The Federal Government on Monday announced the removal of the bank guarantee requirement for exporters.
This means that exporters are now free to receive their Negotiable Duty Credit Certificates (NDCCs) without the bank guarantee.
The NDCC entitles an exporter to offset part or whole of subsequent Customs and Excise duties payable to the Federal Government of Nigeria.
This was one of the major outcomes of the meeting of the Inter-Ministerial Committee of the Export Expansion Grant (EEG) Scheme chaired by the Minister of State for Finance, Remi Babalola in Abuja.
The Committee is the policy-making body of the Scheme.
The meeting, which was held at the headquarters of the Federal Ministry of Finance, was attended by representatives from the Federal Ministry of Commerce and Industry, Central Bank of Nigeria, Nigeria Customs Service, Nigeria Export Promotion Council, Manufacturers Association of Nigeria, Economic and Financial Crimes Commission, Presidential Committee on Trade Malpractices, Fiscal Policy and Budget Monitoring Department of the Federal Ministry of Finance and consultants to the scheme, PricewaterhouseCoopers.
The minister, at the meeting, expressed the Federal Government’s commitment to step up the operations of the Export Expansion Grant Scheme (EEG), towards the realisation of its key objective of stimulating export-oriented activities that would lead to the growth of the non-oil export sector in
Nigeria.
He explained that the removal of the bank guarantee requirement was to eliminate additional costs to the exporters as well as remove impediments to doing business in the country.
Babalola noted that the removal of the bank guarantee would encourage exporters to venture into the non-oil business towards enhancing foreign exchange earnings for the country.
"The Federal Government believes that with this bold initiative to give vitality to the Scheme, it will not be long before the non-oil sector begins to gain ascendancy in contributing foreign exchange into the national coffers.
"This is in line with government’s avowed policy of diversification of the national earning base. I want to enjoin all stakeholders to support this Scheme fully, towards making our nation a force to be reckoned with in the world," said Babalola, who is the Chairman of the Inter-Ministerial Committee of the Scheme.
The meeting reviewed the key objectives of the Scheme, highlighting its contributions in boosting the non-oil sector of the economy. It was agreed that while there are areas of observed lapses which require improvement, the Scheme should be supported by all stakeholders.
It also resolved that various strategies aimed at improving the turnaround time involved in the issuance of the NDCC should be instituted, particularly the need to improve record-keeping by exporters and setting deadlines for the NEPC to process outstanding 2007 and 2008 Certificates.
Other resolutions agreed at the meeting include: that the Nigeria Customs Service should honour the NDCC as payment for duties; resolution of the issue of double-dipping and the need for a Technical Committee to review other challenges confronting the Scheme.
The EEG is one of the novel export incentives introduced by Government through the Export (Incentives and Miscellaneous Provisions) Act of 1986 as amended by the Export (Incentives and Miscellaneous Provisions) Act of 1992.
To benefit from the Scheme, exporters are required to register with the Nigeria Export Promotions Council after meeting certain criteria.
The Scheme is company specific and utilises data from the exporters’ audited financial statements filed with the Corporate Affairs Commission (CAC) to assess them on the basis of weighted eligibility criteria. These criteria include export growth, investment growth, local content, value addition, employment generation and priority sector.
Thereafter, exporters are entitled to make claims based on the value of export proceeds they receive and duly certified by the Central Bank of Nigeria.
The approved claims are paid to exporters by Government through the use of a negotiable instrument known as the Negotiable Duty Credit Certificate (NDCC).
The Scheme has gone through some transformations since inception, but it has been contributing significantly to the development of non-oil exports in Nigeria . Over the years, it has shown to be an invaluable platform for Nigerian exporters to contribute po