Nigeria Free Trade Zones Striding Toward Fast Tracking Industrialisation
The prospect of Nigeria truly harnessing all of its economic potentials to close up the obvious deficit rests with investing heavily in the free trade zone scheme as doing so would fast track the country’s quest for industrialisation.
The Federal Government is, however, not unaware of the stupendous economic leverages associated with the scheme which was why the Nigeria Export Processing Zones Authority (NEPZA) was established far back 1992 to midwife this very important sector of the economy.
The Authority has under its control a total of 40 private and two public zones. Doubtlessly, Lagos State leverages on its closeness to the ocean, huge population and strong economy as comparative advantages that effortlessly attract most of the existing private zones while Kano and Calabar oversee the two public zones.
The contributions of the hundreds of enterprises in the various zones to the nation’s economy can only be imagined, just as the strides in infrastructure development are comparable to those found in Dubai, China, Malaysia, Egypt and such other countries applying the free zone concept dutifully.
Arguably, some of the private zones smoothly remodeling the pathway for the country’s industrialisation include Dangote Petrochemical Enterprise; Eko Atlantic; Ogun Guangdong; Lekki; Lagos FTZ; LADOL; Snake Insland Integrated Free Trade Zone (SIIFTZ); Quit Aviation Services; Newrest; NAHCO; Sky Chefs Things to Remember; and Alaro City among others.
These free zones are hosts to hundreds of enterprises, ranging from firms that produce complex to simple products with very high market demands.
Without these zones, perhaps the country’s quest for industrialisation could have been best described as a mere aspiration.
No wonder, Prof. Adesoji Adesugba, the new Managing Director, Nigeria Export Processing Zones Authority, NEPZA while on a familiarisation tour of the zones in Lagos axis between August 17 and August 22 described the Dangote Petrochemical Free Trade Zone Enterprise located in Lekki as an “awesome one-world project capable of fast tracking the country’s industrialisation process when concluded’’.
The project majestically sits on 2, 700 hectares of land comprising of Petroleum Refinery, Dangote Fertiliser and other sundry manufacturing outfits.
The refinery section of the project is considered the largest single trail petroleum refinery in the world with capacity to produce 650,000 barrels per day making a total of 32 million ton per annum.
Adesugba said some of the engineering and marine technologies used in the project could later be listed in the “Guinness Book of Record’’, as according to him, the project has come to meet both the petroleum and fertilizer needs of the country.
“It is indeed a privilege for this project to be sited in Nigeria. This shows that Alhaji Aliko Dangote, Founder and Chief Executive Officer of the Dangote Group, had long caught the vision of the country to become self sustaining in the production of petrochemical products.
“We are fascinated by the energy both the expatriates and local work force have put into this work so far. The project has opened a vista for technology transfer, industrialisation, massive job creation, training of local Engineers as well as apprenticeship in world class marine and petrochemical engineering procedures.
“Nigeria is however, eager to see the completion of this project which shall open up the economy for Foreign Direct Investment (FDI) drive. Dangote has used the free trade zone scheme to sustain the progress of work as all machinery and equipment from abroad to aid the project are tax and duty free, the NEPZA boss said.
“There is no gain saying that the project when completed will have multiplier positive effects on our economy and that of Africa, and the world as a whole. This is indeed a one-world project capable of fast tracking the country’s industrialisation.
He reiterated that only the free trade zone concept had guaranteed lofty incentives that included non- payment of taxes, customs duties and such other free levies that were hitherto alien to the operation of businesses outside of the zones.
Re-echoing Adesugba’s accolades on the Dangote petrochemical zone enterprise, Capt. Rajen Sachar, Head, Marine and Port Infrastructure overseeing the project, said Alhaji Aliko Dangote had placed a standing instruction for both young Nigerians’ Engineers and Engineering students on internship programmes in the company to be properly exposed to the practical aspects of the project.
Sachar further explained that it was on the basis of that local young engineer were always sent abroad, especially in India to acquire knowledge on advanced Marine Engineering, Dredging and Underwater Wielding among others.
He said Dagote’s expectation was that these crop of young engineers would become high skilled to sustain the development and industrialisation of the country without foreign expertise in the nearest future.
“One thing I must say is that our presence in a free zone has limitless advantages. We get our raw materials from a free port we constructed here. We had dredged the ocean in such a way that we are bequeathing to the local communities some 2.1 billion tons of sand,’’ Sachar said.
It is also important to mention that the clusters of free zones around the Lagos Lagoon axis when fully developed will serve as catalyst for the industrialisation of the country.
This was the position of the NEPZA Chief Executive while on a working tour to Snake Island Integrated Free Trade Zone (SIIFTZ), LADOL and Eko Atlantic Zones respectively.
The NEPZA boss explained that those business enclaves had the capacity to define the economic fortune of the country, adding that the ocean provided the zones the leverages to maximize their potentials.
For instance, the Eko Atlantic City remains a masterpiece and arguably the new wonder of the world with investors successfully carving out a “smart city’’ with multi-purpose functions from the ocean.
The city which operates as a zone is a beauty to behold and would in a short while obliterate the wrong narrative of Lagos being a chaotic city. The Eko Atlantic city free zone resonates the alluring image of a true beautiful and prosperous country.
According to the NEPZA boss, the country was relying on the zones on the ocean to introduce innovations that would help to attract huge investors’ traffic, adding that those clusters remained the “game changer’’ for the country’s industrialisation.
