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Leapfrogging Nigeria’s Economy Development through Free Trade Zone

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By Martins Odeh

There appears to be deep-seated and conclusive negative opinions about the modus operandi of the Free Trade Zone Scheme among individuals in and out of government in Nigeria.

This global economic system is primarily aimed at encouraging economies of scale through seamless production and manufacturing for export and local markets.

It also aims to support backward linkages; industrialisation; infrastructure development; employment generation; foreign exchange earnings, and revenue generation among others.

A Free Trade Zone remains a global economic matrix with a distinct framework which gives this business ecosystem the status of “country within a country.

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It, therefore, behooves any nation willing to adopt the concept to run it in line with the local law that regulates its operation.

This law is enshrined in the NEPZA Act 63 of 1992 and it is within the purview of international best practice and framework.

The Federal Government, seeing the benefits of the scheme to the national economy and development, adopted it some 30 years ago.

The scheme might not be at the growth level that the government had envisaged yet, but some stakeholders say excellent milestones have been attained.

For instance, 52 Free Trade Zones have been created, with over 600 enterprises operating within those business landscapes with a cumulative USD 30 billion investment lubricating the economy.

Deborah Dada, a legal practitioner, said the primary laws regulating the FTZs in Nigeria are the Nigerian Export Processing Zone Act 1992 (NEPZ Act) and the Oil and Gas Free Zone Act (OGFZ Act).

“NEPZA has also made specific regulations over the operation of specific FTZs like the Lekki Free Trade Regulations 2016.

“NEPZA has passed a regulation over the operation of FTZs in Nigeria known as the Regulations and Operational Guidelines for Free Zones in Nigeria 2004.

“Free zones in Nigeria provide rewarding opportunities that not only attract foreign investors but also provide employment opportunities to local citizens.

Thus, businesses should take advantage of these incentives to maximise industrial growth and economic development by taking steps to set up their businesses in a free trade zone in Nigeria.”

Some stakeholders say, in spite of challenges, investors and operators have found respite in the special interest of President Bola Ahmed Tinubu, to use the scheme to upscale industrialisation.

They cited how Tinubu, then governor of Lagos State, used the free trade zone concept to reconfigure the economic landscape of the Lekki Area of the state.

He also used it to abet the catastrophic submerge of the entire Victoria Island area of the state through the conversion of the then-ruptured Bar Beach into a world-class Eko Atlantic Free Trade Zone.

Today, the Lekki area harbours the Lagos Free Zone, Dangote Refinery Free Zone Enterprise, Alaro City, Deep Sea Port, and Lekki Free Trade Zone.

To the credit of the president, these accomplishments earned him the praise of stakeholders as the “brain behind modern free trade zone in Nigeria”.

The president’s attention must again be called to the gains and prospects of the scheme through sustained promotion of the economies of scale over the temptation of listing it as a pure revenue generation hub.

The concept of economies of scale promotes long-term and sustainable dividends for the country so long as the enterprises continue to reap low production cost advantages.

This will encourage continuous inflow of Foreign Direct Investments (FDIs), Direct Diaspora Investments (DDIs) as well as Local Direct Investments (LDIs) while keeping a grip on investments already attracted.

Regardless of the loud voices of anti-free trade zone campaigners, the scheme has made modest contributions to the economy.

How is it possible for the 52 Free Trade Zones and the over 600 enterprises currently in operation have not impacted the economy significantly?

The response to the above question was provided by the NEPZA Managing Director, Dr Olufemi Ogunyemi, while alluding recently that free trade zone was, however, not a ‘free meal ticket’ for the investors.

The import of this statement is simply to help grow public knowledge on the contribution of the free trade zones to the Domestic Gross Product (GDP) and National Gross Product (NGP) respectively.

The NEPZA Chief Executive Officer was emphatic when he said: “Free Trade Zones are business anchorages that have for decades been used to generate revenues for the Federal Government.”

He explained that the widely held notions that the scheme was a ‘free meal ticket’ for the investors thereby denying government revenues were incorrect.

