Why Nigerian govt. stopped export expansion grant — Minister

Minister of Finance, Kemi
Adeosun, said on Thursday
the federal government was
justified in stopping the
export expansion grant (EEG)
policy.
The Minister, who was
receiving the leadership of
the Nigerian Economic
Summit Group (NESG) in
Abuja, said the policy was
stopped to check the high
incidence of abuses.
“We need to realize that with
the collapse of commodity
prices, we don’t have enough
foreign exchange to buy as
many imported goods as we
like to. So, when there is
import substitution, we must
embrace it,” she said
“Although our predecessors
in office halted the
implementation of the policy,
the decision was in order
going by the harvests of
startling revelations on the
abuse of export grant,” she
said.
“On paper, EEG is to
encourage export business in
the economy. However, a
situation where we do not
have control, we open doors
for the kind of abuse, which
are only imaginable. We have
people exporting stones,
describing them as high
valued goods, collecting an
import credit and used to
import fish.
“We do need to look for how
to support export. We have to
be very realistic in the
recommendations we are
coming up with,” Mrs
Adeosun said.
The EEG is an incentive,
including reduction in import
duty rates or waivers for
equipment and materials,
granted by government to
encourage producers of goods
to export them abroad to
earn foreign exchange for the
country.
The benefiting sectors of the
economy include agricultural
machinery, solid mineral,
equipment and gas-using
equipment, aviation, health,
mines and steel, water
resources, gas, power, as well as
donations to states, education and
related ministries, departments and
agencies, MDAs.
Others include the steel sector, specific
manufacturing sub-sectors, including
imports of completely-knocked down
parts, automobiles and tyres.
The policy covered sectors seen as
strategic areas capable of stimulating
growth, supporting diversification of the
Nigerian economy, and creating jobs for
Nigerians, and promote Nigeria’s non-oil
exports.
On the ongoing policy review by the
government, Mrs. Adeosun sought the
understanding of the private sector in
that direction, saying they should come
up with implementable policies in view
of the current economic situation in the
country.
She said the NESG must be ready to work
with the Ministry of Finance by keeping
track of some of the recommendations to
the Federal Government.
“I ask you to keep track of how many of
your polices are implemented and those
not implemented,” she said. “You also
need to find out why those policies were
not implemented. They may be great
policies at wrong times, or wrong
policies. They may even be
unimplementable policies.
The Minister also stressed the need to
prioritize in the face of the revenue
challenge in the country.
“Yes, the economy is challenged and
people are extremely frustrated. We
need to rebuild fundamentally. We need
to prioritize. We have to rebuild this
country and it has to be data driven.