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Special Economic Zones, Free Zones and Industrial Parks- the landscape is changing.

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By Subhasis Ghosh, (Managing Partner, Founder, Apex Group)

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: 

What are SEZs, EPZs, Free Zones? 
Wikipedia defines these as an area, where the business and trade laws are different from the rest of the country. While countries define special economic zones formally in their legislations, these zones essentially have geographically separated-fenced area and customs, tax and other benefits for units located in the area, single management or administration, streamlined procedures etc. 
Who sets these up and why? 
Special Economic Zones or Export Processing Zones and other such areas are set up by governments to increase trade, investments and create jobs etc. Then developers, co-developers, unit holders and other stakeholders contribute to their success. 
Whereas ports are gateways to/ from the hinterland and, focus on enabling cargo and passengers to move in and out as efficiently as possible, these zones are focussed on cargo generation and aggregation-disaggregation. Hence, the approach towards their development is similar and yet complimentary. 
Various models- 
While there are several models including Free Trade & Warehousing Zones (FTWZs), Export Processing Zones ( EPZs), Free Port & Special Economic Zone ( SEZ) and Coastal Economic Zones ( CEZs), for better understanding one could group these together as 
·        The traditional model, focusing on manufacturing and storage largely for export eg FTWZs, EPZ etc 
·        The relatively recent and larger zones, that include manufacturing, logistics , commercial and residential activities eg SEZs, CEZs etc 
The above groups are nonexclusive and FTWZs could be and, often are part of SEZs. 
Industrial parks focus on manufacturing, may have incentives for investors and may or, may not be part of SEZs, which focus on exports and imports. 