“The NEPZA Act provides an 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 Annually as Operation License (OPL), and 3000 USD to 500 USD Registration fees in line with extant regulations on IGR remittances to the Federation Account.

“There is also the 100 USD to 300 USD Examination and Documentation fees per transaction which occurs daily’’, he said.

According to him, 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.

For instance, the Authority’s First and Second Quarters of the 2023 Key Performance Indicator (KPI) showed that a combined total of 21.3 million dollars was generated as Foreign Direct Investment while N9.8 billion accrued as Local Direct Investment.

Conversely, a total of 28.9 million dollars was generated as International Exports and N250.5 billion was accrued to the government as Domestic Exports while 338.9 million dollars and N36.3 billion were generated as International Imports and Domestic Imports.

Furthermore, the figure that accrued to the government as Custom Duty stood at N20 billion while that of PAYEE amounted to N346.8 million, and a total of 3, 776 employment was generated within the two quarters reviewed.

In total, the Authority’s 40 per cent contribution to the consolidated revenue in naira as of November 2023 stood at N1, 800,809,1773.38 with a similar 40 per cent margin of transfer to the account in dollars amounting to USD 1, 167,122.86.

The total of the figures generated in 2023, which included figures from Tender Fee; Withholding Tax (WHT); Value Added Tax (VAT); Stamp Duty; PAYEE as well as Customs Duty stood at N38, 879, 485, 774 568.90.

The KPI for 2022 also showed excellent flashes of gains made by the scheme which attracted a total of 28 new enterprises with a total of 90 million USD value of FDI and N80 billion value of Local Domestic Investment (LDI).

The record also placed the value of both the International and Local Exports at 36.8 million USD and N450.8 billion respectively.

The 2022 key performance indicator further highlighted the value of International and Domestic imports to be 999 million USD and N188 billion.

The report stated that a total of N34.215 billion was generated as Custom Duty while the amount generated from the free trade zone in 2022 by the Immigration Service stood at N702.7 million with a total of 3,555 employment created.

A session of stakeholders urges the authority to be aware of the need to ensure a transparent listing and deductions of mandatory duties and taxes.

One of the ways to achieve that, they say, is by digitalising its process and agreeing on the best ways for a dependable free trade zone tax administration with the relevant authorities.The scheme remains an economic development tool the country is using to leapfrog our economy and its sustainability and success should be our utmost concern. (NANFeatures)

NEWS

CBN Introduces New Regulatory Framework for Non-Security VASPs, others

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By Tony Obiechina, Abuja

The Central Bank of Nigeria (CBN) has introduced a comprehensive regulatory framework for non-security virtual assets service providers (VASPs), including stablecoins and deposit money tokens dealers, as part of its sustained regulatory measures to strengthen its oversight of emerging digital financial services in the country.

This was contained in the Bank’s circular with Ref.

No PSP/DIR/PUB/CIR/001/004 dated November 5, 2026 and signed by its Director.

Payments System Policy Department, Musa Jimoh, indicated that the new regulations established licensing, authorisation and supervisory requirements for virtual asset issuers and service providers operating in or targeting the Nigerian market and were designed to promote responsible innovation, strengthen the integrity of the financial system and provide an appropriate regulatory framework for emerging digital payment instruments.

Under the new framework titled ‘Regulations for the Operations of Non-Security Virtual Assets in Nigeria’, stablecoin issuers, virtual asset service providers and other regulated operators will be subject to requirements covering licensing, capital adequacy, reserve backing, liquidity and redemption arrangements.

While also prescribing standards for corporate governance, risk management, internal controls, cybersecurity and operational resilience, the framework also directed the operators to comply with requirements for safeguarding customer assets, making appropriate disclosures and establishing effective complaints management systems.

In addition, the framework also introduced measures to address financial crime risks associated with digital asset transactions, including anti-money laundering and counter-terrorist financing obligations, sanctions screening, transaction monitoring and blockchain analytics.
The framework also mandates virtual asset service providers to comply with the Travel Rule and conduct due diligence on counterparties, particularly other virtual asset service providers involved in transactions.

