During our discussions at a trade facilitation and investment meeting organised by an industry chamber recently, we had good conversations on the subject with a few colleagues. Based on my experience, analysis and interactions with the leadership of several special economic, free zones and industrial parks over the years, am sharing my perspective for further conversation:
|South African Minister of Trade & Industry, Rob Davies (Photo: Business day)|
|Chief Executive Officer GFZA, Mr Michael Baafi (Photo: Business Ghana)|
Culled from The Independent (Kampala)
|Cross section of participants at the interactive forum|
The Minister indicated that government was committed to creating an environment where Free Zone enterprises could thrive, adding that challenges that derailed the efforts of businesses would be addressed.
the stabilization of its economy through blends of conventional and
resources which include abundant presence of solid minerals and crude oil
deposits. However, the decades of over dependence on the downstream sector has
offered the country what appears to be “blessings and curses’’.
wealth that had accrued to this acclaimed African largest economy and `curses’
which remain the negativism and pitfalls that plagued the nation over the
scramble for the exploration of crude oil and natural gas by an infinitesimal segment
of the population called “the ruling class’’.
indices have continually shown down trends owing largely to deliberate
abandonment of the non-oil sector. Albeit, successive governments had paid lip
service to the development of the non-sector, but perhaps always retard due to
the long stretch of investment that required to be made before dividends.
human activities that continue to sustain the development of the world.
more lucrative and expansive mode that transcends both land and coastal borders
wished to take advantage of the economic boom and boost derivable from export
of goods and services but may have failed to rip sufficiently as a result of
incoherent trade policies and strategies.
zone model, the Federal Government of Nigeria in it official gazette published
the Nigerian Export Processing Zones Act of 1992.
regulations and operational guidelines for Free Zones in the country.
some 26 free trade zones in the country.
zone as described by several experts is a demarcated geographic area of a
country’s national boundaries where the rules of business are different from
those that obtain in the normal country’s business environment.
as cited by Chris Ndibe, Executive Secretary of Africa Free Zone Association(AFTZA)
in his book titled “The Danger of Neglecting Free Trade Zones Scheme in
Nigeria says the zone’s differential rules principally deal with investment
conditions, international trade and customs.
says these rules also handle issues around taxation and the regulatory
environment, whereby the zone is given a business environment that is intended
to be more liberal from a policy perspective.
delving into some of the variables that inhibit the progress of free trade zone
in Nigeria, it is imperative to state the basic objective of establishing the
zone which includes attracting Foreign Direct Investment (FDI) as well as
create jobs and empowerment opportunities.
at also serving as “pressure value’’ to alleviate large-scale employment,
stimulate regional development and technological transfer as well as create
backward linkages among others.
be said that Nigeria has leveraged the numerous opportunities provided by this alternative
trade model to improve on its Gross Domestic Product (GDP) typified of
“Shenzhen Miracle’’, a fishing village which got transformed into a
cosmopolitan city of 14 million as a result of successful administration of its
40 years, countries all over the world, particularly developing nations, have
increasingly recognized the benefit economic liberalization and greater private
sector participation in the economy could bring about.
even clearer when the limitation and weakness of import substitutions as a
strategy for economic development are taken into account. Many countries and
businesses are today chasing and struggling for limited FDI.
of this impelled the Federal Government of Nigeria to take far-reaching steps
to improve the environment for investment and boost the development of the
non-oil sectors of the economy.
Nigerian government commissioned the United Nations Industrial Development
Organisation (UNIDO) under the auspices of the United Nations Development
Programme (UNDP) to conduct a feasibility study of the establishment of Export
7, 1991, the then military president, General Ibrahim Babaginda, laid the
foundation stone of the premier export processing zones in Calabar, Cross River
State on 152 hectares of land.
viewed as a landmark, a bold step by Nigeria towards improving the business
environment. Decree 34 of 1991 which initially gave legal backing to EPZ in
Nigeria was replaced with Decree 63 of 1992.
Export Processing Zone did not however become operational until its official
commissioning in 2001 by President Olusegun Obasanjo, when it was changed to
Free Trade Zone with a lager scope of activities than the original traditional
Export Processing Zone.
operations of export processing zones in the country has indeed liberalized the
sector thereby giving rooms for more private operations and public private
& Resort in Cross River State, an initiative of public and private
partnership set up in 2004 standing on 265 hectares was viewed as the recipe
trade zones to stabilize the shaky sector but that was soon to be eroded.
Island International Free Zone Lagos privately managed by Niger dock
Plc. Not much is happening in the trade hub that specializes in
Steel Fabrication, Oil & Gas, Sea Port
respite being the first purely privately owned free trade zone in Nigeria,
spreading over 805 hectares of land.
offer access to an enormous consumer market across West Africa.
the Lagos Free Trade Zone was designed to serve as an integrated hub with
active road, rail and sea links, which can open up the investment, business and
tourism potential of Nigeria to the world.
industrial zones, well-laid plans for efficient operations and established
connectivity to regional and international routes, the Lagos Free Trade Zone
appears to be the future destination for international businesses in the
experts have underscored the importance of free trade zones, according to them,
the effective and efficient management of the existing zone will serve as the
lead to the country’s effort towards the diversification of the economy.
