NEPZA’s complicity in frustrating foreign investments in free zones

The Nigeria Export Processing Zones Authority (NEPZA) prides itself as the “choice destination for global business and investment,” but its activities over the years have frustrated the inflow of foreign investments into the free zones it regulates.

Indeed, its core mandate is to “establish, license, regulate and operate highly efficient Free Zones by providing a highly competitive incentive scheme, excellent support facilities and service for the purpose of creating an enabling environment for export manufacturing and other commercial activities.”

But rather than licensing investors to operate in the free zones so as to create employment opportunities, boost Nigeria’s Gross Domestic Product (GDP), generate revenues for Nigeria and improve Nigerian economy, NEPZA appeared to have colluded with Nigerian companies to frustrate foreign investments and create monopoly at the free zones.

To attract investments into the country, the federal government has set simple requirements for licensing free zones by NEPZA.

These requirements include payment of $1,000 or its Naira equivalent to NEPZA as application fee; submission of application letter, indicating interest to establish a zone and its location, and relevant documents;  as well as the inspection of the proposed site by NEPZA officials.

After the completion of these processes, the recommendation for approval will be passed to the Minister of Industry, Trade and Investment by NEPZA; and then to the President by the minister for final approval.

The president’s approval or comments is then communicated back to the investor by NEPZA.

Even though these requirements are simple, investors who had wanted to be licensed have had their fingers burnt in the process of dealing with NEPZA.

Despite the efforts of President Muhammadu Buhari administration, through Vice President Yemi Osinbajo, to eliminate the bureaucratic bottlenecks that hinder the ease of doing business in the country, NEPZA’s notoriety in colluding with local investors to create monopoly has made it difficult for foreign investors to bring in the much-needed investments.

NPA and the federal government had successfully had intel’s monopoly broken in the free zone.

It was then LADOL, which had taken Intel’s role; and NEPZA enabled another company to practice monopoly against the efforts of the federal government and NPA.

As the regulator of the zone, NEPZA is expected to call off LADOL’s bluff and end its reign of impunity in the free zone.

But NEPZA has operated like an agent of LADOL and has aided the free zone manager to frustrate foreign investors out of the zone.

A good example is Africoat an American company, which demonstrated faith in Nigeria’s operating environment and invested in LADOL but was forced to leave the zone, after losing contract opportunities from Chevron, ExxonMobil and other multinational oil companies.

Local and foreign investors in the free zones across the country are of the view that the alliance between NEPZA and LADOL is not ordinary.

While the Nigerian Ports Authority (NPA), as the landlord of the free zones, is creating a level-playing field for investments to thrive, NEPZA is aiding LADOL to create a hostile environment that will not allow investments to survive.

There are foreign investors who are willing to invest in LADOL free zone but the experience of Africoat has scared them.

Apart from Africoat, only one foreign investor defied all odds pushed by LADOL and committed multi-million dollars in the zone.

With this, the zone successfully carried out the fabrication and integration works on the Egina FPSO project.

After the Egina success story, the zone has become well-positioned for the execution of many challenging upcoming projects, which will add reasonable value to the Nigerian economy.

Some of these projects include the Bonga South West project and the upcoming projects on NLNG Train 7.

But will NEPZA and LADOL allow these projects to be executed in the free zone to create opportunities for Nigeria?

Why is NEPZA helping LADOL to sack investors from the free zone when LADOL does not have the capacity to execute these projects?

Indeed, LADOL has no capacity to execute projects but can only provide water, electricity and transport facilities for the zone operators.

To reciprocate NEPZA’s gesture of allowing it to manage the free zone with impunity and highhandedness, the Managing Director of LADOL, Dr. Amy Jadesimi was quoted on the NEPZA website as saying that  “Nigeria is the hope of Africa, and LADOL aspires to give that hope by creating an industrial platform… this is the path to getting Nigeria into the G20 and NEPZA’s role in that direction is crucial.”

The question is: Where is the industrial platform created by LADOL? What has LADOL done to get Nigeria into G2O, apart from cancelling the leases of investors and dragging them to courts to force them out of the zone?

However, analysts have blamed LADOL’s impunity on the failure of NEPZA to call it to order due to their alleged collusion.

The fear being expressed by investors is that if the federal government doesn’t caution NEPZA to stop LADOL’s monopoly in the zone, the Bonga South West project and the NLNG project may be executed outside the shores of Nigeria at the detriment of the Nigerian economy.

…Suleiman writes from Abuja