The latest regulations apply to individuals and organisations conducting regulated activities in or from Nigeria, directing such activities at Nigerian customers or undertaking operations that could materially affect the country’s payment system, financial system, foreign exchange market or financial stability.

According to the apex bank the requirements could apply irrespective of whether an operator maintains a physical presence in the country, which implies that foreign virtual asset operators targeting Nigerian customers or undertaking activities with material implications for the country’s financial system may also fall within the regulatory framework.

The CBN clarified, however, that the new regulations did overrule the statutory responsibilities of the Securities and Exchange Commission (SEC) or other competent authorities, stressing that activities involving security virtual assets, securities, investment contracts and other capital-market products would remain subject to the applicable capital-market regulatory framework.

The framework further provides that where an activity involves both non-security virtual assets and matters under another regulator’s jurisdiction, operators are required to obtain the relevant approvals from each competent authority.

The apex bank mandated all the affected financial institutions, issuers, service providers, operators and other stakeholders to familiarize themselves with the regulations and ensure strict compliance with the applicable licensing, prudential, operational, reporting and technology requirements.

As a deterrent to abuses, the framework also provides for regulatory enforcement, administrative sanctions and orderly wind-down arrangements for operators unable to continue their regulated activities.

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Group tasks Women Journalists on Reporting Impact of Coal Mining in Enugu

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From Sylvia Udegbunam, Enugu

A non-governmental organisation, Renevlyn Development Initiatives, has called on women journalists in Enugu State to intensify investigative and gender-sensitive reporting on the environmental and socio-economic impacts of extractive activities on women in host communities.

The Executive Director of the organisation, Philip Jakpor, made the call during a one-day training on Agenda for Women and Extractive Journalism held at Hotel Sylvia, Independence Layout, Enugu, with the theme, “Empowering Women Journalists for Effective Reporting of Extractive Impacts in Nigeria.

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Jakpor stressed that discussions on extractive activities in Nigeria, particularly in Enugu State, would remain incomplete without addressing the devastating environmental consequences of coal mining.

He noted that women in host communities bear a disproportionate burden of mining activities because of their roles as caregivers, providers and major users of natural resources, including land and water.

He regretted that despite bearing much of the consequences of environmental degradation, women are often excluded from decision-making processes and policies concerning extractive activities in their communities.

He therefore urged female journalists to adopt gender-sensitive reporting approaches that amplify, document and adequately present the experiences of affected women.

Earlier, the Project Officer of Renevlyn Development Initiatives, Tracy Ohovwore, acknowledged the contributions of journalists in drawing attention to environmental challenges but observed that the specific experiences of women affected by extractive activities remained largely underreported.

She raised concerns over pollution in Iva Valley, Akwuke, Onyeama, Okpara and Awhum, alleging that the Ekulu and Nyaba rivers, which residents depend on for domestic water, had been contaminated by wastewater containing heavy metals, including arsenic, cadmium, lead and mercury.

Also speaking, the Executive Director of New Life Community Care Initiative (NELCCI), Mrs Florence Ifeanyi Aneke, said environmental degradation undermines community development by threatening livelihoods, food security, healthcare, education and access to clean water.

She added that pollution and land destruction could expose women to serious health risks, including reproductive health challenges, while increasing the economic hardship faced by families.

Aneke called on the Enugu State Government to harness the state’s natural resources in ways that create economic opportunities without destroying the environment or imposing further hardship on host communities.

She also advocated compensation for affected communities, particularly women and persons with disabilities, while urging the government to ensure their active participation in decisions concerning extractive activities.

In her contribution, a journalist, Ebere Ekeopara, shared her experiences growing up in a coal-mining community, highlighting poor remuneration for miners, health hazards and the impact of mining activities on women and family livelihoods.

She urged journalists to go beyond routine reporting through sustained investigative journalism that identifies environmental hazards, establishes institutional responsibilities and examines available interventions for affected communities.