Some learnings from China- Continued growth, moving inland… 
From my visits to several Industrial Parks and SEZs including Shuzou Industrial Park-set up in partnership with the government of Singapore, Lingang Industrial Park near Shanghai, Yangshan and Shanghai ports and Shenzhen SEZ , including one of its 6 FTWZs-Futian Free Trade Zone, the take away(s) include active government support; experimenting different models; ensuring competition between zones and gradually upgrading technology and providing autonomy etc. 
With China’s investment led growth policies, including in SEZs, China itself significantly benefitted from the success of special economic zones and industrial clusters in terms of increase in FDI, exports, job creation and their contribution to the GDP. 
With China’s manufacturing moving inland, expect new zones to continue to develop, as the existing ones transition to more technology assisted manufacturing of high-tech products and, the consumption story picks up. 
The India story- the best is yet to come… 
While SEZs have been an important element of India’s commercial policy, failed implementation of the same is often cited as a county case study. The learning(s) include, relationship with the domestic trading area ( DTAs) for job work and sales, imposition of minimum alternate tax ( MAT) and Income Tax, leading to lack of investor confidence, the state (local) governments not supporting this scheme, which is perceived as a central ( federal) government initiative and non-availability of ECB and refinancing options etc. 
While the government of the day had perhaps imposed (backtracked on) some of the incentives, to avoid distortions in the local economy and the possibility of money laundering through under-invoicing of imports in these zones, the result is that huge parcels of land- estimated at over 25,000 hectares and capacity created are lying unutilised ..and has perhaps contributed to non-performing assets (NPAs). 
On the other hand, there are examples of successful EPZs and FTWZs in India, where there are multiple models including National Investment & Manufacturing Zones (NMIZ), Textile, Food Parks besides, SEZs, FTWZs, SEPZs etc. 
With India’s consumption story remaining intact, with the thrust of the present government towards manufacturing -Make in India, Ease of Doing Business and, the ability to manage change based on feedback, expect a revival in the SEZ story. 
Middle East – Similar objectives, different strategies… 
Middle Eastern Countries like UAE, have leveraged SEZs to drive their core economic policies. Dubai for example has over 20 Free Zones, with over 15000 companies and 200,000 jobs have been created. The success of Jafza has been spectacular and the model of the first free zone at Jebel Ali with a port plus, SEZ plus, airport has been replicated by other countries, even outside the region. 
One of the learnings from Dubai is the government’s strategy of seeking ecosystems that need facilitation to come together by clustering. We have the Dubai Media City, Dubai Finance Centre Dubai Design District, Dubai Internet City etc which create their own growth momentum and free zones promote clusters. 
Abu Dhabi has established its financial and media zones and is promoting the strategically located Abu Dhabi and Al Ain Industrial Cities, under Zones Corp. While Saudi Arabia’s Kind Abdullah Economic City continues to grow, it has recently publicised plans for the mega city NEOM as a part of the vision 2030. Other GCC countries including Oman, Qatar and Bahrain continue to pursue their economic zone initiatives aggressively. 
While SEZs in the middle east region continue to support diversification of the economy and promotion of non-oil revenues, strategic planning and implementation of these projects would differ based on the overall job creation objectives . Most businesses (unit holders) in SEZs seek to leverage cheap foreign labour, which could result in slower job creation for the host country. An alternate approach is to focus on attracting talent and visitors, some of whom set up competitive businesses, which then create jobs… 
So, what could make these successful? 
Am outlining a few key areas to facilitate conversations 
·        Clear purpose, vision, active government support and commitment, leading to location selection, strategic planning and cluster identification, based on local comparative advantages and linkages 
·        Quality infrastructure and multimodal connectivity to domestic and international trade lanes  and, innovative and thoughtful service design, implementation and monitoring 
·        Relationship with the ecosystem – continued stakeholder management including with the government-ministries, with trade, industry, workers and academia at home and abroad and, building brand awareness and recall. 
·        Ability to experiment and change based on feedback of what is working, from the global value chain or trade (FTAs) perspective, in the fast changing world 
Soft infrastructure, thus contributes significantly to the success of SEZs, FTWZs and Industrial Parks 
Implementation approaches 
We advise potential clients of Apex Group for full cycle business implementation, on the need to simultaneously and continuously work on the five areas below 
·        Validate and update strategy- stakeholder alignment, demand assessment, planning and cluster definition 
·        Customer acquisition and brand building including, marketing, sales and service 
·        Attracting the right talent as future competitiveness is about talent, training and engagement 
·        Operating efficiently-integrating USPs, building SOPs, leveraging technology 
·        Preparing for future with reviews, reporting and M&A, feeding into the strategy 
What is changing? 
·        Global trade continues to evolve in a way that may not support the traditional export oriented, free zone model. Hence building economic zones for export only may not the answer, these need to have local linkages in manufacturing as well as trade, based on comparative advantages of the region. 
·        Government commitment and willingness to learn and experiment with new Trade Facilitation Agreements and the ability to change strategies, based on evolving country comparative advantages, is becoming important. We can’t set up a zone , allocate land and consign it to govern itself for the next decades. There is however a need to strike a balance between oversight and autonomy. 
·        Building only clean-tech industries (Hi-tech, Edu-tech. Med-tech) may not work…some ones got meet the non-clean-tech demand as well. 
·        Soft infrastructure and ICT is as important to leverage the hard infrastructure 
With the 4 th industrial revolution changing us…, more businesses would perhaps like to operate in such zones with liberalised regulations, incentives , quality infrastructure including ICT, leveraging the local comparative advantages. 
I see a bright future for economic zones and industrial parks as this is where infrastructure development, consumption and trade are coming together and, new cities-perhaps smart cities are emerging and these would contribute to lift economies of countries.
What do you think are the other success factors for the success of Free Zones ? 

rodaviespl

How Incentives and SEZs are Creating Jobs and Uplifting Poor Areas, according to Rob Davies

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South African’s Trade and Industry Minister, Rob Davies highlighted the job-creating potential of his department’s incentive programme, and the importance of special economic zones, when he addressed MPs on Tuesday. 
He said the R18.8bn allocation in the budget over the next three years for the Department of Trade and Industry’s incentive programmes would enable the government to continue to provide financial support to the private sector. 
The focus would be on labour-intensive sectors that could create jobs for youth. 
Davies briefed Parliament’s trade and industry portfolio committee on the implications of President Cyril Ramaphosa’s state of the nation address (Sona) and the budget for the mandate of his department. 
South African Minister of Trade & Industry, Rob Davies (Photo: Business day)
In providing an overview of the incentive programme, Davies said that on average the department processed four applications and five claims a day. 
In 2016-17 the department spent R12.8bn in grants, the tax allowance scheme and loans — which was expected to generate R39.4bn in projected investment, R7.1bn in export revenue, and to create 23,351 new jobs and retain 38,192 existing jobs. 

