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Manufacturers protest non-payment of grants

By on March 17, 2014

Some manufacturing companies have complained about what they call the lopsidedness in the payment of the Export Expansion Grant.

The affected manufacturers said they could be forced to lay off many of their workers if the grant was not paid immediately.

The EEG was introduced by the Federal Government to assist exporters of non-oil products to overcome the effects of infrastructural deficiencies and reduce the overall unit cost of production.

It  is  also meant to increase the competitiveness of Nigerian products in the international market. It ranges from 10 per cent to 30 per cent of the Freight On Board value of the products being exported.

The EEG scheme is managed by an implementation committee made up of representatives from the Nigerian Export Promotion Council, the Federal Ministry of Finance, Nigeria Customs Service, Central Bank of Nigeria and Federal Ministry of Industry, Trade and Investment.

Following cases of abuse, the Federal Government had unveiled plans to review the scheme.

Investigation by our correspondent on Friday showed that majority of the manufacturers that were meant to benefit from the scheme had yet to receive their grants.

The development was confirmed by some officials of the manufacturing companies participating in the EEG programme.

The officials, who asked not to be named owing to the sensitive nature of the matter, expressed doubts about the sincerity of the Federal Government in implementing the scheme.

They said while it was desirable to review the scheme, the payment of the arrears of claims should be completed before the review.

An official of one of the manufacturing firms said out of 400 companies that should benefit from the programme, only five had been fully paid.

The source said the way the claims were being settled had made it difficult for all participating companies to have a level playing field.

This development, the source said, was currently affecting the operations of the companies as most of them were experiencing a huge financial problem due to high operating costs.

One of the manufacturers said, “The EEG is a very good scheme but its implementation in recent years has raised serious concerns from exporters. As I speak to you now, we have billions of naira waiting for the approval of the implementation committee.

“We take the EEG incentives into consideration when preparing our accounts as they are needed for the continuity of the business. Our inability to claim it has put some of us in financial difficulties.”

Another source told our correspondent, “We feel there is no equal playing field in the approval process of the EEG and we consider this as an act of sabotage.

“Many of the companies have thousands of workers and have taken loans from banks with huge interests and depend on this grant for their survival.”

Efforts to get the finance ministry to comment on the manufacturers claims proved abortive as messages sent to the Senior Special Assistant to the Minister of Finance, Mr. Paul Nwabuikwu were not responded to.

The immediate past Minister of State for Finance, Dr Yerima Ngama, had said between 2005 and 2012, the sum of N257.09bn was disbursed under the EEG programme.

A breakdown of the disbursement, he had said, showed that N21.92bn was disbursed in 2005; N24.35bn in 2006; N11.03bn in 2007 and N29.47bn in 2008.

Similarly, N41.18bn was paid in 2009; N27.96bn in 2010; N67.39bn in 2011 and N30.75bn in 2012.

 

 

[Punch]