The Nation Newspaper

Tag: NEPZA

  • FROM DELOS TO NEPZA (The story of Free Trade Zones)

    From available records, the world’s First Free Trade Zone (FFTZ) dates back to 166 BC, when Greece made the island of Delos a Free Port.

    The succeeding Roman Empire followed up with its Civitas Libera or Free Cities which were exempted from paying the annual tribute the reigning emperor, and allowed to mint their own coins and make their own laws.

    In the 12th Century, the Hanseatic League (a confederation of trading cities chartered and loosely governed by the Holy Roman Empire) revived the FTZ innovation, with the establishment of trading colonies in Northern Europe, among these Hamburg.  However, the closest innovation to the modern FTZ was the Steelyard in London, the UK, in the sense that it was a classic country within a country: separate, walled city, independent warehouses on the river as well as its own weighing house, Church, counting houses (banks) and residential quarters.

     

    ANCESTORS OF MODERN FTZS

    According to available records, the modern era of Free Zones appeared with European colonial outposts, formed as “quasi-sovereign sub-governments with unique trading privileges,” among them Macau (1557),Hong Kong (1842) and China, having over 80 Free ports or Port Treaties. The world has now about 4000 Special Economic Zones (SEZs).

     

    ENTER THE MODERN FTZs & NEPZA

    Although many people trace the advent of modern FTZs to the US with its launching of its Foreign Trade Zone (FTZ) program in 1934, the consensus is that the credit for the modern SEZ movement goes to Ireland, which set up the Shannon FTZ in 1959. The Irish innovation was so successful that other nations soon followed: Kandla FTZ in India (1960); Kaohsiung Export Processing Zone (KEXP) in Taiwan (1967); and an explosion of FTZS in China. In fact, China had moved from 0 special jurisdictions in 1980 to at least 300 today. For Nigeria, the dawn of FTZs came in 1992, with the enactment of Nigeria Export Processing Zones Act 63.

     

    NEPZA ATTRACTS ABOUT $80BN INTO ECONOMY

    From 1992 till April 2017, NEPZA had 34 FTZs spread across the country – two of the Federal Government-owned i.e. the Calabar Free Trade Zone (CFTZ) and the Kano Free Trade Zone (KFTZ). And under Jime’s one-year stewardship, the number of FTZs has climbed to 37.

    So, with 37 FTZS and well over 300 licensed Free Zone Enterprises (FZEs), NEPZA has attracted about $80billion into the national economy; and contributed to over 60 percent of the entire Foreign Direct Investment that Nigeria attracts.

    Some of the licensed FTZs include: the Nigeria International Commerce City also known as Eko-Atlantic ($38bn), with targeted job-creation put at one million; Centenary City ($18bn), with envisaged job opportunities at 70, 000; Ogidigben Industrial Park in Delta State ($15bn), estimated to create 800, 000 jobs; LADOL i.e. Lagos Deep Sea Logistic Base ($3.5bn), jobs targeted, 150, 000;   Maritime Economic Badagry City ($2.8bn), targeting 250, 000 jobs; Nasco Town Free Zone ($2,086bn), estimated to provide 15,000 direct jobs0; and the Badagry Creek Integrated Industrial Park ($1.3bn), target of 23, 000 jobs.

    Still others include: General Electric (GE) of the US ($1bn), hoping to employ 1000 people; Tomaro Industrial Park in Lagos ($450m); Quits Aviation Services Free Zone ($215m), and is estimated to provide jobs in their thousands; Ogogoro Industrial Park ($160m), estimated to employ 30, 000; and NAHCO FTZ ($22m), which plans to employ over 5000 upon completion.

     

    EMMANUEL JIME TAKES OFFICE

    Upon assumption of office on 19th April, 2017, the MD met some daunting challenges on ground, to wit:  Low staff morale, delayed promotions, inter-agency rivalry, poor investor-confidence, a dysfunctional governance structure, etc. Although his governmental experience was more on the legislative side, he knew he had to add value; and that, urgently. In other words, he had to hit the ground running.

     

    LOW STAFF MORALE: 

    Immediately upon assumption of office, Jime undertook a cross-country tour of all the FTZS in the country in order to get first-hand information on NEPZA operations from both investors and staff. And one of the recurrent themes in the mouths of staff was poor staff welfare. A welfarist at heart, Jime’s understanding of labour relations is that if you do not motivate a worker properly then you only waste your time in expecting that he’s going to be performing at the optimum capacity. As he tells people: “If there is welfare in the house, there would be no warfare.”

