Free Trade Zones

Counting the gains from the free zone concession

By Martins Odeh, News Agency of Nigeria (NAN)

The African Continental Free Trade Area (AfCFTA) has enabled all countries on the continent to diversify their trade basins.

Many countries have done this by strengthening their Free Trade Areas (FTAs) and for now, Free Trade Areas are springing up all over Africa.

Stakeholders say Nigeria should be concerned about competition from Egypt, South Africa, Kenya, Benin Republic, Ghana and Togo, where huge investments have been committed for the development of free trade areas.

Undoubtedly, the recent decision by the Nigeria Export Processing Zones Authority (NEPZA) to concede the Calabar and Kano Free Zones remains the government’s best economic approach to accelerating Nigeria’s industrialization agenda.

The main purpose of a free trade area is to remove from a seaport, airport or border barriers to trade caused by high tariffs and complex customs regulations.

Among the advantages of the system are the faster turnover of ships and aircraft thanks to the reduction of customs examination formalities and also the possibility of manufacturing, refinishing and storing goods freely.

A roadshow was recently held in Lagos on the concession project for the two public export processing zones.

Prof Adesoji Adesugba, Managing Director of NEPZA, said the planned handshake with future concessionaires would have a positive impact on the operation of the 30-year-old public facilities for global competition.

“Both areas are highly viable for many reasons including their vital locations, easy access to raw materials, seaports, airports, external infrastructure, labor and most importantly, the noisy nature of the two commercial cities.

“The Authority is therefore available to support and assist the new owners, in order to quickly overcome the challenges that may arise from taking over this type of business.

“I want to assure the private sector and in particular the companies that are about to submit their bids, to consider themselves lucky because of the large return on investment required that the facilities will provide,” he said.

Adesugba added that the program provides full tax exemption from all federal, state and local taxes, duties, duties and levies.

He said duty-free import of capital goods, consumer goods, machinery, equipment and furniture was guaranteed, adding that the scheme also allowed 100% foreign ownership of investments.

The Director General of NEPZA said that duties on exports to the customs territory were calculated on the value of the raw materials originally imported and not on the value of the finished products.

He added that the scheme offered the opportunity to export items on Nigeria’s import ban list, provided it could be proven that at least 35 percent of value had been added to promote the local content.

“The regime offers authorization to sell 100% of manufactured, assembled or imported products on the domestic market and guarantees 100% repatriation of capital and profits.

“It was imperative that the private sector now take advantage of these incentives as the program allows them to take advantage of the AfCFTA framework to freely access the huge market on the continent,” he said.

Otunba Adeniyi Adebayo, Minister of Industry, Trade and Investment, said the relentless efforts of the National Council on Privatization had made the process leading to the concession of the two areas smooth so far.

The minister said the decision to privatize them depended on the federal government’s willingness to create world-class free zones that the country could use to solve some of its economic problems.

“The government’s position to allow a transparent process that would bring out manly concessionaires, with the capacity, expertise and finances to convert the zones into a national economic asset, capable of generating jobs for the burgeoning youth and investment foreign direct (FDI) is the highest.”

Mr. Alex Okoh, Chief Executive of the Bureau of Public Enterprises (BPE), said the concession model to be used would be one of “build, rehabilitate, operate and hand over” over a period.

He added that the Lagos roadshow was part of the process leading to the final concession of the two facilities by December.

Ahead of the road show, Adesugba had reiterated NEPZA’s commitment to fulfilling its mandate by providing a wider trade corridor for investors to access the country’s free trade zones.

He spoke when members of the authority’s staff union staged a peaceful protest in support of his efforts in transforming NEPZA.

Adesugba, who underscored the need to explore the benefits offered by free trade zones to develop Nigeria’s economy, said it was essential given the need to revolutionize the economy.

He said the revival and optimal use of free trade zones would lead to the necessary economic revolution in the country.

According to him, free trade areas have revolutionized economies around the world and we must provide them with the necessary support.

Free zones in the axis of Lagos; you should go to Kano and you will see the infrastructure of the city and the free zone will metamorphose into something else shortly.

“We are going to revamp Calabar, all the dead factories there and we are going to push new investment and new capital into Calabar.

“The emerging new areas are the one thing that will galvanize Nigeria in a way we have never seen before in terms of employment, technology transfer and capital inflow,” he said. declared.

He said exploring free trade areas would also position Nigeria better for the benefits offered by the African continental free trade regime.

“It is important to understand that Nigeria is going to have some serious competition.

“Free zones are opening up in Benin, Togo, Ghana and there is a huge one being built in Egypt, all aimed at African markets and Nigeria owes a substantial share of that market.

“And if we don’t pull ourselves together, our unemployment will get worse.

“So we have to take advantage of what’s happening now,” he said.

Even the Business Facilitation Bill, approved by the Federal Executive Council, was designed to stimulate the economy.

Dr. Jumoke Oduwole, Special Advisor to the President on Ease of Doing Business, said the approval was in line with the Federal Government’s commitment to improve the business environment in Nigeria through legislative interventions.

She said the Omnibus Bill seeks to amend specific laws relating to the ease of doing business and incorporate these amendments into a single piece of legislation to act as a catalyst for legislative reform of the Nigerian business climate.

Oduwole said the provisions of the NEPZA Act and the CAMA have been reconciled to recognize the exemption of NEPZA-licensed free zone companies from company registration.

“With the amendment to the Export (Prohibition) Act, the Minister of Finance, Budget and National Planning will now have clear powers to recommend goods that should be restricted for export.

“This will encourage flexibility in terms of the products banned and the scope of the ban, allowing them to align with economic realities at all times,” she said.

With over approximately 42 active zones and approximately 500 businesses in the zones, the concession will ultimately boost NEPZA’s fulfillment of its mandate set out in the NEPZA Act 63 of 1992.

With proactive programs supported like concessioning, cumulative investment in 30 years estimated at around $20 billion, according to Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo, only 25,000 jobs generated compared to the projected capacity of 300,000 direct jobs would be exceeded. (NAN Features)

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