The Lagos Free Zone offers top-tier infrastructure and strategic advantages for Nigerian market investors. By Tejaswi Avasarala
Nigeria, Africa’s largest country, is rapidly establishing itself as one of the most promising business locations globally. Nigeria’s promising economy boasts numerous sectors that are ripe for development and investment. In this article, we’ll delve into the burgeoning business opportunities in Nigeria and provide valuable insights on how to thrive in its dynamic business climate, whether you are an experienced trader, manufacturer, or investor looking to make a strategic entry. One interesting way new investors can access the best of the Nigerian market is through special economic zones, such as the Lagos Free Zone (LFZ). LFZ, which was established in 2012, is an 850-hectare state-of-the-art private free zone in Nigeria. Integrated with Nigeria’s deepest seaport, Lekki Port, LFZ is positioned as the premier investment destination in the region, attracting local and international investors with a deployed investment of USD 2.5 billion. Offering world-class infrastructure, facilities, and services, LFZ boasts a self-sustaining ecosystem for business operations, including grade-A warehouses, industrial factories, serviced apartments, and a comprehensive array of amenities. With its strategic location in the Lekki Industrial Corridor and a single-window clearance system, LFZ presents unparalleled ease of doing business, unlocking vast economic opportunities for foreign investors in Nigeria and West Africa.
The Board of Directors of Tolaram, one of Nigeria’s leading conglomerates, has appointed Adesuwa Ladoja as the Managing Director/Chief Executive Officer of the Lagos Free Zone (LFZ) Company, one of its subsidiaries.
In a statement issued by the Board of Directors to its stakeholders, the appointment is effective July 1, 2024.
Adesuwa Ladoja takes over from Dinesh Rathi, who has been moved to the position of Group Finance Director of Tolaram.
The Nigeria Export Process Zones of Authority (NEPZA) said that the Free Trade Zones only generated N11.1 billion between 2020 and 2023 as against the earlier N11.11 trillion erroneously captured in the Authority’s submission to the Senate Committee on Trade and Investment.
Dr Olufemi Ogunyemi, Managing Director of the Authority on Monday in Abuja described the initial quoted figure as a regrettable ` typographical mishap.’
Dr Ogunyemi, also the Chief Executive Officer of NEPZA, therefore, stated that the sum of N377.33 million was generated in 2020 while N3.11 billion accrued to the Federation Account in 2021 from the scheme.
According to him, the total remittances from the scheme in 2022 stood at N3.44 billion while an impressive N4.170 billion came through in 2023.
“The attention of the management has been brought to the news making around that the Authority remitted a whopping sum of N11.11 trillion to the Federation Account as at October 2023. This piece of information was a classical typograph error and it is regrettable.
“Let me emphatically state that the remittances from the Free Trade Zones from 2020 to 2023 stood at N11.1 billion only. We are however making good progress to take the scheme to that point where it can generate such huge revenue for the government.
“For instance, in 2023, the Nigeria Customs Service (NCS) generated ₦59.38 billion, and the Immigration Services received ₦828.7 million from the free trade zones while the Nigerian Ports Authority (NPA) garnered ₦8.738 billion from the sub-sector,’’ he said.
Dr Ogunyemi also explained that the Authority was gradually transforming the scheme to become the country’s sustainable economic gateways, adding that more efforts and support were needed to position the scheme for greater exploit.
“The Nigeria Export Processing Zones Authority (NEPZA) is the major driver of Government’s initiative to diversify the Nigerian economy. With attractive investment packages and a focus on economy-driven sectors, NEPZA provides investment opportunities in different sectors across the country.
“At the moment, the scheme focuses on three critical investment areas which included Manufacturing 45 per cent, Services 30 per cent, and Oil & Gas with 11 per cent active investment exploitation,’’ Dr Ogunyemi said.
The scheme currently has 53 Free Trade Zones habouring 580 enterprises with a cumulative USD30 billion.
The Authority collects 20 types of revenues ranging from 500,000 USD-Declaration fees, 60,000 USD Annually as Operation License (OPL) and 300 USD to 500 USD Registration fees in line with extant regulations on IGR.
There is also 100 USD to 300 USD Examination and Documentation fees per transaction, which occurs on a daily basis.
(right): H.E. Abdel Fattah al-Sissi – President of the Arab Republic of Egypt and Chairperson of the African Union and (left): Dr. Benedict Okey Oramah – Chairperson of Afreximbank launching the operational phase of the African Continental Free Trade Area at the African Union 2019 July Summit.
The 12th Extraordinary summit of the African Union which was held in Niamey on the 7th of July 2019 was a momentous occasion for Africa, as it saw the successful launching of the operational phase of the African Continental Free Trade Area (AfCFTA). The AfCFTA agreement was adopted and opened for signature on 21 March 2018 in Kigali and entered into force on 30 May 2019.