    So, what he did was to look within the limit of what was available in the office of the managing director and move quickly with the best advice from his management team.

    So, within a short time, NEPZA staff began to feel the impact of a staff-friendly leadership and one year after, the consensus is that NEPZA has turned the bend as far as staff welfare is concerned.

     

    DELAYED PROMOTIONS: 

    An integral part of staff-welfare is promotions as at when due. As at April 2017 when Jime took over at NEPZA, some people, who had been due for promotion, were stagnated, in some cases, for more than three years. What he did was to ensure that whoever was due for promotion was promoted. One year after, even the arrears that necessarily go with promotions have been cleared. As he told a distinguished audience lately: “We are not owing a single staff arrears arising from promotions or accumulated allowances, some going back to six years!”

     

    INTER-AGENCY RIVALRY:

    The next critical challenge was cementing the tenuous, and sometimes acrimonious relationship that exists between the Authority and sister-agencies of government like the Nigerian Customs Service (NCS), the Nigeria Ports Authority (NPA), Federal Airports Authority of Nigeria (FAAN) and the Nigeria Immigrations Service (NIS). It may not be public knowledge, but the successful operation of a Free Trade Zone depends on the synergy between it and other agencies of government operating therein, especially Customs. And the life-blood of NEPZA is Free Zones which she licenses and regulates.

    Something had to be done, and Jime did it: the Comptroller-General of the NCS, Col. Hameed Ibrahim Ali (retd), had paid a courtesy visit to NEPZA on November 2, 2015. Jime returned the courtesy on August 22, 2017, almost two years after!   He followed up with courtesy visits to all the Customs formations operating in all the Free Zones; he also paid working-visits to other sister-agencies like FAAN, the NPA and the like.

    Although NEPZA (and, by extension, the Free Zones), now has a seamless working relationship with the Customs in such a way that the zones are beginning to declare more profits, plans are advanced to hold an Inter-Agency Round-Table that will bring together all the industry stakeholders for a thorough inter-face on the Free Zone innovation.

     

    BUILDING INVESTOR-CONFIDENCE.

    Another thorny issue was surmounting the challenge of poor investor-confidence in the Zones. It was imperative, if not urgent, to get investors to have confidence in NEPZA’s Free Zones by way of a basket of incentives or a regime of tax holidays.

    Within a week of coming into office, the NEPZA CEO took a familiarization-tour of the Free Trade Zones, and discovered that although NEPZA had 34 FTZs, only about 12 or so were actively operating. And the chief reason for this was the dearth of infrastructure in the Zones.

    A Free Trade Zone essentially is actually a platform that is created so that companies can take advantage of the prevailing incentives that are offered by NEPZA in order to enable them function therein profitably.

    And one of the things that a FTZ is meant to provide, the world over, is a deliberately-incentivized environment wherein businesses can be run at less cost. And doing business at less cost means having world-class infrastructure in place: regular power supply, water, good roads, security of men, materials and investment in addition to a basket of incentives. If these infrastructural facilities do not obtain in a Free Trade Zone, then, it is not a Free Trade Zone. As Hon.  Jime said lately: “Capital is discriminatory, so it doesn’t go where it’s not wanted or welcome. You need to look beautiful to attract it. And this is why we intend to make our Zones world-class in terms of infrastructure.”

     

    REJIGGING NEPZA’S ADMINISTRATIVE & GOVERNANCE STRUCTURE:

    To drive his vision of turning NEPZA around and to take NEPZA in the direction of that vision, the MD realized that he had to rejig the administrative and governance structure of the Authority he met on ground. Some management staff had been in a place for close to 10 years without any movement. Of course, he effected massive transfers and reorganizations within the system. And today, the Authority is better for it.

    Jime speaks on this: “We have placed everybody appropriately, and we are better off in terms of competence, capacity, ability, value-adding, efficiency, productivity and organizational targets.” He adds: “In transferring, promoting or placing people appropriately, I didn’t look at faces or sentiments – I only looked at records and capacity.  And that is what I am still doing.”