Updating MPs on the progress of the black industrialist programme, Davies said to date 79 projects had been approved, with total grants disbursed by the department amounting to R1.9bn. This had facilitated R6.9bn in investments. 
The main economic sectors benefiting from the black industrialist programme grant were plastics and pharmaceuticals (R567m); agro-processing (R316m); metals (R279m); the green sector (R149m); and manufacturing and logistics (R116m). 
With regard to the automotive investment scheme, 88 projects were approved in 2016-17 to receive grants totalling R3.6bn, related to a projected investment value of R12.4bn. 
A total investment allowance of R3.9bn had been approved for 25 projects in 2016-17 under the Section 12i tax allowance incentive scheme with an associated projected investment of R14.3bn. 
Davies said the department’s manufacturing investment programme was achieving its objective of job creation. About R400m had been disbursed under the programme and 26,030 jobs had been supported. 
Davies noted that as Ramaphosa had announced, the government would organise an investment conference in the next three months, targeting both domestic and international investors. 
“The investment conference will stress the need to encourage investors from the continent to locate in SA. In addition we will encourage multinational corporations to invest their R&D (research and development) facilities in SA as we seek to make SA a knowledge and innovation centre,” Davies said. 
Davies said the R4.9bn allocated for industrial infrastructure projects over the next three years would be used in special economic zones (SEZs) and industrial hubs in order to expand economic opportunities in underdeveloped areas. 
“The SEZ programme is a critical instrument for accelerating industrialisation,” he said. 
“More importantly, the SEZ programme is a critical tool for attracting foreign direct investment, creating decent jobs, establishing new industrial centres as well as developing and improving infrastructure.” 
There are seven designated zones, namely in Saldanha Bay, Dube Trade Port, Coega, East London, Richards Bay, Maluti a Phofung in the Free State, and the recently added Musina in Limpopo.
In the coming year the department will finalise two more zones for designation, namely in Atlantis in the Western Cape and Nkomazi in Mpumalanga. 
Investments in SEZs benefit from a reduced corporate tax rate and the employment tax incentive. 
“The ‘package’ of support measures available to investors in SEZs is becoming comparable to that offered by our global competitors,” Davies said. 
“SA still has work to do to improve the efficiency of regulatory decision making but the investment offering is improving significantly.” 
Highlighting some of the achievements of the special economic zones, the minister noted that Chinese company Yangtze Optics Cable and its black economic empowerment partner, Mustek, was investing R150m in a modern optical fibre cable manufacturing plant at Dube Trade Port. 
Saldahna Bay had a pipeline of 34 investments worth R34bn and OR Tambo had attracted R260m in new investment covering horticulture and metal refining. 
 Culled from Business Day 
mobaafi

Ghana Free Zones Authority licenses 16 New Companies – Combined Investment Valued at $183m

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Chief Executive Officer GFZA, Mr Michael Baafi (Photo: Business Ghana)
The Ghana Free Zones Authority (GFZA) has granted licenses to 16 new companies with a combined investment value of $183 million to operate under the free zones programme.
They include Gold Coast Refinery, Juaben Oil Mills, Regency Salt Limited, Ramec Limited, Nurevas Food Ghana Limited and Karma Distillery Limited.
Others are Enviroplast Company Limited, Atlantic Life Services, Bassi International Limited and Melan Print and Packaging Limited. 
The Chief Executive Officer (CEO) of the GFZA, Mr Micheal Okyere Baafi, told the Daily Graphic in an interview fortnight that the licensing of the 16 companies was a novelty and underscored the government’s commitment to industrialise the economy. 
The companies, he said, would be expected to venture into value added businesses and adhere to the law binding their operations under the programme to sell only 30 per cent of their manufactured products locally and export the remaining 70 per cent. 