The launch ceremony included “a roll call of honour” during which the 27 countries that had ratified the instruments of the AfCFTA as at 7th July 2019 were announced, and the 28 countries which had signed but not yet ratified were also announced with only one member state, Eritrea, yet to sign. A commemorative plaque was unveiled to mark the occasion and the announcement of the selection of Ghana to host the AfCFTA secretariat was also made.
The launch of the operational phase was characterised by the adoption of five key instruments
The Rules of Origin: A regime governing the conditions under which a product or service can be traded duty free across the region
The Tariff concessions: It has been agreed that there should be 90% tariff liberalisation and the deadline is 1st July 2020. Over a 10 year period with a 5 year transition, there will be an additional 7 % for “sensitive products” that must be liberalised
The online mechanism on monitoring, reporting and elimination of non-tariff barriers, NTBs: NTBs are a great hindrance to intra African trade whether physical, like poor infrastructure, or administrative like the behaviour of customs officials. These are to be monitored with a view to ensuring they are eliminated.
The Pan-African payment and settlement system: To facilitate payments on time and in full, by ensuring that payments are made in local currency and at the end of the year there’ll be net settlements in foreign exchange. With the certainty of payments, there will be confidence in the system.
The African Trade Observatory: A trade information portal to address hindrances to trade in Africa due to lack of information about opportunities, trade statistics as well as information about exporters and importers in countries. The trade observatory will have all this information and other relevant data which will be provided by AU member states
The significance of the African Continental Free Trade Area The AfCFTA will be the largest free trade area since the formation of the World Trade Organisation, given Africa’s current population of 1.2 billion people, which is expected to grow to 2.5 billion by 2050. Some of its expected benefits include:
Increasing trade among African countries which currently ranges between 15-18%.
Stimulate production through the development of regional value chains, to ensure that manufacturing, agro processing and other activities across the continent are stimulated to supply the market.
Strengthen the capacities of African companies to access and supply world markets.
Strengthen African’s economic and commercial diplomacy.
[1/4]Prime Minister of Singapore Lee Hsien Loong and Prime Minister of Malaysia Anwar Ibrahim shake hands during a ceremony to commemorate the completion of the connecting span for the construction of the Johor Bahru – Singapore Rapid Transit System (RTS) link project which connects the marine viaduct… Purchase Licensing Rights
KUALA LUMPUR, Jan 11 (Reuters) – Malaysia and Singapore agreed on Thursday to jointly develop a special economic zone (SEZ) in the southern Malaysian state of Johor, aiming to attract investments and free up movement of goods and people.
The Southeast Asian neighbours will work towards a full-fledged pact, aiming to co-operate on renewable energy and smoothing procedures from business approvals to border clearance, they said in a joint statement.
“The zone presents an unprecedented opportunity,” said Malaysia’s Economy Minister Rafizi Ramli, adding that it would boost the cross-border flow of goods and people, strengthening business, and benefit the economies of both.
Rafizi and Singapore’s trade and industry minister signed the deal at a ceremony in Johor, in the presence of the leaders of both countries.
Singapore was Johor’s second-largest foreign investor from January to June 2022, and contributed about 70% of Johor’s total foreign direct investment in manufacturing, according to the statement.
According to employment reports recorded at the end of 1402 (Iranian solar year) in the National Employment Monitoring System, the executive body of the Sirjan Special Economic Zone was able to increase its employment by 100%. employment commitment, which is determined annually. by the province’s Jobs and Investment Task Force.
In line with the commitment of 350 people to attract labor and register in the national employment monitoring system by the provincial employment task force, the Sirjan Special Economic Zone managed to register 370 people in the national employment monitoring system, which played an important role in the total employment of the city of Sirjan.
It is worth mentioning that the Sirjan Special Economic Zone is the first special economic zone created by the private sector in the country, which was established in 1992 with the permission of the Cabinet of Ministers and, despite all the difficulties in the development path, it has managed to accommodate more than fifty active industrial units. May it lead to the creation of 3,000 direct jobs in total.
London, May 19, 2024 – In an exceptional celebration of excellence and recognition at the iconic House of Lords, SOHAR Port and Freezone has received the RoSPA’s Best New International Entry Award, and the RoSPA’s Gold Sector Award for Health and Safety performance for the period of January 2023 to December 2023 by Lord Bill Jordan, Life President of the Royal Society for the Prevention of Accidents (RoSPA).
RoSPA is a not-for-profit organization patroned by His Majesty King Charles III, King of the United Kingdom that has worked for more than 100 years to exchange life-enhancing skills and knowledge to reduce serious accidental injuries. The esteemed RoSPA Awards program is celebrating its 68th year as the UK’s largest and most impactful health and safety program. With almost 2,000 entries annually from over 50 countries, impacting over seven million employees, they offer a platform to spotlight an unwavering commitment to continuous improvement and excellence in health and safety.