    Elsewhere, where the concept has been clearly understood, it is changing the economic landscape in leaps and bounds. For instance, do you know that the whole of Dubai, in the United Arab Emirates, is a Free Trade Zone? Do you understand that Shenzhen, in China, which started just over 30years ago, with a population of less than 50, 000 people, right now has over 12 million residents? The reason for this is because the moment the government decided to give Shenzhen the cover of a Free Trade Zone, the incentives that were available, ensured that it took off, and it has now moved from less than 50, 000 people to over 12 million. And because of the runaway success of Shenzhen SEZ, the Chinese government is replicating the miracle in Xiongan, with plans to inject a whopping $580billion into the new SEZ in the next 20 years. This is how it is done.

    Most of us want to go to Dubai or Shenzhen on holidays, but nobody likes to ask the question: How did these cities get to where they are? So, the issue of investor-confidence is the one thing that is seriously riveting our attention.

     

    UNPRECENTED CAPITAL INJECTION OF N50BN:

    From Mr. President’s policy pronouncement and actions, it is evident that he is determined to leave Nigeria better than he met her. And one way he is doing this is via the Free Zones concept; with eyes on economic diversification, industrial growth, job-creation, local content development, technology transfer and acquisition etc. So President Muhammadu Buhari is not just concerned with kick-starting Nigeria’s long delayed industrial march, but interested in squarely putting her on the industrial map of the world.

    Prior to Emmanuel Jime’s appointment, Buhari had travelled to China in April 2016 and visited the FTZs in China, and returned with the zeal to boost Nigeria’s Trade Zones too. In the 2017 budget, therefore, Mr. President directed, for the first time in the history of NEPZA, for a massive capital injection of N50billion into NEPZA for the development of world-class infrastructure in the nation’s FTZs as well as for the creation of six new industrial parks in each Geo-Political Zone. Before now, the highest amount of money given to NEPZA was about N2billion.

    Work on infrastructural development, renewal and upgrading has started and the Calabar Free Trade Zone (CFTZ) as well as Kano Free Trade Zone (KFTZ), which are the two, publicly-owned FTZS, have already started seeing massive capital interventions towards the into the development of infrastructure.

    It is gratifying that in this 2018 too, from the budget estimates, the same amount of money has been provided for the Authority.

    With these ambitious plans to reposition the Free Zones to meet world-class standards, the hope is that, all things being equal, when we are done with our work in the Free Zones in Calabar and Kano by the end of 2018, investors in the CFTZ and would have no issue as far as power supply is concerned.

     

  • FROM DELOS TO NEPZA (The story of Free Trade Zones)

    From available records, the world’s First Free Trade Zone (FFTZ) dates back to 166 BC, when Greece made the island of Delos a Free Port.

    The succeeding Roman Empire followed up with its Civitas Libera or Free Cities which were exempted from paying the annual tribute the reigning emperor, and allowed to mint their own coins and make their own laws.

    In the 12th Century, the Hanseatic League (a confederation of trading cities chartered and loosely governed by the Holy Roman Empire) revived the FTZ innovation, with the establishment of trading colonies in Northern Europe, among these Hamburg.  However, the closest innovation to the modern FTZ was the Steelyard in London, the UK, in the sense that it was a classic country within a country: separate, walled city, independent warehouses on the river as well as its own weighing house, Church, counting houses (banks) and residential quarters.

     

    ANCESTORS OF MODERN FTZS

    According to available records, the modern era of Free Zones appeared with European colonial outposts, formed as “quasi-sovereign sub-governments with unique trading privileges,” among them Macau (1557),Hong Kong (1842) and China, having over 80 Free ports or Port Treaties. The world has now about 4000 Special Economic Zones (SEZs).

     

    ENTER THE MODERN FTZs & NEPZA

    Although many people trace the advent of modern FTZs to the US with its launching of its Foreign Trade Zone (FTZ) program in 1934, the consensus is that the credit for the modern SEZ movement goes to Ireland, which set up the Shannon FTZ in 1959. The Irish innovation was so successful that other nations soon followed: Kandla FTZ in India (1960); Kaohsiung Export Processing Zone (KEXP) in Taiwan (1967); and an explosion of FTZS in China. In fact, China had moved from 0 special jurisdictions in 1980 to at least 300 today. For Nigeria, the dawn of FTZs came in 1992, with the enactment of Nigeria Export Processing Zones Act 63.

