The possibility of experiencing a revamped non-oil sector before the end of the 2018 financial year appears to be elusive going by the lingering challenges and inability of government to implement key incentives needed to stimulate the sector’s operations.
According to operators, the sector has been experiencing recovery difficulties as a result of the negative impact it suffered between 2015 and 2016.
Indeed, the operators noted that the sluggish growth rate of 1.5 per cent the Nigeria economy recorded in Q2 2018 calls for urgent policy measures and engagements to boost economic activities, considering that dominant sectors in the non-oil sector of the economy either recorded low growth or contracted in Q2 2018 indicates that urgent actions are required.
Manufacturers Association of Nigeria Export Promotion Group (MANEG) Chairman, Chief Ede Dafinone decried the lack of incentives for the non-oil sector, adding that since the collection of unutilised Negotiable Duty Credit Certificates (NDCCs) by the Federal Government, no payment has been made to the exporters, thus putting the exporters in a difficult position with their banks.
“The year 2017 was difficult for our members as shortage of foreign exchange lingered in the period coupled with other familiar challenges of the sector such as high cost of energy and of funds, multiple levies and taxes, smuggling that unleashed untold constraints on manufacturing operations”, he added.
On the estimated time of recovery of the non-oil export sector, Dafinone said while the significant damage to non-oil export was done in 2015 and 2016 when access to foreign exchange was difficult for the manufacturing sector, as well as the suspension of the EEG, recovery is happening slowly and may not be fully realised until 2019.
Lead Consultant, 3T Impex Consulting Limited and LCCI Export Group Chairman, Bamidele Ayemibo noted that non-oil export challenges became intensified since the beginning of the year.
He expressed displeasure about the situation saying: “Countries that are considered as great are mainly non-oil export oriented.
It is interesting to note that while other countries are taking this seriously, Nigeria is not serious about it.
Every policy is geared to support import but that which is supposed to support export is either on paper and never implemented or partially implemented. It is a sad one.
“We have facilitated a lot of export for clients but we keep postponing and extending the dates of shipment.
In the middle of all this issue, Nigeria is caught in the web of the trade war between the United States and China.
Non-oil exporters are suffering on two fronts China’s declining demand for imports and delay in payments as well as inability of exporters to ship the goods.
“Some people have had to suspend shipments because goods take longer time on the roads.
Though exports volume in Q1 of this year was high, there are expectations that the volume will drop significantly in Q2 and Q3. Typically exports volume rise in Q1 and Q4. Because we deal in agro-based products, Q3 and Q4 are the peak periods.
“Nigerian exporters are very resilient and should be encouraged as the volume could be higher if there were no challenges in the sector. The situation is getting worse presently and the sector may witness 25 per cent drop in transactions volume”.
Dafinone however commended the Federal Government for reviving the EEG , especially for expanding the use of the Export Credit Certificate and transferability of the ECC, adding that expansion would aid the transfer of the ECC to a third party and use it to settle all federal government taxes as well as settlement of certain liabilities.
“We are hoping that the benefits will be distributed more promptly so as to enable exporters to have access to the reliefs that the grant is meant to give on time.
The support facilities are still at the early stage. We are yet to see a real movement to show that the EEG backlog will be paid”, he said.
Director, Policy and Strategy at the Nigerian Export Promotion Council (NEPC), Abdullahi Sidi-Aliyu, said: “The EEG for so many years is what many exporters leverage to expand their activities.
In the absence of such incentives, non-oil export activities continued to dwindle and this affected the volume of non-oil export that is being recorded.
We are advocating that the EEG be revitalised and exporters given access to the incentives to boost their activities.
“On the issue of promissory notes, we are appealing to non-oil exporters to be patient. Government has done all that is necessary for the take off of the programme. We are waiting for the National Assembly to reconvene to grant approval for the programme.
A lot of debts are also affected by the prolonged delay of the lawmakers reconvening”.
Source: G Business