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Industrial Incentives
This section of our website is dedicated to the Industrial Incentives. Here you can find information about: In the process of encouraging manufacturers; the Nigerian Government has in placed several incentives that are geared at encouraging indigenous manufacturers and a way of promoting exportations.
They are:
Manufacturers Exports – In – Bond – Scheme (MEIBS) Export Expansion Grant Scheme (EEG)
Bonafide Manufacturers /Assemblers (BMA)
Free Trade Zones /Export Processing Zones & Oil and Gas free Zones
Manufacture in – bond scheme (MIBS) : Definition
This scheme is designed to encourage manufacturers to import duty free raw material inputs and other intermediate products whether prohibited or not for the production of goods for export, backed by a Bond issued by any recognized Commercial Bank, Merchant Bank, Insurance Company or Nigerian Export-Import (NEXIM) Bank. The bond will be discharged after evidence of exportation and repatriation of foreign proceed has been produced.
Manufacture – in – bond scheme (MIBS): Guidelines
- The Manufacturer-In-Bond Scheme (MIBS) shall be applicable to export manufacturers only.
- Interested manufacturers shall apply to the Federal Ministry of Finance using the prescribed forms.
iii. For a manufacturer to enjoy the scheme, the factory premises must be approved for that purpose by the Nigeria Customs Service.
- Approval including the Import Requirement Certificate (IRC) should be obtained within a period of two months and transmitted to the Nigeria Customs Service for implementation.
- The Nigeria Customs Service will determine acceptable guarantee Bond issued by Commercial or Merchant Banks or NEXIM or Insurance Companies covering not less than 110 per cent customs duty payable on each consignment.
- Under this scheme, manufacturers of export commodities will be entitled to import duty-free raw material inputs. CKD and intermediate inputs whether prohibited or not for the manufacturer or export goods.
vii. The Manufacturer-in-Bond Scheme shall operate on annual 12 calendar months importation basis as the exporter wishes. For prohibited items however, the scheme shall operate on Import-by-Import basis.
viii. The Bond, which shall be effective from the date of its issuance by the Bank, shall be discharged when the conditions stipulated therein have been fulfilled.
- The Nigeria Customs Service will periodically monitor the utilizations of raw materials imported under this scheme until the Bond is fully executed.
- In the event of inability to any manufacturer to fulfil the conditions stipulated in the Bond, the manufacturer should apply to the Nigeria Customs Service through the approved guarantor, for an extension of the Bond particularly when the life of the Bond has expired.
The extension of the Bond shall not exceed three months.
- Repatriation of the foreign exchange realized from the transaction shall be confirmed by the Central Bank of Nigeria before the Bond is discharged.
xii. Single Good Declaration Form SGD Form C.2010 marked “Manufacturer-in-Bond Scheme” shall be used for the clearance of goods under the scheme.
xiii. A committee comprising of the representatives of the Ministry of Finance, Nigeria Customs Service, Nigerian Export Promotion Council, Standards Organization of Nigeria and the Central Bank of Nigeria shall monitor the scheme. The monitoring body shall render a quarterly Report to the NMIBS Committee.
xiv. In the event of default by the Manufacturer, the Nigeria Customs Service shall redeem the Bond by calling on the guarantor to pay up the appropriate customs duties and other associated charges.
- In the case of liquidation the Company may be allowed to sell the goods in the local market with the approval of the Honourable Minister of Finance on condition that the appropriate customs duty and other associated charges shall be paid.
xvi. A manufacturer participating in the Manufacturer-in-Bond Scheme is expected to designate a warehouse or store in his factory premises for the storage of inputs and finished goods; and
xvii. Clean Report of Inspection (CRI), Form `M’ and other relevant documents for this scheme shall be clearly marked “MIB Scheme”.
