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FG says Nigeria has 46 of 240 FTZs in Africa

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By Abraham Adekunle

Experts have posited that Africa needs more FTZ to enable economic growth.

The Federal Government of Nigeria has revealed that 46 of the 240 Free Trade Zones (FTZs) in Africa are in Nigeria. The FG says that the number could further increase as more states apply for FTZ licenses. The Managing Director of the Nigeria Export Processing Zones Authority (NEPZA), Prof. Adesoji Adesugba, disclosed this to the press. He said that 30 of the 46 FTZs in Nigeria are currently functional. The NEPZA chief also responded to claims that Akwa Ibom State had difficulties obtaining a license. On the contrary, Prof. Adesugba emphasized that they never applied for one.

A Free-Trade Zone (FTZ) is a class of Special Economic Zones (SEZ) – an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country’s national borders, and their aims include increasing trade balance, employment, increased Investment, job creation and effective administration. However, an FTZ is a geographic area where goods may be imported, stored, handled, manufactured, or reconfigured and re-exported under specific customs regulations. These goods are generally not subject to customs duty.

Developing countries like Nigeria run EPZs.

These zones are usually organized around major seaports, international airports, and national frontiers, generally areas with many geographic advantages for trade. This is because FTZs are established for Economic Development. Nigeria runs Export-Processing Zones (EPZs), majority of which are situated in developing countries. An EPZ is a specific type of zone which is usually set up in developing countries by their governments to promote industrial and commercial exports. An EPZ offers enterprises free trade conditions and a relaxed regulatory environment.

Its objectives are to attract foreign Investors, collaborators, and buyers who can facilitate entry into the world market for some of the Economy’s industrial goods. Thus, it generates employment and foreign exchange for the country. Countries, such as China, India, Brazil, etc., have EPZ programs. Also, the regulations used in FTZs are usually quite different from those used in EPZs. For instance, China’s specific rules that differentiate an EPZ from an FTZ is that 70 percent of goods in EPZs must be exported. No such quota exists for FTZs.

China uses zones as a strategy for economic development.

Prof. Adesugba said that there are more than 1,300 FTZs in China, which is what China uses as a strategy to ensure economic development. He added that Africa can imitate China, with Nigeria taking the lead in propagating FTZs. He said that the widespread FTZs is why most Chinese firms are very competitive. As part of the stakeholders, they want to replicate the same in Africa. He lamented that Africa only has 240 FTZs and there are only 46 under the NEPZA scheme. In fact, only 30 of those 46 FTZs are currently working.

He said that the organization is still encouraging states and private investors to consider utilizing the scheme. Reacting to reports that Akwa Ibom is currently facing difficulties in getting an FTZ license, he said, “I am not sure we have records of Akwa Ibom applying for any free zone license and we are inviting them if they so desire to have a free zone.” He further said that NEPZA’s desire is to have a free zone in each state of the country regardless of who is the political head.

Nigeria’s FTZs attracted $30billion in investments.

President Muhammadu Buhari stated that FTZs in Nigeria have attracted over $30 billion in investments. This is expected to increase in the next few years with sustained incentives and an aggressive investment drive. Incentives in the free trade zones include Tax-free operations, free fiscal duty for imported goods, machinery and equipment, exemption from levies. The presence of key enterprises in the zones is an attestation to the fact that FTZs are contributing immensely to the growth and industrialization of the Nigerian economy.


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