Economist, said the country must expedite action in revamping all the free
trade zones, adding that that remained the most functional approach to
expanding the frontier of the country’s economy.
the population of teeming job seekers that can be engaged in these zones?
governments not considered investing in free trade zones. In fact there lies
the hope of the nation because it makes trading with other nations easier’’, he
a retired National Port Authority Staff, said the country was missing out of
the gains embedded in free trade zone operations, adding that developed nations
had built strong Gross Domestic Products (GDP) from free trade zones
the above contributors, Mr Olowokere Adedeji, another Economist said a
functional free trade zones policy was the antidote to the country’s present economy
present handling of the sector was shoddy, adding that the issues around
insecurity in some of the exiting zones must be addressed.
government is fully aware of the present hiccups around the sector as aptly
captured by the Director-General of the Nigeria Export Processing Zones
Authority (NEPZA), Mr Emmanuel Jime when the Management of the Nigeria Customs
Service paid him a courtesy visit on August 2017.
technical committee to harmonise their operations at Free Trade Zones across
up by the two agencies to address concerns raised by the NEPZA in relation to
the operations of customs officers in licensed free trade zones.
concerns on customs officers lacked of knowledge on the operations of the free
zones and called for inclusion of free trade zones in the curriculum for their
officers dealt directly with investors in the free zones instead of going
through the NEPZA, which was the agency responsible for investment facilitation
into licensed free zones in the country.
Comptroller General of Customs, retired Colonel Hameed Ibrahim Ali, said
customs officers in Nigeria were usually caught in-between its mandates for
trade facilitation as well as ensuring security and the wellbeing of Nigerians.
conversions, it is incontrovertibly clear that a lot needs to be done to
reposition the operation of free trade zones in Nigeria.
has pointed to the fact the existing provisions of the Free Trade Zone Law
requires a review for optimal performance.
out of place if government adequately provides the right infrastructure needed
to drive operations in the zones as the present states of most of the zones
nature of the zones, the authority must heighten efforts to ward off attempts
by dubious operators and investors from converting the zones into smuggling
government must muster political will to implement the recommendations of the
2005 Presidential Committee on the operation of Free Trade Zones Scheme in
see that the good and impressive recommendations made by the committee were
never addressed by Obasanjo who set it up or by subsequent administrations.
recommendations was that operations of the Free Zone Scheme should be closely
linked to national objectives for industrial development.
scheme should have, as its target investors, industries with potential to add
real technological value to the economy while encouraging export activities.
Executive Secretary of Africa Free Zones Association Mr Chris Ndibe said the
Association is geared toward assisting the over 600 Free Zones in the continent
to realise their optimal potential with its numerous programmes which it plans
to execute fully this year and beyond.
said this when the Chief Executive Officer of Ghana Free Zone Board, Mr Michael
Okyere Baafi, Visited him in his office in Abuja recently Mr Baafi visited AFZA
office in company of two staff, Mr Ziblim Alhassan Betintiche and one other.
|Left to Right: Chidi Nzerem Technical Adviser AFZA, Michael Baafi CEO GFZB and Chief Chris Ndibe Exec Sec AFZA.|
Baafi who also visited the Nigeria Export Processing Zones Authority said that
the purpose of their visit to Nigeria was to use the opportunity to meet with
stakeholders in Free Zone Scheme to discuss areas of common interest and how
they can collaborate to develop synergy that can move the Free Zone Scheme in
the continent forward.
seriously affecting the development of the scheme in Africa. “R&D would
have been providing the knowledge base of progressing the scheme with valid
information on value chain among Zones of the continent; by exposing and
creating new markets for Free Zones products and
Secretary of AFZA who was in company of AFZA Technical Adviser, Mr Chidi
Nzerem, said that AFZA is set out to lead member Zones to achieving Free Zones
of the future.
rolled out the programme the Association has for its members which includes
building databank, R&D reports, capacity building which will lead to a
sustainable and prosperous future for the zones.
required from member zones/countries is cooperation to consolidate all the
support services relating to the growth and development of the scheme in
Africa. “Working collectively as a body will be more beneficial to member zones
and will facilitate their voice to African Union”. Mr Ndibe reiterated that
AFZA is ever ready to assist member zones and countries searching n sourcing Resource
Persons for training and development policy framework.
commended President Mohammadu Buhari in revisiting the development of
Continental Free Trade Area issue at the recently concluded AU Summit but added
that incorporating Free Zone Scheme in CFTA discussion will give faster result.
“This is what he AU Department of Trade and industry should assist in doing, he
commended the robust website of GFZB and pleaded with the CEO to consider
hosting the 2018 AFZA convention in Acra-Ghana which he promised tabling before
his Board for consideration.
a new strategic partnership beginning with a Memorandum of Understanding (MoU)
between the Nigeria Export Processing Zones Authority (NEPZA) and the Ghana
Free Trade Board (GFTB) as a way of strengthening economic cooperation between
the two countries. Managing Director, NEPZA, Mr Emmanuel Jime, dropped the hint
at the weekend when he played host to the Chief Executive Officer (CEO) of
GFTB, Mr. Michael Okyere Baafi, who led a three-man business delegation on a
working visit to the NEPZA Headquarters in Abuja.
|Ghana Free Zone Board Office Complex (Photo: Pulse)|
Jime expressed readiness to partner with his Ghanaian counterpart in boosting
trade and economic growth within the subregion, saying that such collaborations
were part of the vision of the founding-fathers of the Economic Community of
West African States ( ECOWAS) when the regional body was established about four
He explained that although NEPZA was “initially conceptualized as an Export
Processing Zone (EPZ), it has today been saddled with the mandate of anchoring
Nigeria’s industrialization in response to evolving economic development
strategies and dynamics in globalisation. According to a statement issued
yesterday by NEPZA’s spokesman, Simon Imobo-Tswam, the Ghanaian delegation was
in Nigeria to seek areas of cooperation with NEPZA on the running of a free
trade zone. Leader of the delegation, Baafi expressed confidence in Nigeria’s
capacity to provide leadership for the West African sub-region and urged NEPZA
to lead the way. His words: “We are here to explore areas of cooperation and
partnership. But we believe Nigeria is a senior brother in business, population
etc. So, it is an opportunity for Nigeria to take the lead and I can tell you
that Ghana is prepared to follow.