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Government to review free trade zones’ incentives for competitiveness


Minister of Industry, Trade and Investment, Dr Okey Enelamah,

The Nigeria Industrial Council and Competiveness Advisory Council has moved to review fiscal arrangements and incentives applicable to the country’s free trade zones (FTZs).

Speaking on last week’s meeting of the Council, its Vice Chairman, who is also the Minister of Industry, Trade and Investment, Dr. Okey Enelamah, said the Council has been working to review the fiscal arrangements and incentives available to operators in the zones vis-a-viz the custom territory with the view to ensuring competitiveness of goods produced in the FTZs in the local and export markets.

According to a statement from the Strategy and Media Adviser to Enelamah, Bisi Daniels, approved enterprises within FG-owned FTZs are entitled to the following incentives: Exemption from legislative provisions pertaining to taxes, levies, duties and foreign exchange regulations; full repatriation of foreign capital investment with capital appreciation of the investment at any time; up to 100 per cent of foreign ownership allowable; and no import or export licences required for operations; among others.


A study by the Council, according to Dr. Enelamah, has identified some areas that need redress.

“For example, manufacturers outside the zones have complained about unfair competition as the tax concessions available to FTZ operators do not take into cognizance the fact that up to 100% of goods produced in the free zones can be sold into the Nigeria customs territory; inadequate definition of value addition and certification; and cash flow advantage to free zone operators who pay duties on constituent raw materials equivalent of finished goods after production and processing, while manufacturers outside the zones pay duties and other relevant levies upfront”, he added.

“However, in the study, free zone operators raised concerns over their inability to effectively compete in the export market, high administrative charges on turnover and exclusion from export incentives.

“To address these issues and others affecting the efficiency of the free zones, a technical committee comprising representatives of the Nigeria Export Processing Zones Authority (NEPZA), Nigeria Export Promotion Council (NEPC), Nigeria Investment Promotion Commission (NIPC), the Federal Ministry of Finance (FMF), the Federal Ministry of Interior (FMI), the Central Bank of Nigeria (CBN), the Nigeria Customs Service (NCS), the Standards Organisation of Nigeria (SON) as well as selected operators will be set up to review and recommend appropriate fiscal and operational changes to the free zones to ensure that goods produced in the free trade zones are competitive in the export market and that concerns around unfair competition in the Nigeria Customs Territory from goods produced in the free trade zones are addressed.

“Also, future licensing of free trade zones should be closely linked to priority sectors for industrialization and export growth; while NEPZA is to implement comprehensive measurement and certification guidelines and monitoring mechanisms for determining value addition for each prohibited item”, the statement read in part.

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