buying Mood Ahead of Possible Increase in Pump Price
A new finding has shown that filling station owners are presently in panic buying mood ahead of a perceived increase in pumping price of petrol in August.
Petroleum Products Pricing Regulatory Agency during the weekend said pumping price could rise due to the surge in oil prices in recent weeks.
According to experts, pumping price could hit 150 per litre this month, especially after comments from the president of the agency validated that possibility.
Billy Gillis-Harry, the National President, Petroleum Products Retail Outlets Owners Association of Nigeria, said “There is panic buying and it is because of the worry that prices will be reviewed either downwards or upwards. But because of the marginal rise in crude oil prices, the calculation is that petrol price could go up.”
He added, “That is the situation and this was why we requested that there should be a stakeholders’ engagement every month or quarterly so that we can be sure of what to expect.”
He, however, said a lot of marketers have said they are not going to hike price immediately, particularly if there was an increase in the price of petrol in the month of August.
The PETROAN president said, “Many of our members have been buying products since (July) 22nd and now they have products lined up, hoping that if PPPRA increases price, they will manage the cost in a way that Nigerians will know that we are not out to profiteer.
“We are out there to give service. So if we got products at this current rate of about N143 and they are ready to shoot the price up to N155, which is what is being anticipated, we will still sell at N143.”
NNPC Refutes Samano Sa De CV Theft Claim, Says no 48m Barrels Missing
NNPC Says no 48m Barrels Missing, Called Samano Sa De CV Blackmailer
Following Samano Sa De CV publication that 48 million barrels of crude oil valued at an estimated $2.06 billion was illegally moved in 2015 from the country to China and eventually sold despite the company informing the then Chief of staff to the President, Abba Kyari, the Group Managing Director, NNPC, Mele Kyari and other top government officials. The Nigerian National Petroleum Corporation (NNPC) has now denied any knowledge of such theft.
In a letter signed by Mr Kehinde Ogunwumiju (SAN), NNPC’s lawyer from Afe Babalola & Co., and addressed to Samano Sa De CV’s counsel, Mr Gboyega Oyewole (SAN), Ogunwumiju claimed that the letter sent to the corporation was “not only unfounded but frivolous”.
He described the whole whistleblowing of Samano Sa De CV as “a gold-digging scheme” aimed at “blackmailing and extorting money from our client and the Federal Government of Nigeria”.
The NNPC’s lawyer stated, “We wish to emphatically and unequivocally state for the record that our client vehemently denies your client’s claim that it provided any information to NNPC or the Federal Government of Nigeria which information led to the identification and/or recovery of 48 million barrels of stolen Nigerian Bonny Light Crude Oil stored in the People’s Republic of China.
“Accordingly, it is our client’s position that your client is not entitled to the payment of five per cent of the value of the allegedly stolen crude or any amount whatsoever as compensation for information it purportedly gave to the Federal Government of Nigeria in respect of the said stolen crude stored in the People’s Republic of China.”
He also stated that “it was impossible to ship 48 million barrels of crude oil from Nigeria to China without any record or trace of same” especially because, “as of 2015, the daily production of crude ml in Nigeria was below 1.6 million barrels.”
Ogunwumiju added, “Therefore, 48 million barrels of crude oil would have been the total production capacity of the whole country for a month.
“It is simply impossible that one-month crude oil production would disappear without any record or trace.”
According to him, notwithstanding the firm’s failure to provide evidence to support its claims, “relevant officials of the government were mandated to proceed to China to verify the claims of the existence of the said stolen Nigerian crude oil.”
He stated, “The said delegation discovered that the Samao’s claim was false and baseless. Consequently, the government severed communications with the syndicate.
“Miffed by this, Messrs Ramirez and Jose Salazar Tinajero, acting as agents of Samao, resorted to blackmail and intimidation of key officials of the government and the NNPC, threatening to make public information that the said 48 million barrels of oil had been recovered, sold and the proceeds therefrom, looted by some government officials and the NNPC when it was aware that this was untrue.
“They also demanded $125,000,000 from the said government officials, which was conveniently and rightfully ignored.
“Thereafter, NNPC reported this case of attempted blackmail to the Department of State Services and the Nigeria Police Force.”
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