The Federal Government has commenced efforts to settle outstanding liabilities under the Export Expansion Grant while working on a new framework to make the export incentive programme financially sustainable.
The Minister of Industry, Trade and Investment, Jumoke Oduwole, disclosed this on Thursday in Abuja at a stakeholders’ engagement on the Export Expansion Grant scheme.
Oduwole said the EEG had accumulated unpaid claims dating back to 2020, creating a substantial backlog that the present administration was now working to address.
She explained that before the outstanding claims could be settled, exporters’ submissions would have to undergo validation and verification to establish the legitimacy and value of the amounts being demanded.
The minister said the exercise involved several government institutions, including the Federal Ministry of Finance, the Central Bank of Nigeria and other relevant agencies.
She explained that the Federal Ministry of Industry, Trade and Investment oversees the EEG as an export promotion mechanism implemented through the Nigerian Export Promotion Council.
According to her, the government’s approach involves two parallel objectives: resolving the existing payment obligations owed to exporters and redesigning the incentive programme to ensure that it can operate on a sustainable basis in the future.
Oduwole linked the proposed reforms to President Bola Tinubu’s Renewed Hope Agenda and the administration’s ambition of building a $1 trillion economy, noting that greater emphasis was being placed on diversification of the economy and expansion of non-oil exports.
She said Nigeria’s non-oil export sector had recorded increases in both the volume and value of exports over the past two years, adding that the government intended to maintain support for exporters while ensuring that incentives were financially sustainable.
The minister said a stronger non-oil export sector could contribute to employment generation, increase the international reach of Nigerian products and strengthen the country’s productive capacity.
She also pointed to efforts to expand market opportunities for Nigerian businesses through trade arrangements, including the African Continental Free Trade Area.
On the outstanding payments, Oduwole disclosed that claims already approved in May 2023 would be forwarded to the 10th National Assembly for consideration and approval.
She explained that the legislative process was necessary before the Federal Government could issue the financial instruments required to settle the obligations.
“President Tinubu has also approved earmarking 40 per cent of the NEST Fund toward a trade facilitation fund.
“The independently managed fund will provide a sustainable pathway for settling EEG obligations and supporting trade facilitation. Once the National Assembly approves the payments, government can issue promissory notes through the Debt Management Office to clear the backlog.
“The government will thereafter establish a reformed framework for export expansion incentives,” she said.
Oduwole said the existing structure of the EEG was no longer sustainable because of its high cost and the absence of a defined end point for the programme.
She explained that the proposed replacement would introduce changes to the type of exports eligible for incentives, with greater emphasis on value addition and finished products rather than the export of raw materials.
The minister said the restructured programme would also take into account the needs of emerging businesses and sectors that require additional support to improve their ability to compete in international markets.
She added that the government had been consulting key stakeholders, including the Nigerian Export Promotion Council and the Manufacturers Association of Nigeria Export Group, as part of efforts to develop a new and sustainable framework for export incentives.
The proposed reforms are expected to address the accumulated obligations under the existing EEG while creating a new structure designed to support Nigeria’s non-oil export ambitions without placing an unsustainable financial burden on the government.
ENDS