     

    NEPZA ATTRACTS ABOUT $80BN INTO ECONOMY

    From 1992 till April 2017, NEPZA had 34 FTZs spread across the country – two of the Federal Government-owned i.e. the Calabar Free Trade Zone (CFTZ) and the Kano Free Trade Zone (KFTZ). And under Jime’s one-year stewardship, the number of FTZs has climbed to 37.

    So, with 37 FTZS and well over 300 licensed Free Zone Enterprises (FZEs), NEPZA has attracted about $80billion into the national economy; and contributed to over 60 percent of the entire Foreign Direct Investment that Nigeria attracts.

    Some of the licensed FTZs include: the Nigeria International Commerce City also known as Eko-Atlantic ($38bn), with targeted job-creation put at one million; Centenary City ($18bn), with envisaged job opportunities at 70, 000; Ogidigben Industrial Park in Delta State ($15bn), estimated to create 800, 000 jobs; LADOL i.e. Lagos Deep Sea Logistic Base ($3.5bn), jobs targeted, 150, 000;   Maritime Economic Badagry City ($2.8bn), targeting 250, 000 jobs; Nasco Town Free Zone ($2,086bn), estimated to provide 15,000 direct jobs0; and the Badagry Creek Integrated Industrial Park ($1.3bn), target of 23, 000 jobs.

    Still others include: General Electric (GE) of the US ($1bn), hoping to employ 1000 people; Tomaro Industrial Park in Lagos ($450m); Quits Aviation Services Free Zone ($215m), and is estimated to provide jobs in their thousands; Ogogoro Industrial Park ($160m), estimated to employ 30, 000; and NAHCO FTZ ($22m), which plans to employ over 5000 upon completion.

     

    EMMANUEL JIME TAKES OFFICE

    Upon assumption of office on 19th April, 2017, the MD met some daunting challenges on ground, to wit:  Low staff morale, delayed promotions, inter-agency rivalry, poor investor-confidence, a dysfunctional governance structure, etc. Although his governmental experience was more on the legislative side, he knew he had to add value; and that, urgently. In other words, he had to hit the ground running.

     

    LOW STAFF MORALE: 

    Immediately upon assumption of office, Jime undertook a cross-country tour of all the FTZS in the country in order to get first-hand information on NEPZA operations from both investors and staff. And one of the recurrent themes in the mouths of staff was poor staff welfare. A welfarist at heart, Jime’s understanding of labour relations is that if you do not motivate a worker properly then you only waste your time in expecting that he’s going to be performing at the optimum capacity. As he tells people: “If there is welfare in the house, there would be no warfare.”

    So, what he did was to look within the limit of what was available in the office of the managing director and move quickly with the best advice from his management team.

    So, within a short time, NEPZA staff began to feel the impact of a staff-friendly leadership and one year after, the consensus is that NEPZA has turned the bend as far as staff welfare is concerned.

     

    DELAYED PROMOTIONS: 

    An integral part of staff-welfare is promotions as at when due. As at April 2017 when Jime took over at NEPZA, some people, who had been due for promotion, were stagnated, in some cases, for more than three years. What he did was to ensure that whoever was due for promotion was promoted. One year after, even the arrears that necessarily go with promotions have been cleared. As he told a distinguished audience lately: “We are not owing a single staff arrears arising from promotions or accumulated allowances, some going back to six years!”

     

    INTER-AGENCY RIVALRY:

    The next critical challenge was cementing the tenuous, and sometimes acrimonious relationship that exists between the Authority and sister-agencies of government like the Nigerian Customs Service (NCS), the Nigeria Ports Authority (NPA), Federal Airports Authority of Nigeria (FAAN) and the Nigeria Immigrations Service (NIS). It may not be public knowledge, but the successful operation of a Free Trade Zone depends on the synergy between it and other agencies of government operating therein, especially Customs. And the life-blood of NEPZA is Free Zones which she licenses and regulates.

    Something had to be done, and Jime did it: the Comptroller-General of the NCS, Col. Hameed Ibrahim Ali (retd), had paid a courtesy visit to NEPZA on November 2, 2015. Jime returned the courtesy on August 22, 2017, almost two years after!   He followed up with courtesy visits to all the Customs formations operating in all the Free Zones; he also paid working-visits to other sister-agencies like FAAN, the NPA and the like.

