The Federal Government of Nigeria has commenced efforts to settle approximately N330.08 billion in outstanding claims under the Export Expansion Grant (EEG), while also working to redesign the scheme around a more sustainable funding structure.

The Nigerian Export Promotion Council (NEPC) is leading the process alongside the Manufacturers Association of Nigeria Export Group and other stakeholders, following a directive from the Minister of Industry, Trade and Investment, Jumoke Oduwole.

NEPC Executive Director and Chief Executive Officer, Nonye Ayeni, disclosed the development on Thursday at a stakeholder engagement on the EEG scheme held at the council’s headquarters in Abuja.

According to Ayeni, the meeting was organised to review the liabilities accumulated under the programme, consider challenges affecting its implementation and develop recommendations for restructuring the scheme.

She said the government acknowledges the outstanding claims but noted that payments would only proceed after the required verification and approval procedures had been completed.

Ayeni explained that the obligations include claims already approved under the Promissory Note mechanism, verified claims for the 2017–2020 and 2021–2022 periods, and stepped-down claims that are still awaiting verification and approval.

In May 2023, the Federal Executive Council approved a Promissory Note Programme valued at about N269.45 billion to settle verified EEG claims involving 195 beneficiary companies.

In addition, stepped-down claims estimated at N60.64 billion remained outstanding for 32 companies for the 2017–2020 period.

The two categories bring the total outstanding claims to approximately N330.08 billion.

The Federal Government said its approach is aimed at clearing legitimate obligations while ensuring that payments from public funds are backed by the appropriate verification, validation and approval processes.

Alongside efforts to resolve the backlog, the government is developing a fresh funding model for the export incentive programme.

Oduwole said President Bola Tinubu had approved the creation of a professionally managed Trade Facilitation Fund. Under the proposed arrangement, 40 per cent of monthly Nigerian Export Supervision Scheme collections will be ring-fenced for strategic trade facilitation and export incentive interventions.

The proposed funding structure is expected to establish a more direct relationship between available resources, verified export performance and the government’s obligations to exporters.

The Federal Government also intends to increase the use of technology in the administration of the EEG. The planned improvements will cover data management, verification procedures and transparency regarding the status of exporters’ claims.

The Export Expansion Grant is a post-shipment incentive programme established to enhance the competitiveness of Nigerian products and grow the volume and value of non-oil exports.

Under the scheme, eligible exporters receive Export Credit Certificates, which may be used to meet certain Federal Government tax obligations and other approved liabilities.

Eligibility is determined using factors that include local value addition, local content, employment and export growth.

The government said the proposed reforms are intended to correct weaknesses that contributed to the accumulation of unpaid claims and establish a more predictable framework for exporters.

The restructured system is also expected to focus more strongly on actual export performance, domestic value addition and the diversification of Nigeria’s non-oil export base.

The Ministry of Industry, Trade and Investment is collaborating with the NEPC, Federal Ministry of Finance, Debt Management Office, Office of the Accountant-General of the Federation, Central Bank of Nigeria, National Assembly and other relevant institutions to reconcile the outstanding obligations and advance the settlement process.

Ayeni said the stakeholder engagement would provide an opportunity to assess exporters’ experiences under the scheme and develop practical recommendations for its restructuring.

She also noted that Nigeria had experienced growth in the volume and value of non-oil exports, the range of products exported and the number of international destinations reached.

The latest government initiative comes amid efforts to strengthen Nigeria’s non-oil export sector and establish an export-incentive funding mechanism that can remain viable over the long term.

Source: Msme Africa Online