Guidelines for Redesigned Export Expansion Grant Scheme
Preamble:
The Export Expansion Grant Scheme is a very vital incentive required for the stimulation of export oriented activities that will lead to significant growth of the non-oil export sector. The Federal Government is committed in its efforts to bring about tremendous growth in non-oil exports, resolved to enhance efficiency, transparency and accountability in the administration of the key incentive for non-oil export development. The “Export Expansion Grant (EEG)” is a policy tool to further this objective. The use of incentives supports the NEEDS objective of mainstreaming businesses that are currently operating in the informal sector. It is also in line with the NEEDS requirements that companies desiring to receive benefits from the government will have to comply with the laws of the country. The government in reviewing the scheme sets out the following guidelines:
Guidelines:
- Incentive Rate:
The Scheme would operate the “Weighted Eligibility Criteria” in assessing applications for EEG. The baseline data as supplied by individual applicant-company would be used it its assessment. Thus the method of assessment is ‘company specific’. A company’s EEG assessment would be conducted once yearly and the determined rate will apply throughout the year. The Weighted Eligibility Criteria has four bands: 30%, 20%, 10% and 5%. The following template will be used in assessing the incentive rate for every EEG applicant Eligibility Criteria Company Data Threshold Weight Company Score
Local value added 25%
Local content 20%
Employment (Nigerians) 20%
Priority sector 10%
Export growth 20%
Capital Investment growth 5%
Weight 100%
A new entrant into the EEG Scheme shall provide prior period financial statement or where applicable an investment plan for its assessment.
- Eligibility:
- Exporter must be registered with the Nigeria Export Promotion Council (NEPC)
- Eligible exporter shall be a manufacturer producer or merchant of products of Nigeria origin for the export market (i.e. the products must be made in Nigeria)
iii. An exporter must have a minimum annual export turnover of =N=5 million and evidence of repatriation of proceeds of exports
- Exporter-company shall submit its baseline data which includes Audited Financial Statement and information on operational capacity to NEPC
- Validity for EEG Application:
Qualifying export transaction must have the proceeds fully repatriated with 180 days, calculated from the date of export.
- Documentation:
All applications for Export Expansion Grant (EEG) must be completed in three copies to be circulated to Nigeria Export Promotion Council (NEPC), Central Bank of Nigeria (CBN) and Nigeria Customs Service (NCS) with the following documents:
- NEPC Export Certificate;
- Clean Certificate of Inspection (CCI) to include quality certification;
iii. Forms NXP duly certified by processing bank, Nigeria Customs Service and the Pre-shipment
Inspection Agents;
- Single Goods Declaration (SGD) Forms, duly endorsed by Nigeria Customs Service, both at front and back;
- Final Commercial Invoice;
- Bill of Lading;
vii. Evidence of full repatriation of export proceeds (CBN confirmation of repatriation of proceeds by exporter);
viii. Certificate of Manufacture;
- Any other documentation as may be required by NEPC from time to time
- Negotiable Duty Credit Certificate (NDCC):
The NDCC shall be used for the payments of import duties only.
- Company Visits:
Company visits shall be incorporated into a programme for validation of information submitted by the exporters and impact assessment of the scheme. The programme will include a first visit to validate financial as well as operational information at least once a year and as may be required. Impact assessment of the scheme on the Nigeria economy shall be carried out annually by external consultants, as may be determined by the Honourable Minister of Finance.
- Implementation Committee:
The Implementation Committee will consist of:
(1) Nigeria Export Promotion Council (NEPC)
(2) Federal Ministry of Finance (FMF)
(3) Nigeria Customs Service (NCS)
(4) Central Bank of Nigeria (CBN)
(5) Federal Ministry of Commerce
(6) Federal Ministry of Industry
(7) Special Adviser to the President (Manufacturers and Private Sector)
The implementation Committee shall meet monthly to consider processed applications and make recommendations to the Honourable Minister of Finance for approval, and subsequent issuance of NDCC by NEPC.
- Inter-Ministerial Committee:
There shall be an inter-ministerial Committee to review the activities of EEG Scheme. The Committee shall meet twice a year. Membership includes all members of the Implementation Committee and representatives of the Ministry of Agriculture, Trade Malpractice Committee and Economic and Financial Crime Commission (EFCC)
- Administration of EEG:
The EEG Scheme shall be domiciled in NEPC and administered in conjunction with the Implementation Committee. The list of applications to whom NDCC have been issued shall be forwarded to the Federal Ministries of Finance and Commerce monthly.
- Outstanding Claims:
All outstanding claims in respect of transactions between the suspension of the scheme and its subsequent lifting will be processed under the old EEG Scheme Rate (i.e. exports made with Bill of lading dated on or before 31st December, 2004).