    Although NEPZA (and, by extension, the Free Zones), now has a seamless working relationship with the Customs in such a way that the zones are beginning to declare more profits, plans are advanced to hold an Inter-Agency Round-Table that will bring together all the industry stakeholders for a thorough inter-face on the Free Zone innovation.

     

    BUILDING INVESTOR-CONFIDENCE.

    Another thorny issue was surmounting the challenge of poor investor-confidence in the Zones. It was imperative, if not urgent, to get investors to have confidence in NEPZA’s Free Zones by way of a basket of incentives or a regime of tax holidays.

    Within a week of coming into office, the NEPZA CEO took a familiarization-tour of the Free Trade Zones, and discovered that although NEPZA had 34 FTZs, only about 12 or so were actively operating. And the chief reason for this was the dearth of infrastructure in the Zones.

    A Free Trade Zone essentially is actually a platform that is created so that companies can take advantage of the prevailing incentives that are offered by NEPZA in order to enable them function therein profitably.

    And one of the things that a FTZ is meant to provide, the world over, is a deliberately-incentivized environment wherein businesses can be run at less cost. And doing business at less cost means having world-class infrastructure in place: regular power supply, water, good roads, security of men, materials and investment in addition to a basket of incentives. If these infrastructural facilities do not obtain in a Free Trade Zone, then, it is not a Free Trade Zone. As Hon.  Jime said lately: “Capital is discriminatory, so it doesn’t go where it’s not wanted or welcome. You need to look beautiful to attract it. And this is why we intend to make our Zones world-class in terms of infrastructure.”

     

    REJIGGING NEPZA’S ADMINISTRATIVE & GOVERNANCE STRUCTURE:

    To drive his vision of turning NEPZA around and to take NEPZA in the direction of that vision, the MD realized that he had to rejig the administrative and governance structure of the Authority he met on ground. Some management staff had been in a place for close to 10 years without any movement. Of course, he effected massive transfers and reorganizations within the system. And today, the Authority is better for it.

    Jime speaks on this: “We have placed everybody appropriately, and we are better off in terms of competence, capacity, ability, value-adding, efficiency, productivity and organizational targets.” He adds: “In transferring, promoting or placing people appropriately, I didn’t look at faces or sentiments – I only looked at records and capacity.  And that is what I am still doing.”

    Elsewhere, where the concept has been clearly understood, it is changing the economic landscape in leaps and bounds. For instance, do you know that the whole of Dubai, in the United Arab Emirates, is a Free Trade Zone? Do you understand that Shenzhen, in China, which started just over 30years ago, with a population of less than 50, 000 people, right now has over 12 million residents? The reason for this is because the moment the government decided to give Shenzhen the cover of a Free Trade Zone, the incentives that were available, ensured that it took off, and it has now moved from less than 50, 000 people to over 12 million. And because of the runaway success of Shenzhen SEZ, the Chinese government is replicating the miracle in Xiongan, with plans to inject a whopping $580billion into the new SEZ in the next 20 years. This is how it is done.

    Most of us want to go to Dubai or Shenzhen on holidays, but nobody likes to ask the question: How did these cities get to where they are? So, the issue of investor-confidence is the one thing that is seriously riveting our attention.

     

    UNPRECENTED CAPITAL INJECTION OF N50BN:

    From Mr. President’s policy pronouncement and actions, it is evident that he is determined to leave Nigeria better than he met her. And one way he is doing this is via the Free Zones concept; with eyes on economic diversification, industrial growth, job-creation, local content development, technology transfer and acquisition etc. So President Muhammadu Buhari is not just concerned with kick-starting Nigeria’s long delayed industrial march, but interested in squarely putting her on the industrial map of the world.

    Prior to Emmanuel Jime’s appointment, Buhari had travelled to China in April 2016 and visited the FTZs in China, and returned with the zeal to boost Nigeria’s Trade Zones too. In the 2017 budget, therefore, Mr. President directed, for the first time in the history of NEPZA, for a massive capital injection of N50billion into NEPZA for the development of world-class infrastructure in the nation’s FTZs as well as for the creation of six new industrial parks in each Geo-Political Zone. Before now, the highest amount of money given to NEPZA was about N2billion.

