Home Business FG suspension of NDCC affects volume of exports–MAN

FG suspension of NDCC affects volume of exports–MAN

by Business News Report

The President of Manufacturers Association of Nigeria (MAN), Dr Frank Jacobs says the Federal Government suspension of Negotiable Duty Credit Certificates (NDCC) has affected the volume of export of manufactured products. Jacobs made this known in an interview with newsmen in Abuja yesterday.
He said that the suspension of NDCC had destroyed the confidence that had been built up over the years by overseas importers of Nigerian products as a result of inability of Nigerian exporters to meet delivery targets. The Export Expansion Grant (EEG) Scheme was introduced in 2005 to push Nigeria’s non-oil exports as the country seeks economic diversification routes away from the oil sector.
The EEG scheme was operated by the use of the NDCC, which served as cheques for non-oil exporters who wished to benefit from the grant. Recipients of the export grant hold an instrument called NDCC which they use in the payment of import and excise duties. The essence of the grant was to reduce production, distribution and logistics costs for non-oil exporters to enable them compete effectively in the international market.
The understanding of the initiators of the scheme was that allowing non-oil exporters to bear the brunt of the costs will make their products uncompetitive in the international market.
Jacob said that unfortunately the scheme, which had the potential of increasing the revenue base and employment generation was suspended by the government in 2014.

“With the suspension, which led to the refusal by the Nigeria Customs Service to accept NDCC payment instrument for the EEG, exporters started incurring huge costs for duty payment that NDCC was meant to cover for their raw materials imports. As at today, our members have over N64 billion unused NDCC and over N87 billion NDCC claims for the EEG applications they have submitted which are yet to be processed.
“This has cause export of manufactured products to drastically reduce,’’ Jacobs said.
The president said that the introduction of EEG scheme was a useful tool for the diversification of Nigeria’s revenue base.
Jacobs said that the scheme was established to reduce Nigeria’s dependence on oil both as a source of income and foreign exchange earnings. According to him, the policy recorded a major success with the volume of non-oil exports increasing from 700 million dollars in 2005 to 2.9 billion dollars in 2013. He said that the scheme led to an increase in value chain expansion in terms of processing manufacturing capabilities which resulted in significant new investments and job creation in the manufacturing sector.

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