Mr Okyere-Baafi said that was to boost the local manufacturing industry and increase the country’s gains from the export market. 
“We have just added 16 companies to the programme and that is unprecedented. We hope to achieve a milestone within a year,” he said. 
Mr Baafi indicated that the 2018 strategy of the authority was to change the face of the GFZA by creating autonomous offices, enhancing the quality of service delivery and introducing speed with regard to licensing application processes, exemption of application processes, visa application and renewal processes, as well as vehicle registration processes. 
He said the GFZA would set up a new unit to focus on the oil sector by providing the needed expertise to companies in that sector to operate efficiently. 
“A free zone company can be located either in any of the export processing zones (EPZ) or anywhere in the country upon the approval of the GFZA. 
“In essence, the whole country is accessible to potential investors who have the opportunity to use the free zones as focal points to produce goods and services for foreign markets. 
“The programme is designed to promote the processing and manufacturing of goods through the establishment of EPZs, and encourage the development of commercial and service activities at sea and airport areas. 
Companies operating under the programme are entitled to both monetary and non-monetary incentives’’, he said. 
He further said the monetary incentives offered included 100 per cent exemption from the payment of direct and indirect duties and levies on all imports for production and exports from free zones. 
He said it also included 100 per cent exemption from the payment of income tax on profits for 10 years which would not exceed eight per cent thereafter. 
According to him, the incentive also includes total exemption from the payment of withholding taxes from dividends arising out of free zone investment. 
“With a focus of maximising the country’s benefit from the programme, some priority sectors have been identified by the GFZA for investments based on the comparative advantages of the country. 
“The priority sectors include agro food processing, cotton processing, textile manufacturing, ethnic beauty products, sea food processing and jewellery/handicraft production. 
“The rest are light industry/assembling plant, plastic products manufacturing, metal fabrication, ceramic tile manufacturing, and information and communication technology. 
Culled from Business Ghana 

Mpondwe Export Zone to Boost Trade Between Uganda and DR Congo

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The Democratic Republic of Congo is one of Uganda’s export
destinations ranking number three within the COMESA region. 
Uganda’s exports to
DR Congo are valued at USD177m and these are mainly construction materials like
lime and cement, iron and steel, cereals and fruits and vegetables. 
On the
other hand, Uganda imports little from DR Congo with the values standing at
USD2.5m and these are mainly essential oils, cosmetics and some iron and steel.
Most of the trade between Uganda and DR Congo is done at the three
major border points of Mpondwe in Kasese district, Bunagana in Kiroso district
and Goli in Nebbi district, with Mpondwe being the busiest border point in
terms of trade activities. 