Adesugba’s evaluation of these zones remains apt particularly with respect to LADOL’s vision for expansion and diversification announced by the Chief Executive Officer of the firm, Dr Amy Jadesimi while playing host to the managing director and his team.
Jadesimi had expressed the willingness of the company’s board of trustees to diversify by investing heavily in Agriculture and HealthCare, adding that, doing so would boost the country’s food security and also reduce medical tourism.
She said the country’s journey to industrialisation was holistic, adding that the process required that government continually provide the enabling environment for investors to maneuver their investments.
LADOL is West Africa’s Free Zone and Logistics Hub for Multinational Industrial and Offshore Companies, positioned strategically at the entry-point to Lagos. It is a fully integrated, independent and secure-base anchored around a 200m quay with a deep, 8.5m draft. The quay provides stevedoring and cargo.
On his part, Mr Haerm Aswani, Director General, Tolaram Group, Lagos free zone said the country’s quest for industrialisation could be achieved quicker when the right attention was given to the free zone scheme.
He reiterated the need for the Federal Government to take deliberate steps in ensuring the success of the scheme as with other climes, adding that the country’s location and population gave it enormous advantage as Africa market leader.
Adesugba expressed delight in the infrastructural development in the Lagos free trade zone carried out by Tolaram so far.
He stated that it was great deal that the zone had 17 registered enterprises with 20 billion US dollars investment profile.
Chief Samuel Iwuajoku, Managing Director, Quits Aviation Services free trade zone, however, urged the government to glide gradually and steadily to achieve industrialisation by ensuring proper regulation of the scheme, adding that converting all business spaces into free zone might become the country’s albatross.
Meanwhile, the Lagos State Government appears to have fully bought into the zone concept in view of its interest in continually investing on the scheme.
The state has been generous with its limited land mass as all existing free zones are located in massive expanses. This generosity underscores the state’s understanding of the enormous promises the scheme holds for its teeming population.
Gov. Babajide Sanwo-Olu, like most former governors of the state, had displayed favorable mien toward free zone operation when on August 20 while playing host to the NEPZA boss promised to further solidify cooperation with regulatory agency to create a huge platform for businesses to thrive in the state.
Sanwo-Olu also said free zone was a catalyst for local production, exports and development that could ignite real growth of the economy.
“Lekki free trade zone is the biggest in the country and for us, it has become a reality and has come to stay to redefine the country’s industrialisation process,’’ the governor said.
The Kano State Government is working hard to adopt the Lagos template with respect to providing outside infrastructure and other support logistics simply to the Kano Free Trade Zone viable and boisterous.
The zone sits on both 250 hectares of land at Kanye and on 262.01 hectares at Fanisau areas of the state respectively, thereby providing the needed ambiance business enterprises to operate.
The state governor, Alhaji Abdullahi Ganduje, like his Lagos counterpart, promised to collaborate with NEPZA in improving infrastructure around the zone, adding that the state had captured the zone in its metro-rail tracks to soon be constructed.
Ganduja, made these remarks when the NEPZA managing director paid him a courtesy visit during his maiden tour of Kano Free Trade Zone between August 6 and August 8.
The governor, represented by the Deputy Governor, Dr Nasiru Gawuna also described free trade zone as “catalyst for economic emancipation’’, adding that the state would link up with the concept to widen its scope for socio-economic development.
Ganduje’s position was re-echoed by the Emir of Kano, Alhaji Aminu Bayero during Adesugba’s similar visit to his Palace on August 7.
The Paramount Ruler did not hesitate when he said effective ultilisation of the free trade zone scheme would accelerate the country’s quest for industrial development.
“ I am committed to the principles and ideals of Export Processing Zones and Free Trade Zones as well. The concept encourages local production, reduces over dependency on imports, encourages exports and alleviates poverty.
“The aspect we cherish most is that the investors are compelled to produce and export from the zones. This is an indication that the country can rely on the zones for its industrialisation by providing infrastructure to support operations of the zones.
“We already reaping from the Kano zone as it gives direct and indirect employment to our people,’’ the monarch said.
Mr Mu’azu Ruma, NEPZA’s General Manager, Zones Operations Private said the introduction of the scheme by the Nigeria government was legendary, adding that his department had ensured enterprises in the zones complied to global safety, security and environmental standards.
Ruma is also of believe that the prospects of the scheme in accelerating the country’s industrialisation outweigh all the challenges that could come with its operations, as according to him, governments at all levels must be prepared to support NEPZA to deliver on its mandates.
The managing director went on to corroborate Ruma’s remarks when he reiterated that state governments must view free trade zones as the quickest business enclaves that could ignite development, adding that the zone should be allowed to maintain its sovereignty so as to perform optimally.
Adesugba said: “free trade zone scheme is not only a Nigeria thing, it is in fact, a global business phenomenon where operations in the zones are free from been taxed. The idea is to accelerate local production, job creation and to attract Foreign Direct Investment (FDI) as well. We must, therefore, do it right to get the right results’’.
In conclusion, it can be clearly seen that the President Muhammadu Buhari’s list of nine policy issues released on August 25 which included expanding business growth, entrepreneurship and industrialization are intertwined with the policy direction of free trade zone. This therefore, underscores the urgent need for government to give the Authority the right institutional support and timely releases of budgetary allocations to driving these economic policy issues of the president though the free trade zone.
Written by Martins Odeh
Head, Corporate Communications, NEPZA