The federal government, at the weekend, announced a five-year extension for the validity period of licensing of operators in free trade zones across the country.
Minister of industry, trade and investment, Otunba Niyi Adebayo, explained that the move was to mitigate challenges hindering operators in the zone, noting that, the directive was also coming on the heels of the federal government’s ease of doing business mandate.
Speaking at a stakeholders’ forum organised by the Nigeria Export Processing Zones Authority (NEPZA) tagged: “Streamlining Free Zone Operations for Global Competitiveness,” in Lagos, the minister, however, urged operators to take advantage of the extension, but ensure they make annual returns.
“With regards to the validity period of licensing because I understand that is one of the major challenges to operators at the free trade zone, I have directed that the validity period of licenses to be for five years, however, return should be made every year and we want to assure that before the end of this month, all the issues with duty payment would be resolved,” he pointed out.
He said, globally, free trade zones play a critical role in stimulating industrial activities, boosting the manufacturing sector and growing the economy, adding that, their performance creates job opportunities and diversifies the economy to generate foreign exchange.
He added, “Free trade zones are very critical to revenue generation for the Nigerian economy and can also help to improve Nigeria’s fiscal position especially given the volatility of oil prices.
“Expanding Nigeria’s export capacity needs under the African Continental Free Trade Agreement (AfCFTA) mitigates the risk of Nigeria being a dumping ground for imports while also boosting our foreign currency reserves. Therefore, it is absolutely to adopt strategies that will transform them into a dynamic instrument for economic growth,” he said.
He noted that, in spite of their social and economic potential, operations within the free trade zones are impacted by challenges such as infrastructural deficit, limited financing to ease operational constraints and misalignment of interest between operating firms and government agencies.
He said, in December 2020, the ministry temporarily suspended the issuance of new free trade zone licenses, noting that, the move was motivated by concerns that the free trade zones have not delivered on expected contribution for employment, government revenue and export proceeds as envisaged in various national development plans
Managing director, NEPZA, Prof. Adesoji Adesugba, said, stakeholders must come together to maximise the potentials of the scheme, adding that, over $25 billion have been generated through the scheme thus far.
He said, the forum is to discuss and address challenges facing special economic zone operators in Nigeria, stressing that Nigeria seems to be lagging behind due to factors such as policy irregularities.
On his part, the managing director, Oil and Gas Free Zones Authority (OGFZA), Umana Okon Umana said, the success of any country is based on development of its free zones, saying, Nigeria has not done so much to maximise the potential of the free zone.
The managing director, Dangote IFZ, Mr. Olayinka Akande, explained the need to fine-tune current operations at the zones, saying that, operational processes at the zones are not very transparent.
He also stated the need to digitalise operations so that every player has the same set of operations at all times.