Most of the trade is conducted by the cross border
traders who cross to and from Uganda taking and bringing back merchandise. 
However, most of these cross border traders are facing challenges including
poor market structures where they operate from at the borders, complicated
border crossing procedures, mistreatment from scrupulous individuals among
others.
In order to address the challenges faced by these cross border
traders, the Government of Uganda through the Ministry of Trade, Industry and
Cooperatives secured a loan to a tune of $14m.
The said loan is approximately shs.50.4bn
from the World Bank to implement the Great Lakes Trade Facilitation Project
(GTLF) aimed at facilitating cross border trade between Uganda and DR
Congo at the three borders of Mpondwe, Bunagana and Goli. 
The project aims at
increasing the capacity for commerce and reducing the costs faced by the cross
border traders.
Through the Great Lakes Trade Facilitation Project, the Ministry
of trade in collaboration with the Ministry of works and transport and the
border agencies will construct appropriate infrastructure that improves
conditions at borders.
 This increases capacity to trade together, put in place
measures that simplify border crossing procedures especially the customs
procedures and improve the standards of treatment of traders and officials.
With funds from the World Bank, Government has started
preparations for the construction of a One Stop Border Post (OSPB) and a Border
Export Zone/modern Border Market at Mpondwe to create a conducive environment
for the cross border traders.
The Minister of State for Cooperatives Hon. Fredrick Ngobi Gume, on March 2nd led a team of members of Parliament on the Tourism,
Trade and Industry Committee for a monitoring visit to the proposed
construction site for both the One Stop Border Post and Border Export Zone at
Mpondwe.
Minister Gume told MPs that Government has already secured 4.3
acres of URA land for the construction of the OSBP and is currently negotiating
with squatters for an extra 6.9 acres for construction the OSBP at Mpondwe. 
“We have done the boundary opening for the land and we are negotiating for
an extra 6.9 acres that goes up to the border line, to enable government have
full control of the Mpondwe border point”, explained Gume said.
The Minister also told MP’s that for the modern border market,
land has already been secured and the Ministry has called for proposals to
procure companies that will do the actual construction for both the OSBP and
the border market. 
The construction of the two structures will cost USD9.4m
with the actual construction expected to begin at the end of 2018.
The GTLF project coordinator and Principle commercial Officer in
the Ministry of trade Steven Kamukama says the OSBP project is concurrently
being implemented by DR Congo.
He also said the facility will house all government
agencies from Uganda and DR Congo under one roof to complete all entry and exit
formalities for both passengers and cargo. 
This will reduce the time of
clearance for cross border traders and other users. Kamukama says the same
infrastructure will be constructed in Bunagana and Goli, however these two are
still awaiting funding.
The Chairperson of the Parliamentary Committee on Tourism, Trade
and Industry Alex Ruhunda, however, cautioned the implementing agencies to
directly involve the local leaders and the traders in Mpondwe in the
implementation of the project.
With the completion of the project, the revenue collection at
the Mpondwe border is expected to increase. 
The officer in-charge of Uganda Revenue
Authority at the border Sabiiti Fred says URA been losing a lot of revenue due
to smuggling which is encouraged by the open border.
“Currently, we clear around 60 trucks everyday and we
collect an average of shs.250m per month, but with the construction of the OSBP
this revenue is expected to increase to shs.400m per month”, said Sabiiti.
In addition to the OSBP and modern border market, the Ministry
of trade has established a trade information desk at Mpondwe border to assist
cross border traders in doing business. The officer in charge of the desk
Muhindo Eri says on average they assist 15 traders in the areas of commodity
prices, guidance on taxation and clearance procedures.

Culled from The Independent (Kampala)

Gfzbe

Free Zone Enclaves To Be Established In All Regions In Ghana

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Ghana government is to establish free zone enclaves in all regions in the country as part of plans to industrialise the nation’s economy.
In addtion, a major infrastructural facelift project will soon begin at the free zones enclave in Tema.
It will include the re-building of broken-down walls, construction of police posts and new roads to enhance the operations of businesses within the enclave.
The deputy minister of Trade and Industry, Mr Carlos Ahenkorah disclosed this at an interactive forum with Chief Executive Officers (CEOs) of licensed free zone enterprises in the eastern, Greater Accra and Volta regions in the city of Accra, recently.
Cross section of participants at the interactive forum
Organised by the Ghana Free Zones Authority (GFZA), the forum was dubbed: “Revolving challenges for business growth”.
Mr Ahenkorah said as part of the one-region, one-free zone project, arrangement had already been made with the chiefs in the regions for a litigation-free land to be made available for the implementation of the programme.

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.

“That is why we are beginning the facelift initiatives at the Tema enclave where there will be good roads and formidable security posts to ensure that operations of Free Zone enterprises are not halted, he stated.
Mr Ahenkorah noted that more interventions would be rolled out to ensure that free zone enterprises received the needed support to expand their operations.
The Executive Secretary of Ghana Free Zone Authority (GFZA), Mr Michael Okyere Baafi, commended Free Zone enterprises for their various roles in the country’s industrialization agenda.
However, he raised issues with the way some of the enterprises submitted their mandatory quarterly documentation, saying a number of them used false information to deceive the board.
Mr Baafi said a fine of $ 55,000 would be slapped on any free zone enterprise that “attempts to use false information to deceive the Board”.