Commenting on this achievement, Omar bin Mahmood Al Mahrizi, CEO of SOHAR Freezone and DCEO of SOHAR Port, said, “We are honored to receive the Gold Award for Health and Safety 2023 and the Best New International Entrant Award from RoSPA. This recognition reflects our team’s and tenants’ dedication and efforts to ensure a safe and healthy work environment. It strengthens our commitment to improving standards, enhancing safety culture, and developing best practices for all stakeholders. We are proud to be part of the international awards community, setting a standard for safety and occupational health excellence.”
Rebecca Hickman, CEO of the Royal Society for the Prevention of Accidents (RoSPA), expressed her delight in welcoming Sohar Port and Freezone to society. Hickman commended SOHAR Port and Freezone’s exceptional commitment to safety excellence and their efforts to promote a safety culture among the companies within the port and freezone.
In line with this achievement, SOHAR Port and Freezone has signed an MOU agreement with RoSPA to collaborate on occupational safety training and the exchange of expertise. This partnership aims to enhance safety standards and boost operational efficiency, establishing SOHAR Port and Freezone as a benchmark in this field.-Ends-
About SOHAR Port and FreezoneAs one of the world’s most rapidly growing integrated industrial and logistics projects, SOHAR Port and Freezone capitalizes on its strategic location to cement its status as a crucial logistics hub in the region and globally. A unique collaboration between the Port of Rotterdam and ASYAD Group marks it as a key mega-project in Oman, offering a range of services including logistics, petrochemicals, metals, and the region’s first dedicated agro-terminal. With 20 over years of operation, SOHAR is the main gateway for Oman’s import and export, contributing 2.1% to the nation’s GDP and creating almost 26,000 jobs. Committed to sustainable development and advanced technology, SOHAR is modernizing logistics infrastructure in line with the economic diversification goals of Oman’s 2040 Vision. For more information on SOHAR Port and Freezone, visit soharportandfreezone.com
From Dr. Akinwumi Adesina CON; President of the African Development Bank Group, to Ngozi Okonjo-Iweala GCON; Director General of the World Trade Organisation, to Hon. Dr. Doris UzokaAnite MD, CFA; Nigerian Minister of Industry, Trade, and Investment, to Sergio Pimenta; Regional Vice President for Africa at the International Finance Corporation, the message is clear: an industrial revolution is crucial for Nigeria’s overall transformation.
Our national focus on economic development has become imperative, and industrialisation is emerging as a compelling strategy for sustainable growth and inclusive fiscal prosperity.
This is reinforced by our country’s abundant endowment of a labour surplus, scarce raw materials, growing consumer markets, and an economy in dire need of diversification.
With industrialisation as the desired outcome, prominent among effective approaches is the establishment of Free Zones.
A Free Zone (FZ), also referred to as a Special Economic Zone (SEZ), Foreign or Free Trade Zone (FTZ), Enterprise Zone (EZ), Industrial Development Zone (IDZ), or Export Processing Zone (EPZ), is a geographically defined area offering differentiated legal and regulatory framework compared to the rest of the nation, specifically designed to enhance investment attractiveness. By addressing weaknesses in the broader business environment, FZs aim to compensate for potential risks and create a more conducive climate for foreign direct investment (FDI).
Policy goals of FZs include export promotion by providing a duty-free platform for calculated importation of raw materials and machinery, as well as tax breaks for the export of finished products. They also target import substitution by increasing domestic production to reduce attendant reliance, and job creation, through attraction of businesses that generate employment opportunities within the zone. In addition, FZs facilitate foreign direct investment to leverage capital and technology transfer.
The Nigerian Export Processing Zone Authority (NEPZA) lists permissible activities in FZs as construction and light manufacturing; solid minerals & metals; oil & gas; and agribusiness & agro-allied, covering various industries: from electronics to textile, to plastics, to cosmetics, pharmaceutical products, food processing, and more.
Building and maintaining the highest quality infrastructure within Free Zones demands substantial investment in logistics networks, operations and maintenance utilities, warehousing and distribution facilities, as well as communication technology. Businesses need a clear and predictable regulatory environment, accordingly, streamlined bureaucratic processes and consistent implementation of regulations are crucial. Perhaps the most pressing challenge lies in equipping its workforce with skillsets needed to thrive in these dynamic zones. Investing in technical and vocational education programs will be essential to ensure a talent pool that can meet the required demands.
The Nigeria Export Processing Zones Authority (NEPZA) has stated it will offer startups and foreign businesses operating in free trade zones tax breaks, customs duties waiver and other incentives as part of measures to stem the growing tide of foreign business exit in the country.