    Work on infrastructural development, renewal and upgrading has started and the Calabar Free Trade Zone (CFTZ) as well as Kano Free Trade Zone (KFTZ), which are the two, publicly-owned FTZS, have already started seeing massive capital interventions towards the into the development of infrastructure.

    It is gratifying that in this 2018 too, from the budget estimates, the same amount of money has been provided for the Authority.

    With these ambitious plans to reposition the Free Zones to meet world-class standards, the hope is that, all things being equal, when we are done with our work in the Free Zones in Calabar and Kano by the end of 2018, investors in the CFTZ and would have no issue as far as power supply is concerned.

     

  • NEPZA chief: Ayade Industrial Park best to be conceived by any govt

    The Managing Director, Nigeria Export Processing Zone Authority (NEPZA), Mr. Emmanuel Jime, has described Ayade Industrial Park, Cross River State as the best to be conceived by any state government.

    He spoke in Calabar, the state capital after he alongside members of the management team, embarked on-the-spot inspection of the industrial park situated along Goodluck Jonathan Bypass.

    He said: “If you ask me, and without being immodest, I will say this is the best industrial site that has been conceived by a state government during my time as the MD of NEPZA. If I have my way, I would have granted this licence that is demanded, unfortunately, it is not entirely in my capacity to do this.”

    Jime who intimated that President Muhammadu Buhari will have to put his pen to paper in order to grant the park an EPZ status, added that, his job will be to make a compelling case for the award of the licence, even as he assured Cross Riverians that “as far as I can see, all the requirements that need to be in place are already in place and we can tick all the boxes  believing that this industrial park has satisfied all of those boxes, therefore there is no reason on earth why the license will not be granted.”

    Explaining that the inspection was normally a duty performed by officers under the line, the MD said the importance attached to the edifice spurred him to personally do the inspection. “I have come, I have seen and I have to say that I am totally blown away and really impressed by what I have seen here,” he said.

    Jime who commended the Prof Ben Ayade’s leadership role especially in industrialising the state, said: “The desire and passion that the governor has shown with regards to the industrialisation of this place will flourish and have the kind of expression that we think it can have.”

    Reiterating his earlier resolve that Ayade Industrial Park merited an EPZ status, the MD said: “I have come here like I said and have seen tremendous deployment of equipment in terms of science and technology that is available to us. The solar power that is being instituted here is new and clean and I believe that it is innovative as far as Africa is concerned.”

    Jime said after speaking to the engineers on site, he got convinced that once the solar power was in place, one was not likely to experience any power outage in the next 30 years, adding that being close to an international airport and the Atlantic Ocean,  was an added advantage to the industrial park.

  • NEPZA licenses three FZs, nets $2.8b

    • Clears air on budget padding allegation

    Nigeria Export Processing Zones Authority (NEPZA), has licenced three new Free Trade Zones (FTZs), the Managing Director, Emmanuel Jime, has said.

    In a statement, NEPZA’s  Head Corperate Communication, Simon Imobo-Tswam , said the MD made this known in his Christmas Message.

    He listed the new FTZs to include, Nasco Town FTZ; Quit Aviation Services FTZ and Tomaro FTZ.

    He  besides the over $2.751billion coming in as Foreign Direct Investment (FDI) inflows, the new FTZs are targeting direct jobs in excess of 50, 000.

    He said, “Under my stewardship, we have been able to licence three new industrial parks, including Nasco Town Free Zone, which is valued $2,086billion. It is estimated at completion to be able to provide 15,000 direct jobs.

    “The second is Quit Aviation Services Free Zone, valued at $215million, and is estimated to provide jobs in their thousands. And there is: Tomaro Industrial Park, in Lagos, valued at $450million. It would also provide jobs running into the thousands.”

    He listed some of the challenges to include low staff morale, inter-agency rivalry, delayed promotions and poor investor-confidence, saying, “I have been able to make impact with support from the cooperative management team.”

    Jime used the occasion to refute reports that the Authority padded its 2018 budget estimates.

    His words: “I wish to state clearly, categorically and emphatically that any story about a padded budget, or a bloated personnel cost by the Authority is false and misleading. NEPZA has neither padded her budget proposal, nor bloated its personnel cost!

