Nigeria risks becoming a dumping ground for countries in the West African sub-region if the country’s export free trade zones are not allowed to function to meet international standards.
A free trade zone is a special economic or geographical area in a country where foreign companies can import materials, manufacture goods, and export products without being affected by the Customs’ rules and taxes.
The Executive Secretary, African Free Zones Association, Chris Ndibe, said in Abuja on Monday that with most trade zones in the neighbouring West African sub-region, particularly Ghana and Togo thriving, Nigeria will end up being the dumping ground.
“Our neighbouring countries, especially in West Africa, are doing very well,” Mr. Ndibe said. “What they are doing is that they have Nigeria as their market, and their free zones. Togo next door is gearing up also.
“Ghana has the highest number of free zones in Africa. The single factory zones scheme that were frustrated in Nigeria is booming in Ghana.
The single factory zone is where a government confers export potential and status to enjoy the incentives, no matter where the factory is sited in the country.
A one-time General Manager, Nigerian Export Free Zones Authority (NEPZA), Mr. Ndibe, who is also one of the founding members of the World Free Trade Zones Organization, said a survey of free zones in Africa showed Nigeria as one of the worst.
Identifying Ghana, Kenya and Egypt as the premier free trade zones in Africa, Mr. Ndibe warned that at the rate Nigeria was going, the country would end up as dumping ground, especially for other free trade zones within the West African sub-region if nothing urgent was done.
“If one does not know how to handle a thing, one would not get anywhere. The rate at which free zones are developing across the world is going higher and higher. It is getting more scientific.
“If one looks at what is moving free zones all over the world, one will find out that we (Nigeria) don’t have it, and we are not moving any higher. There are things that are supposed to be done. Today, the country has 38 approved free trade zones. But, only about eight are operational.”
He identified Banky free trade zone in Borno State as one of those areas that have not become functional, despite being given approval since 1999, noting that if the zone had been in operation all these years, most people conscripted into Boko Harm for lack of jobs would have been been gainfully engaged.
“I am yet to know the scheme that can turn around the country’s economy more than free zone. Oil is instant, but in terms of manufacturing, job employment, backward linkages, taking care of the farmers and transfer of technology, I rate free zones higher than any other thing.
“When I visited Mombasa sometime last year, one factory that produces jeans material for the American market has 2,500 workers on shifts.
“Our own Calabar Free Trade Zone has the capacity to accommodate hundreds of such factories. If 50 of such factories are employing 2,500 workers, Nigeria would even end up importing workers from other African countries to be able to meet up with the volume of workforce required.
“With the number of employment that free zones are supposed to give, I am very optimistic that if the required attention is given to it, we will go places,” Mr. Ndibe said.
The level of incentives in Nigeria, as enshrined in the Nigerian free trade zone Act, he pointed out, was not attractive enough and should be reviewed.
“The services we give are below international standards. The incentives need to be revisited. Our infrastructure is at the lowest ebb today. The highest obstacle to investment in the free zones today is the conflict between the free zone authority and other government agencies like Nigeria Customs, Nigerian Immigration Service and the free zones authority,” he stated.
Emphasizing the need for the review of the Act promulgated over 20 years ago, he said wall over the world, the practice was to revisit the operational every five to ten years.
To turn the industry around, he said the World Free Zones Organization has organized workshops to train workers of the regulatory authorities, while ensuring the right attention was given to the free trade zone in Nigeria to get the country out of the current economic recession and help escape being a dumping ground.