The Managing Director of NEPZA, Olufemi Ogunyemi told the News Agency of Nigeria (NAN) that it was supporting businesses within its free trade zones and enclaves.He said, “This initiative aims to reduce production costs and incentivise companies to maintain operations in Nigeria. We offer a range of incentives designed to attract and retain foreign direct investment.
“These incentives include customs duty waivers, tax breaks, and deferred payments to the government at the start-up phase of businesses,’’
Offer of innovative power solutionsHe further decried the exit of multinationals and closure of businesses across the country and stated that part of Authorities’ plan includes addressing concerns raised by these companies such as increased power cost by offering innovative solutions tailored to business needs.
He noted that in exchange for these business reliefs, companies would be mandated to train Nigerians sometimes to professional level through CSR activities which he described as ‘Community Social Regeneration’.
In his words, “We are witnessing an unfortunate trend where companies are relocating due to issues like foreign exchange access and power supply. To mitigate these challenges, NEPZA is actively involved in providing power generation solutions tailored to the needs of businesses operating within its zones.”
“Now, on the flip side, like I said, it’s a handshake, so we give, and then we take. Therefore, NEPZA requests from these foreign direct investors that they employ Nigerians. They train Nigerians on skilled, semi-skilled, even sometimes up to professional level. These are statutory requirements that are part of this handshake.”
The SEZ designation application is in its final stages. Post-SEZ designation the project will initiate Phase 1 (2023-2024) of the project which will be the SEZ construction and development.
JUNE 9, 2024
Economic zone targets western SADC for operation
The Special Economic Zone (SEZ) designation application is in its final stages. Post-SEZ designation the project will initiate Phase 1 (2023-2024) of the project which will be the SEZ construction and development.
The Namakwa Special Economic Zone – gearing the western SADC up for economic growth
The proposed Namakwa SEZ is being developed to be an industrial hub for the West Coast of Africa and a catalyst for industrialising the western SADC area.
It is located in the small mining town of Aggeneys. Aggeneys is in the Khai-Ma Local Municipality within the Namakwa District Municipality of the Northern Cape Province of South Africa. Aggeneys is 66 km from Pofadder (headquarters of the local municipality) and 110 km from Springbok, where the office of the district municipality is located.
The Vision is “to be the Catalyst for Economic Growth and Integration throughout western SADC.”
Value Proposition
The value proposition of the Namakwa SEZ is based on the existence of the Gamsberg Zinc Mine (pictured above) and the proposed building of a smelter by Vedanta Zinc International. These would be the anchor tenants of the SEZ.
It is proposed that a smelter be built to treat zinc concentrate produced at Gamsberg. The zinc concentrate produced at the existing concentrator plant will be treated in the smelter using the conventional roast-leach-electrowinning (R-L-E) process.
The SEZ designation application is in its final stages where we envisage that the final and complete designation shall be granted by the Department of Trade, Industry and Competition (dtic) in September 2022.
The anchor investor of the SEZ will be Vedanta Zinc International which is already running the Gamsberg Zinc Mine and intends to build a smelter. (Photo: Kevin Wright/Vedanta Zinc International)
Various domestic and international investment partners have indicated a keen interest to invest in the Namakwa SEZ with industries that include but are not limited to mineral beneficiation, construction, agriculture, green energy production, petrochemical, transport, engineering supplies, localisation and SMME development.
The Namakwa SEZ development is “the game changer” for minerals beneficiation in South Africa and the Northern Cape Province, providing a “turn-key solution” to industrialisation.
Post-SEZ designation the project will initiate Phase 1 (2023-2024) of the project which will be the SEZ construction and development.
The Northern Cape Provincial Government, with support and guidance provided by the dtic, is fully aligned to the establishment of the SEZ and has committed all efforts and energy to make a real success of this project.
Downstream investment
Non-ferrous metals such as zinc have characteristics that make them immensely useful in a wide range of downstream applications. Resistance to corrosion and their non-magnetic qualities are among the reasons for the wide range of uses to which they can be put.
It is envisaged that investors wanting to take advantage of the by-products of the mine and the smelter will be attracted to the Namakwa SEZ. Various wastes and by-products will be generated by the smelter that could be useful to investors.
Waste includes: Iron cake stabilized (dry), Jarofix; effluent treatment plant cake (dry); evaporation pond salts (dry); and cellhouse sludge (dry).
By-products include: manganese cake (dry); Cu-Cd cement (dry); Co-Ni cement (dry); and sulphuric acid (wet). Investors in this category include businesses in the follow sectors:
Sulphuric acid (including pharmaceutical, automotive batteries and paper bleaching) Fertilisers, Explosives, Paints