The Nigerian Export Promotion Council (NEPC or the Agency) has requested that qualifying exporters submit baseline data for the 2019 and 2020 fiscal years. This is to aid the determination of applicable export ratings, which are incentive rates applicable under the revised export expansion grant (EEG) scheme (“the Revised EEG” or “the Scheme”). This request for submission of baseline data will run from 19 October 2020 to 20 November 2020. A copy of the public notice can be accessed here.
It will be recalled that the Federal Government of Nigeria (FGN) re-introduced the Scheme on 1 January 2017, after a three-year suspension and eventual reform. Details of the Scheme have been outlined in our Trade Newsletter.
The current request by the NEPC is therefore in furtherance of FGN’s commitment to promoting export, which has been identified as critical to stimulating the non-oil sector, a key pillar of the economic recovery and growth plan.
The baseline data required by NEPC for the 2019 & 2020 fiscal years include:
- Completed baseline forms 1A, 1B, 1C and their annexes, which can be accessed on www.nepc.gov.ng
- Audited Financial Statements (AFS), which should include value-added statements for the respective base years
- Additional notes that are aligned with the AFS and baseline forms, showing the following:
- Analysis of sales (local and export sales)
- Analysis of export sales showing the exchange conversation rates used
- Breakdown of the cost of sales (i.e. raw materials and packaging) into local and foreign input
- Details of additions to fixed assets for the base years
- Tax clearance certificates and export expansion plan in line with the Revised EEG
- Export schedule for each year of application
Baseline data and all accompanying documents must be submitted in soft and hard copies to aid the transition to the Revised EEG portal. For the soft copies, the information should be scanned in a single portable document format, saved on a data storage device and forwarded with the application.
While the information required for application under the Scheme has not changed from previous baseline data request, it is positive news that the Agency is close to completing the automation of the Revised EEG. It will be recalled that upon re-introduction of the Scheme, automation and digitalization were some of the measures earmarked as necessary to address abuses noted under the old scheme.
While we commend NEPC for its efforts to clear all outstanding years i.e. 2019 and 2020 fiscal years, it is important that the Agency considers extending the timeline for submission, as many qualifying exporters are still facing financial reporting delays caused by the COVID-19 pandemic. The need to clear the backlog of applications should not be more important than the need to provide all qualifying exporters with the incentives required to survive a very precipitous economic climate.
Until the NEPC extends the deadline for submission, we recommend that qualifying exporters make plans to submit their baseline data before the communicated deadline. Importantly, intending applicants must adhere to the guidelines and accurately complete the forms to avoid rejection of their application, either as a result of illegible or incomplete documents.