The Executive Secretary of African Free Zones Association, Chris Ndibe, who was at the event commended the effort of GFZA in organizing the stakeholders  meeting as this will reveal the problem areas in the operation of free zones in the country. “To get the best of a meeting of this nature, it should be made more than once”, he said

The Trajectory of Free Trade Zones utilizations in Nigeria

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By Martins Martins

For years, Nigeria has navigated seeking for
the stabilization of its economy through blends of conventional and
non-conventional approaches.

No doubt, the country is blessed with natural
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’’.

The `blessings’ , being years of leverages and
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’’.

Series of the country’s growth and economic
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.

Trade and Commerce remain one of age long
human activities that continue to sustain the development of the world.

It has gone from it primitive adaption to a
more lucrative and expansive mode that transcends both land and coastal borders
of countries.

Nigeria and most countries in Africa had
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.

Knowing the benefits inherent in free trade
zone model, the Federal Government of Nigeria in it official gazette published
the Nigerian Export Processing Zones Act of 1992.

The Act sets out the investment procedures,
regulations and operational guidelines for Free Zones in the country.

The Act has given rise to the establishment of
some 26 free trade zones in the country.

Free trade
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. 

Farol, 2011,
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.

He further
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.

Before
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.

It is aimed
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.

Can it then
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
trade zones?

In the last
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. 

This becomes
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.

Realization
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.

In 1989, the
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
Processing Zones.

On November
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.

It was
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.

The Calabar
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.

The amendment to the law guiding the
operations of export processing zones in the country has indeed liberalized the
sector thereby giving rooms for more private operations and public private
partnerships.

In the light of this, the Tinapa Free Zone
& 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.

Similar fate may have befallen the Snake
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

However, the Lagos Free Trade Zone appeared a
respite being the first purely privately owned free trade zone in Nigeria,
spreading over 805 hectares of land.

 The zone has several industrial zones and
offer access to an enormous consumer market across West Africa.

Initiated with the President’s approval in 2002,
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.

With numerous
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
region.

A cross section of
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.

Dr Ademola Alimi, an
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.

“Have you considered
the population of teeming job seekers that can be engaged in these zones?

“Why has successive
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
said.

Chief Donald Okereke,
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
activities.

Aligning himself with
the above contributors, Mr Olowokere Adedeji, another Economist said a
functional free trade zones policy was the antidote to the country’s present economy
woes.

In his opinion, the
present handling of the sector was shoddy, adding that the issues around
insecurity in some of the exiting zones must be addressed.

Perhaps, the
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.

In that visit, NEPZA and Customs announced the setting up a
technical committee to harmonise their operations at Free Trade Zones across
the country.

The committee was set
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.

 Jime, had raised
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
training.

Jime had said customs
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.

Responding, the
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.

From the above
conversions, it is incontrovertibly clear that a lot needs to be done to
reposition the operation of free trade zones in Nigeria.

The narratives so far
has pointed to the fact the existing provisions of the Free Trade Zone Law
requires a review for optimal performance.

It would be also not
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
remained appalling.

In view of the porous
nature of the zones, the authority must heighten efforts to ward off attempts
by dubious operators and investors from converting the zones into smuggling
empires.

Finally, the
government must muster political will to implement the recommendations of the
2005 Presidential Committee on the operation of Free Trade Zones Scheme in
Nigeria.

It was saddening to
see that the good and impressive recommendations made by the committee were
never addressed by Obasanjo who set it up or by subsequent administrations.

The highlight of the
recommendations was that operations of the Free Zone Scheme should be closely
linked to national objectives for industrial development.

Consequently, the
scheme should have, as its target investors, industries with potential to add
real technological value to the economy while encouraging export activities.

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Ghana Free Zone CEO Visit AFZA Office in Abuja

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The
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.
Ndibe
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.

Mr
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.
 He stated that lack of good Research and Development is
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
services.
The Executive
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. 
Chris Ndibe
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. 
He said that all that is
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.
Mr Ndibe also
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
said.
Mr Ndibe
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.
gfzbim

Nigeria, Ghana Partner On Free Trade Zones

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Nigeria and Ghana have resolved to forge
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
decades ago.


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.