Nigeria’s Debt Management Office (DMO) has said that a total of N195 billion (about $510 million) has been disbursed to 270 exporters under the Export Expansion Grant (EEG) programme of the federal government.
However, the figure is lower than the N350 billion earlier approved by the Federal Executive Council (FEC) for disbursement to about 1,400 exporters.
Out of the initial beneficiaries approved, about 38 companies were reportedly dropped, drawing criticisms from stakeholders.
DMO’s Team Leader, Securities Issuance Unit, Portfolio Management Department, Mr. Adamu Mohammed, however, defended the lower figure, saying: “What has been approved by the National Assembly and sent to the Federal Ministry of Finance, Budget and National Planning and ultimately forwarded to the DMO for payment was about N195 billion for 270 exporters.”
He said during a validation roundtable held virtually in Abuja on the recently concluded study on “Analysis and Impact of the Export Expansion Grant on Export Potentials, Market Access and Export Competitiveness in Nigeria,” that till date, only about N1.3 trillion had so far been approved by the National Assembly out of the N3.3 trillion promissory notes approved by Federal Executive Council (FEC) in 2017 to offset the federal government’s indebtedness in various categories.
In 2017, FEC had okayed a promissory note programme to settle outstanding debt obligations of the federal government worth about N3.3 trillion$8.6bn) of which the EEG was only about N350 billion (about $930 million).
However, responding to questions from stakeholders on the role of the DMO in the non-payment of the approved grants to exporters, Mohammed said the debt office could not second guess why some of the claims were approved and while others were declined.
He said the DMO had acted in compliance with the Fiscal Responsibility Act (FRA) to ensure that only duly approved companies received their funds, adding that all the approved claims had since been settled.
He explained: “As I said, EEG claim was N350 billion; that is what was submitted to the National Assembly as approved by FEC.
“To that extent, the DMO doesn’t know about any other exporter that is not in this 270.
“The Fiscal Responsibility Act is very clear; for DMO to issue any instrument there must be approval of the National Assembly. That is what happened. We don’t know why we have 270 companies instead of the large numbers of companies that were initially approved by FEC.
“There are 13 categories of creditors for that N3.3 trillion but only about three or four categories have been approved by the National Assembly to date worth about N1.3 trillion out of the N3.3 trillion.
“So, we don’t know what happened but as it is, we have approval for those categories and we have settled including the exporters which had been approved.”
Also commenting on the backlog of EEG claims during the roundtable, Deputy Director, Incentive Division, Nigeria Export Promotion Council (NEPC), Mr. Lawal Dalhat, explained that the National Assembly was supposed to approve what was agreed by the FEC, stressing that some companies were left out during the review process by the legislators.
But he said the commission is working with the finance ministry to see how the affected exporters could be included and paid within.
Dalhat said: “The situation is beyond our control and they (lawmakers) had their processes. We only received communication from the Ministry of Finance on approved and unapproved companies.
“But we are still working with the private sector and other agencies of government to ensure that the National Assembly reconsiders those companies not passed by the legislature for them to also benefit from their legitimate claims.”
However, Chairman, Manufacturers Association of Nigeria Export Group (MANEG), Chief Ede Dafinone, stated that there was no basis for the exclusion of the 38 companies, adding that some of the companies are currently the most profitable multinationals within the country.
“I want to reiterate that the fact that whether a beneficiary of EEG is a multinational doesn’t mean that the money is going abroad.
“Again, a multinational that receives a super profit as a result of the EEG will be encouraged to invest in the Nigerian export market in order to earn future super-profits. And this is what we need to expand growth in the non-oil market. Government has a commitment to settle a grant they have promised to pay,” he said.
The report, which was authored by President, Nigeria Trade and Investment Centre Inc., Mr. Olufemi Boyede, among other things, called on the federal government to promptly settle all outstanding EEG claims as approved by FEC.
The survey further called for the creation and legislation of the EEG as well as ensuring the full endowment of the Export Development Fund (EDF) to arrest the preponderance of policy somersaults as currently being experienced.
“We are at a point as a nation where we must either export (non-oil) or perish. The only way to ensure forex supply (and shore up the exchange rate) is to encourage exports,” it stated.