NEPC hopes to get N156 billion EEG backlog cleared
Stakeholders expressed concerns about the country’s low non-oil exports, citing them as one of the main reasons for the large trade balance deficit, as well as insufficient foreign exchange earnings.
With 194 billion naira of the outstanding Export Expansion Grant (EEG) already settled via promissory notes from the Debt Management Office (DMO), the Nigerian Export Promotion Council (NEPC) has assured the approval and settlement of the remaining 156 billion naira by the National Assembly.
According to NEPC, the backlog remains unstable as it did not increase during the previous session of the National Assembly, but expressed optimism that the Ninth Assembly would consider the settlement to promote non-oil exports.
In addition, operators in the non-oil export value chain have raised concerns over their inability to access affordable funds for exporting, noting that reliance on informal sources continues to crowd out small actors.
They noted that the continent’s trade finance gap is estimated at $ 81 billion, with the COVID-19 pandemic worsening the plight of small businesses.
Speaking at a webinar hosted by the Lagos Chamber of Commerce and Industry (LCCI) on financial support for exporters, NEPC Managing Director Olusegun Awolowo said the Council is also considering factoring as way to close the export financing gap.
“We are looking at priority products for market access as well as new products that can be added to the list. Africa’s trade finance gap is estimated at $ 81 billion. Banks do not finance trade due to the creditworthiness of customers and insufficient collateral.
“The Export Development Fund (EDF) would soon be launched while the 5 billion naira under the Economic Sustainability Fund would be explored to prepare and facilitate the global market for global trade, market access and competitiveness.” , he added.
He urged non-oil exporters to comply with the requirements set by the NEPC to ensure that their requests are accepted. Regarding the expansion of exports to other ports, he denounced insecurity as a major concern for ships exploring the region, but urged operators not to give in. He noted that the NEPC used the port of Calabar to export nearly 7,000 tonnes of cocoa recently.
LCCI President Toki Mabogunje said that while Nigeria has vast raw materials in the petroleum sector, which can be harnessed to increase exports and improve our trade balance, exporting primary products to the global community without added value remained a challenge for diversification efforts.
Mabogunje, who was represented by Abimbola Olashore, noted that it will be increasingly difficult for the economy to take advantage of the recent depreciation of the exchange rate of the naira to improve global competitiveness and correct our external imbalance without raising the obvious systemic challenges.
“The fiscal and monetary aspects of political authorities have a key role to play in providing an operating environment favorable to non-oil exporters for value-added activities. While some recent government measures to improve the lot of non-oil exports are laudable, we still need to do more, ”she added.
LCCI export group chairman Bosun Solarin denounced the dependence of many non-oil exporters on informal sources of finance, despite their contributions to GDP.
“Our economy is almost in a coma due to the country’s trade balance. SMEs in the commodities trade also compete with foreigners who overestimate them and outbid local markets. Even those in the agro-industry are also affected by the lack of funding to buy machinery. The country must go beyond rhetoric to take concrete measures, ”she added.