FG Puts Up Calabar & Kano Free Trade Zones For Concession

In furtherance of the nation’s Industrial Revolution Plan as well as National Development Plan, the Federal Government has concluded arrangements to concession the Calabar and Kano Free Trade Zones.

Speaking during a Road-Show in Lagos to publicize the process, the Minister of Industry,Trade and Investment, Otunba Adeniyi Adebayo explained that the measure would enable injection of appropriate funding and expertise into the government owned Free Trade Zones,thereby upgrading them to International standards for increased economic activities and attraction of more direct foreign investments into the country.

“The Federal Government in its desire to accelerate the pace of economic growth in the country established vide Decree No. 63 of 1992, the Nigeria Export Processing Zones Authority (NEPZA) to handle the responsibilities of licensing, regulating, promoting and monitoring free trade zones in Nigeria.

“The ultimate aim for the free trade zone scheme is to attract foreign direct investments, generate employment, enhance trade and industrialization, promote exports, enhance foreign exchange earnings, encourage transfer of technical know.

“Indeed in a number of jurisdictions where FTZs or Special Economic Zones (SEZs) were adopted as a model to fast-track industrialisation, diversify the economy, create jobs, and generate Foreign Direct Investment (FDI), they haveliterarily worked magic. Countries such as China, United Arab Emirates (UAE), Singapore, Ethiopia, Malaysia, and even African countries like Ethiopia, Ghana, have leveraged FTZs, which are designated areas for promoting trade openness and investment facilitation, as a dynamic instrument for growth and development.

“Sadly, efforts to replicate the success of the FTZ model in Nigeria have not recorded the same success. The two FGN-owned SEZs in their current state cannot significantly improve the country’s competitiveness nor help the drive to effect structural change/economic diversification due to poor infrastructure, reliance on treasury to finance capital expenditure, no link between the industrialization strategy of Government and the zones, limited skills etc.

“To put it in proper perspective, 30 years after the FTZs scheme was adopted in Nigeria, cumulative investment has only stood at about $20 billion, whereas in about 30 years when the first free zone was established in Jebel Ali area in Dubai (i.e. Jebel Ali Free Zone – JAFZA) in 1985, the UAE has emerged the destination of choice for global trade and investment. In 2015, JAFZA alone generated trade worth $87.6 billion and accounts for almost 32 per cent of the total FDI flowing into the UAE and for about 24 per cent of Dubai’s annual Gross Domestic Product (GDP).

“The Chinese economy also owes its towering status in global trade and commerce to its vibrant FTZs. China hasThe Asian Tiger has successfully latched on the model to control the world’s logistics and services sector with its SEZs contributing 22 per cent of itsChina’s GDP, 45 per cent of its total national FDI, and 60 per cent of exports.
In view of the above and given the large investments required to transform the zones, private sector investment is important to reduce government’s financial burden and the associated business risks as well as to introduce innovative ideas to the management and operational framework of the zones for improved performance in areas of, economic growth, employment generation, foreign direct investment and export promotion”.

The minister who joined the event virtually said President Mohammadu Buhari and his vice, Yemi Osinbajo deserved commendation for the enomous work they have done and continues to do in making sure that the country achieves steady economic growth.

He stated the strategic focus of the current administration when it came on board in 2015 ,was to accelerate the implementation of the Nigeria Industrial Revolution Plan through the use of Free Trade Zones to create jobs, promote exports and boost growth and development.

He said,”The strategic focus of the Government of His Excellency, President Mohammadu Buhari, GCFRthis administration, when it came on board in 2015 as encapsulated in the Economic Recovery and Growth:1 Plan (2017-2020) and the current National Development Plan is to accelerate the implementation of the Nigeria Industrial Revolution Plan (NIRP) through the use of Free Trade Zones (FTZs) in order to create jobs, promote exports and boost growth and development .

“In clear terms, the following are the FG’s targets (through FTZs reform) as contained in the ERGP document:
.Boost manufacturing’s share of GDP to 20% by 2025,
• Create 1.5million jobs by 2025,
• Generate $30billion in annual export earnings by 2025,
• Improve the utilization of Nigeria’s factor endowments and comparative advantage by 2025,
• Create local models of global best practice in provision of hard and soft infrastructure and an enabling business environment

“In order to achieve these targets, the FGN launched the Made in Nigeria for Exports Project (Project MINE) in 2017 of which one of the key plans is to transform the 2 federally owned FTZs: Calabar and Kano FTZs into world class facilities through private sector investments. It is envisaged that the two FTZs when fully developed within a coherent, well designed and executed framework can deliver tangible outcomes like their counterparts in other climes where FTZs have contributed significantly to their economic development as mentioned above.
Furthermore, the advent of the African Continental Free Trade Area (AfCFTA) has also made it imperative that the two zones (owned by the Federal Government) are revived, reformed and transformed into world class standard to make them functional and globally competitive.

“Based on this, the Federal Government through the National Council on Privatisation (NCP) under the chairmanship of His Excellency, Vice President of the Federal Republic of Nigeria, Professor Yemi Osinbajo, GCON, SAN and of which I am a member approved the reform of Calabar and Kano FTZs through concession. The concession model is adopted to ensure that private sector investors with the requisite technical competence and financial capability that would emerge from a competitive transparent process are allowed to invest, operate and manage the facilities for certain number of years while the ownership remains with the Federal Government”

While giving the assurances of government that the necessary frameworks have been put in place to ensure transparency in the process, Otunba Adebayo announced the roll-out of incentives to willing investors, including import duty exemption and 100 percent ownership during the period they are in charge.

According to him, when the two Free Trade Zones are fully developed within a coherent, well designed and executed framework, they would help to deliver tangible outcomes like their counterparts in other climes, where such facilities have contributed significantly to economic development.

He noted that the advent of the African Continental Free Trade Area has also made it imperative that the two zones are revived, reformed and transformed into world class standard to make them functional and globally competitive.

“The event today is therefore a demonstration of the Federal Government’s commitment, desire and implicit confidence in the ability of private sector not to only reinvigorate Calabar and Kano FTZs, but to make them functional, competitive, explore the huge potential of AfCFTA to enable the country achieves rapid, inclusive and sustainable industrialization, create jobs, and diversify her export earnings”.

In her remark, the Minister of State for Industry Trade and Investment, Ambassador Marian Katagun, who was represented by the Director Industrial Development, Mr. Adewale Bakare ,stressed that the revival of the two facilities would significantly fast-fact employment generation , while leading to surge in revenue.

On his part, the MD Export Processing Zones Authority, Prof. Adesoji Adesugba , represented by a Director Mallam Muazu Mohammed, explained that Free Trade Zones is meant to be a private sector led initiative and that at the end of ongoing process, the 32 of such facilities in the country would be safely and profitably managed by the private sector.

The Director General , Bureau of Public Enterprises, BPE, Mr. Alex Okoh said so far, responses from the public on the process have been impressive.

The roadshow was organized by the National Council on Privatization through BPE in conjunction with Federal Ministry Of Industry, Trade and Investment, and Nigeria Export Processing Zones Authority.

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