The Nigeria Export Processing Zones Authority (NEPZA) says the country’s Free Trade Zones are business anchorages that have for decades been used to generate revenues for the Federal Government.
Dr Olufemi Ogunyemi, the Managing Director of the Authority who made the remark on Monday in Abuja, said the widely held notions that the scheme was a `free meal ticket’ for the investors thereby denying government revenues were incorrect.
Ogunyemi said this public statement was essential to also clarify the misunderstanding by various individuals and entities, in and out of government, on the nature of the scheme.
Ogunyemi, also the Chief Executive Officer of NEPZA, said the Authority was more than ever prepared to enhance public knowledge on the principal reason for the country’s adoption of the scheme by the NEPZA Act 63 of 1992.
He further explained that a policy shift on the operations of the scheme might hurt the economy badly, adding that the incentives and waivers enjoyed by the investors were backed by law.
“The Free Trade Zones are not hot spots for revenue generation, rather they exist to support the social-economic development which include but not limited to industrialization; infrastructure development; employment generation; skills acquisition; foreign exchange earnings as well as inflows of Foreign Direct Investments,’’ Dr Ogunyemi said.
The NEPZA’s managing director also said: “The NEPZA Act provides exemption from all federal, state, and local governments taxes, rates, levies, and charges for FZE, of which duty and VAT are part.
“However, goods and services exported into Nigeria attract duty, which includes VAT and other charges. In addition, NEPZA collects over 20 types of revenues ranging from 500,000 USD-Declaration fees, 60,000 USD Operation License (OPL) Renewal Fees between three and five years.
“There is also the 100-300 USD Examination and Documentation fees per transaction which occurs on a daily basis. There are other periodic revenues derived from Vehicle Registration, Visa among others. The operations within the free trade zones are not free in the context of the word.’’
Ogunyemi reiterated that the global business space had contracted significantly, adding that to win a sizable space would require the ingenuity of the government to either expand or maintain the promised incentives.
“These incentives, coupled with NEPZA’s streamlined approval processes and investor-friendly policies, will encourage more multinational corporations and local investors to leverage on scheme which has a cumulative investment valued at 30 billion USD.
“The scheme has indeed caused an influx of FDIs; it has also brought in advanced technologies, managerial expertise, and access to global markets. For instance, the 52 FTZs with 612 enterprises have and will continue to facilitate the creation of numerous direct and indirect jobs, currently estimated to be within the region of 170,000,’’ Dr Ogunyemi said.
According to him, the scheme should be seen as a tool for economic and social security as skilled, semi-skilled, and unskilled citizens are continually lifted above the poverty levels through its employment channels and infrastructure development across
Furthermore, the managing director however stated that: “as we approach the first quarter of the 21st Century, we might want to consider dropping the misleading word `free’ from the title.’’
He said an adjustment in title and introduction of current global business practices would greatly advance the scheme with an ever increasing forward and backward linkages with a greater market offered by the Africa Continental Free Trade Agreement (AfCTA).
“We have commenced negotiations across the board to ensure that the NEPZA Act is amended to give room for the adjustment of the scheme’s title from `Free Trade Zones to Special Economic Zones respectively. This will open up the system for the benefit of all citizens,”he said.
Signed:
Martins Odeh Ph.D
Head, Corporate Communications
November 27th , 2023.
