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.”
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