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RMAFC Chairman Tasks Directors, Others on Accountability, Productivity 

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By Tony Obiechina, Abuja

The Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Dr. Mohammed Bello Shehu has charged Directors and Heads of Departments (HODs) to demonstrate commitment, accountability and professionalism in the discharge of their duties to ensure the successful implementation of the Performance Management System (PMS) in the Commission.

The Chairman gave the charge at the signing of Performance Contracts by Directors and Heads of Departments at the Commission’s headquarters in Abuja.

He described the exercise as more than the signing of official documents, noting that it represented a covenant of accountability and a commitment to delivering on the Commission’s strategic objectives through improved productivity and measurable results.
He also noted that the initiative aligned with the Federal Government’s Renewed Hope Agenda under President Bola Tinubu, which prioritises institutional efficiency, good governance and improved service delivery.

He explained that the PMS represents a deliberate shift from routine administrative activities to a result-oriented system that measures institutional and individual performance against clearly defined objectives. He noted that the Commission had recorded significant progress towards its implementation through the development of a dedicated IT platform, organisation-wide staff training, capacity building for PMS champions, management sensitisation sessions and change management initiatives.

He emphasised that the system was not designed to be punitive but to empower officers, clarify responsibilities, identify capacity gaps and promote fairness in performance assessment. He therefore urged Directors and HODs to ensure that departmental targets and key performance indicators were realistic, measurable, time-bound and aligned with the Commission’s strategic objectives. 

Shehu assured staff of management’s commitment to providing the necessary support and enabling environment, while urging all officers to embrace the initiative and make accountability, professionalism and improved service delivery their guiding principles.

The Chairman of the Personnel Matters Committee (PMC) and Federal Commissioner representing Cross River State, Ntufam Eyo-Nsa Whitley, described staff as the driving force behind the success of the Commission, urging them to demonstrate discipline, diligence, emotional intelligence and dedication to their responsibilities. He encouraged officers to take the performance management exercise seriously and give their best towards achieving the Commission’s objectives.

He further urged staff to support one another, embrace the reform process and avoid attitudes that could undermine teamwork and institutional progress. Hon Ntufam called on the PMS champions to demonstrate commitment and provide guidance to their colleagues, stressing that collective responsibility, discipline and effective implementation would ensure the success of the initiative.

In his address, the Secretary to the Commission, Comrade Tosin Adeyanju, described the signing ceremony as a significant milestone in the Commission’s history, marking the transition from intention to action, planning to execution, and traditional performance evaluation to a modern, data-driven performance management system. He appreciated the Chairman’s leadership and the Commissioners’ support, while acknowledging the critical roles of Directors and HODs in driving the transformation.

He urged management staff to take ownership of their performance agreements and ensure regular engagement, feedback and monitoring to achieve the desired results. He stressed that the success of the PMS would depend not merely on signing the contracts but on the Commission’s ability to translate agreed targets into improved productivity, efficiency and measurable institutional achievements.

The Director overseeing the Administration and Human Resource Department, Alhaji Ahmed Rufai Gidado, explained that the Commission had undertaken a series of activities towards the implementation of the Performance Management System and that the signing of the performance contracts represented a major milestone in the process, marking the transition from preparatory activities to the implementation phase.

In his lecture on The Role of Performance Management in Public Sector Transformation, Mr. Nwachukwu John, Head of Economy Team Performance Management at the Office of the Head of the Civil Service of the Federation (OHCSF), commended RMAFC for the progress recorded in adopting the PMS framework. He noted that the Commission’s commitment demonstrated its readiness to embrace public service reforms and align individual responsibilities with institutional and national development objectives.

He explained that the PMS was designed to connect the responsibilities of individual officers with departmental targets, the Commission’s strategic plan and the Federal Government’s priorities. He urged Directors and HODs to ensure that performance contracts were cascaded to other levels of staff through regular engagement and feedback, emphasising that the system was a productivity tool rather than a promotion exercise.

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