Post by Ismail AbdulAzeez on Jan 16, 2013 3:20:35 GMT -5
EXCEPT the federal government addresses the issues of delay in accessing the Export Expansion Grant (EEG), as well as place a ban on the exportation of raw cocoa beans through an effective protectionist policy, the cocoa sector may end up like other moribund sectors the sector operators have warned.
Specifically, the operators, under the aegis of Cocoa Processors Association of Nigeria (COPAN), decried the unbriddled exportation of raw cocoa beans, an action, which the body described as killing the sector, while rewarding sole exporters of the product who have no investment in the country.
Addressing journalists in Lagos, Thursday, the Chairman of the association, Dimeji Owofemi noted that value addition to raw cocoa is decreasing as it is being poorly rewarded and unprotected against the massive export of raw cocoa beans materials, while the processed products are also heavily taxed by the same European countries that are charging no tax on raw cocoa beans in an effort to discourage value addition in Nigeria, as the country is said not to be a member of the Economic Partnership Agreement(EPA) group.
He noted that out of the cocoa processing companies in the country, only 10 are struggling to remain in production.
He identified the companies as Ile-Oluji Cocoa Processing company, Tulip Cocoa Processing limited, Stanmark Cocoa Processing limited, Coop Cocoa products limited, FTN Cocoa Processors Plc, ALFA System Cocoa Limited, Plantation Industries Limited, Cocoa Industries Limited, Ede Cocoa Products Limited and Multi-Trex Integrated Foods Plc.
According to Owofemi, cocoa processors, who have invested heavily in the country, pay an average of 30 per cent duty, whereas those who export the raw cocoa beans completely knocked down form pay only 10 per cent duty.
“Lack of electricity is a big challenge to us. We run our machines on generators except during skeletal operations. Also, Export Trade Liberalisation Scheme (ETLS)-earned export grants are not acceptable for settlement of customs duty. We also have the problem of low patronage of made-in-Nigeria goods by both the Federal and state governments.
“The Federal Government needs to discourage the export of raw cocoa beans to protect Nigerian value addition and job creation instead of enhancing the industrialisation of Europe who are again imposing tax of up to six per cent on our value added products and zero duty on our raw cocoa, therefore helping them to keep their own citizen in gainful and sustainable industrial employment.
“To save our factories, we seek government’s intervention through an imposition of a heavy tax on export of all raw commodities export”, he added.
Also, one of the association’s members, Akin Olusuyi, stated that despite the production capacity of the sector, there is an under-utilisation of made-in-Nigeria products.
“Aside getting a warehouse, an exporter does not need any form of investment in the country but processing companies employ and add value to the nation’s economy. Government needs to encourage local firms.”
“To reduce the obvious pressure on Customs, the federal government may need to consider the expansion of utilisation of the EEG certificate to include, but not limited to payment of Companies Income Tax, Value Added Tax, withholding Tax, Value Instrument for foreign exchange payment among others”, he added.
Furthermore, Simon Conway Jarrett noted that if government’s protectionist policies are reviewed, it would aid capacity of the sector.
Source: www.ngrguardiannews.com/index.php?option=com_content&view=article&id=110084:focus-more-on-value-addition-cocoa-processors-tell-govt-&catid=31:business&Itemid=562
Specifically, the operators, under the aegis of Cocoa Processors Association of Nigeria (COPAN), decried the unbriddled exportation of raw cocoa beans, an action, which the body described as killing the sector, while rewarding sole exporters of the product who have no investment in the country.
Addressing journalists in Lagos, Thursday, the Chairman of the association, Dimeji Owofemi noted that value addition to raw cocoa is decreasing as it is being poorly rewarded and unprotected against the massive export of raw cocoa beans materials, while the processed products are also heavily taxed by the same European countries that are charging no tax on raw cocoa beans in an effort to discourage value addition in Nigeria, as the country is said not to be a member of the Economic Partnership Agreement(EPA) group.
He noted that out of the cocoa processing companies in the country, only 10 are struggling to remain in production.
He identified the companies as Ile-Oluji Cocoa Processing company, Tulip Cocoa Processing limited, Stanmark Cocoa Processing limited, Coop Cocoa products limited, FTN Cocoa Processors Plc, ALFA System Cocoa Limited, Plantation Industries Limited, Cocoa Industries Limited, Ede Cocoa Products Limited and Multi-Trex Integrated Foods Plc.
According to Owofemi, cocoa processors, who have invested heavily in the country, pay an average of 30 per cent duty, whereas those who export the raw cocoa beans completely knocked down form pay only 10 per cent duty.
“Lack of electricity is a big challenge to us. We run our machines on generators except during skeletal operations. Also, Export Trade Liberalisation Scheme (ETLS)-earned export grants are not acceptable for settlement of customs duty. We also have the problem of low patronage of made-in-Nigeria goods by both the Federal and state governments.
“The Federal Government needs to discourage the export of raw cocoa beans to protect Nigerian value addition and job creation instead of enhancing the industrialisation of Europe who are again imposing tax of up to six per cent on our value added products and zero duty on our raw cocoa, therefore helping them to keep their own citizen in gainful and sustainable industrial employment.
“To save our factories, we seek government’s intervention through an imposition of a heavy tax on export of all raw commodities export”, he added.
Also, one of the association’s members, Akin Olusuyi, stated that despite the production capacity of the sector, there is an under-utilisation of made-in-Nigeria products.
“Aside getting a warehouse, an exporter does not need any form of investment in the country but processing companies employ and add value to the nation’s economy. Government needs to encourage local firms.”
“To reduce the obvious pressure on Customs, the federal government may need to consider the expansion of utilisation of the EEG certificate to include, but not limited to payment of Companies Income Tax, Value Added Tax, withholding Tax, Value Instrument for foreign exchange payment among others”, he added.
Furthermore, Simon Conway Jarrett noted that if government’s protectionist policies are reviewed, it would aid capacity of the sector.
Source: www.ngrguardiannews.com/index.php?option=com_content&view=article&id=110084:focus-more-on-value-addition-cocoa-processors-tell-govt-&catid=31:business&Itemid=562
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