Experts say that the country’s Free Trade Zones have the potential to contribute more than N11.11 trillion in remittances to the Federation Account.
The Director of the Centre for the Promotion of Private Enterprise, Muda Yusuf stated that the free zones could outperform the record they had reported, according to The Punch.
He said that Nigeria’s high demand for foreign exchange meant that the country needed to use its free zones to generate non-oil export revenue and reduce reliance on crude oil export revenues.
“They should try to do more because we are still heavily dependent on oil and gas for our foreign exchange earnings and we need to see more investments in that area. In many other advanced countries, it is their free trade zones that they use to generate foreign exchange and attract investments,” the CPPE boss stated.
He cited Dubai as an example of a country that was taking advantage of its free trade zones.
Meanwhile, the Managing Director of Nigeria Export Processing Zones Authority, Olufemi Ogunyemi, in an address to the Senate Committee on Industry, Trade and Investment recently, stated that the zones provided wealth for the states that hosted them as well as revenue for agencies.
According to Ogunyemi, agencies such as the Nigeria Customs Service (N59.38 billion), Immigration Services (N828.7 million), and the Nigerian Ports Authority (N8.738 billion) generated Pay As You Earn remittances of N998 million for states.
The Nigeria Export Processing Zones Authority Act 63 of 1992, which established NEPZA as a federal body with regulatory powers, was followed by other free zone laws, including the 1996 Oil and Gas Export Free Zone Decree, 2003 Oil and Gas Free Zone Regulations, and other relevant legislation.
Ogunyemi noted that Nigeria’s free zones, numbering 46 licensed zones in 2022, have provided 38,429 direct employment jobs and an additional 172,930 indirect jobs as of the end of 2023.
In addition, He stated that the free zones also attracted foreign direct investment of $491.8 million and local direct investment of N1.15 trillion, and that “scarce Nigeria forex was saved” in the N1.62 trillion worth of cargo imported from the free zones between 2019 and 2023.
The Vice President of Highcap Securities Limited, David Adonri applauded NEPZA’s remittance data and urged the government to utilize them as a marketing tool to enlighten and attract more Nigerians to start manufacturing enterprises in free trade zones.
According to Adonri, remittances from free trade zones would increase in the future as the Dangote Petroleum Refinery, located in the Dangote Industries Free Zone, which is part of the Lekki Free Trade Zone (FTZ) in Ibeju-Lekki, Lagos State, prepares to begin petrol supply.
In his remarks, Professor of Economics at Babcock University, Olusegun Ajibola said the free trade zone remittances as of 2023 showed “something is happening, but it was not a figure to celebrate.”
Ajibola noted that the government needed to focus more on revenue creation because the zones were set up at a cost to the hosts.
He proposed that zone management work harder to enhance productivity and called for a review of the NEPZA Act, which is 32 years old, to identify areas that need to be addressed.