- Violation of Guidelines:
Any violation of these guidelines by any claimants shall be handled by the Presidential Committee on Trade Malpractices and the Economic and Financial Crimes Commission in conjunction with members of the Implementation Committee.
- Effective Date:
These guidelines take effect from 1st January, 2005
NOTE:
EXPORT CERTIFICATE is required on each consignment for all categories of export whether or not an exporter is eligible for the Export Expansion Grant. The certificate is obtainable from NEPC offices throughout the federation
FREE OF CHARGE (upon the submission of the pre-shipment documents)
Application processing fee is hereby abolished
Double dipping into government industrial incentives will not be allowed. (i.e beneficiaries of EEG are prohibited from enjoying other industrial incentives e.g. Manufacturers Export In-Bond Scheme)
Export Processing Zones & Export Processing Factories : Oil & Gas Free Zone
The Free Port System
A Free Port is an enclosed area near to, or forming part of, a seaport or airport, in which imported goods can be stored without payment of customs duty or taxes. These are only paid if the goods are delivered from the Free Port for consumption in the country in which the Free Port is situated.
If the good are exported from the free port to another country, no Customs duty or taxes are payable. This avoids the onerous Customs legislation covering bonded warehouses and the procedures for claiming drawback or refunds of duty previously paid.Free Ports enable exporters to build up buffer stocks at the port or airport of loading, thus avoiding the need to use their own warehousing and the double handling involved.It is important to note at this stage, that legislation governing the operation of the Free Ports specifically excludes assembly and processes of manufacture, Permissible operations are limited to unpacking/repacking, sorting, grading, sampling and labeling etc., processes which do not alter the essential nature or state of the imported article.
LIST OF NIGERIAN EXPORT PROMOTION COUNCIL
ZONAL OFFICES NATIONWIDE
HEADQUARTERS
Nigeria export promotion Council40, Blantye Street Wuse II P.M.B, 133 Garki, Abuja Tel:234-952230980
ENUGU ZONAL OFFICE
NICON House 2nd floor S/14 Caanedra drive, Independent layout,P.M.B. 1611, Enugu, Tel: 042- 457857, 452344
BENIN ZONAL OFFICE
Edo state secretarial building, 6th floor,Sapele road, P.M.B.1160, Benin City, Edo state.Tel: 8023141575,090-417394
GUSAU ZONAL OFFICE:
Danyadado Shikafi House No.7 Sani Abacha Way, Gusau, ZamfaraState.
Tel: 063-203075,203071
OWERRI ZONAL OFFICE:
State Secretariat Complex, Orlu road, owerri, Imo state.Tel: 087-654321, 08033431261
PORT-HARCOURT ZONAL OFFICE
8th floor, federal secretariat, PMB 5163,PH, Rivers state. Tel: 084-233826,084- 330620, 080641064876
LAGOS ZONE Nigeria export promotion Council
Headquaters Annex 13\15 ladipo Oluwole Street Apapa, lagosTel: 01- 5803320, 01-8948670
JOS ZONE Nigeria export promotion Council 14, langtang Street, Jos Plateau StateTel: 073- 455893, 073-459763
AKURE ZONE Nigeria export promotion Council. Ondo State Property and Development Corporation Opposite federal school of Agriculture, Ijapo Estate, Akure, Ondo State.
Tel:034-216548, 034-40238
KANO ZONE Nigeria export promotion Council
16, New Court Road Off Zoo Road, Gyadi-gyadi Kano
BENIN ZONAL OFFICE: Nigerian Export Promotion Council, Export house, Block Ondo state housing corporation, Ijapo estate, Ado-Ekiti road, Edo state secretarial building, 6th floor, Sapele road, P.M.B. 1160, Benin City, Edo state.Tel: 08023141575, 090-417394
GUSAU ZONAL OFFICE:
Danyadado Shikafi House No. 7 Sani Abacha Way, Gusau, Zamfara State.Tel: 063-203075, 35203071
ABA ZONE Nigeria export promotion Council
Aba, Abia State. Tel: 082-221204
MINNA ZONAL OFFICE
Niger State Supply, Company Complex, Sherilson Super Store 3, Casia Avenue, GRA, Mohammed Mu’asu road, Minna, Niger State. Tel: 066-221585, 066-224901
MAIDUGURI ZONAL OFFICE
Bama road, PMB 1089, Maiduguri, Tel: 076-234712
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