    “Although the stories mentioned figures here and there, both failed to state clearly that the figures were queries from the Distinguished Senators to which the NEPZA leadership gave clear, detailed and satisfactory explanations.

    “It is true that the Personnel Cost in NEPZA’s 2017 budget is N638million and the proposed budget for 2018 is N710million, but it is grossly incorrect to insinuate, or suggest that the ‘budget was over bloated’ or to state that ‘there is a N205million surplus discovered’ in the 2018 budget estimates of NEPZA.

  • ‘Only 14 of 34 free trade zones functional’

    ‘Only 14 of 34 free trade zones functional’

    The Managing Director, Nigeria Export Processing Zones Authority (NEPZA), Mr. Emmanuel Jime, has said only 14 out of 34 free trade zones in the country are functional.

    Speaking with reporters in Abuja yesterday, he blamed this on the dearth of infrastructure in the country.

    Jime said the President Muhammadu Buhari’s led administration was determined to change the fortunes of the free trade zones in the country.

    The NEPZA chief lamented that most foreign investors preferred Ghana to Nigeria because of the shortage of infrastructure in the country.

    He called on Nigeria to develop its infrastructure in order to attract foreign investors.

    According to him, Nigeria’s huge population alone is not enough to attract foreign investors.

    “When I came into office, I took a tour of all the free trade zones in the country. As at the last count, we have 34 free trade zones , but in truth less than 14 of those free trade zones are operating maximally,” he said.

    He said  for Nigeria to complete with other countries, adequate amenities must be provided at the zones.

    “One of the things a free trade zone is meant to provide is an environment in which business can be done at a less cost. For you to do business at a less cost, it means there ought to be things in the free trade zone that are not found elsewhere. “We are talking about infrastructure. There has to be power for 24 hours, otherwise it is not a free trade zone. There has to be water. We have got have road network.

    “Most of the investors, who want to come to Africa, the first thing they think about is Ghana. That must call for a great concern for us. I hear a lot of people say Nigeria has a huge market. We are getting to 200 million.

    “We keep talking about how big Nigeria market is, but we have to recognise that there are partnerships and platforms that have been put in place that will enable a businessman put up his factory in Accra and still access the Nigerian market,” he said.

    Jime cited the United States’ African Growth and Opportunity Act (AGOA) and the Economic Community of West African States (ECOWAS) as examples of platforms, through which goods manufactured in Ghana could get into the Nigerian market.

    The NEPZA boss said that since assumption of office, the relationship between the authority and other agencies such as the Nigeria Customs Service and the Nigerian Immigration Service had improved.

    Jime stated that there was no way free trade zones could function effectively if there was no “good synergy between NEPZA and relevant government agencies.”

    Jime said that Tinapa in Cross River, which ordinarily ought to be one of the best free trade zones in the world, was not functional because of the misunderstanding of the roles of NEPZA and customs.

    He stated, “Right now, there is a particular zone in Cross River, called Tinapa. If you have been to Tinapa many years ago, go there now, it is literally dead. It is a big stain on our country and our capacity to do things the right way.

    “There is simply no reason why Tinapa should not be at its best as other free trade zones, but here, because of Customs’ intervention, which most of the time arose from misunderstanding of how the two agencies are supposed to work, Tinapa is literally dead.”

    He faulted a claim that free trade zones were being used as conduit for smuggling. According to him, free trade zones have customs formations.

    Jime said no goods could leave any free trade zones without the awareness of customs.

    The NEPZA boss said the morale of workers of the authority had been boosted through the payment of the arrears of their allowances.

    “As of 2017, no single member of NEPZA staff is owed promotions. Nobody is owed arrears of salaries and allowances,” he stated.

    He added: “We have not reached the point where we should be, but we can say we are moving in the right direction.

    “We will not be guided by sentiment. I don’t look at faces. I look at capacity. What we have done in terms of structure in NEPZA right now is to move people around.”

  • NEPZA: Workers welfare key to industrial harmnony

    NEPZA: Workers welfare key to industrial harmnony

    The Managing Director, Nigeria Expot Processing Zone Authority (NEPZA), Emmanuel Jime has said the welfare of workers is crucial to ensuring industrial harmony.

    He spoke when the Association of Senior Civil Servants of Nigeria (ASCSN) paid the NEPZA chief courtesy visit in Abuja at the weekend.

    He said: “Providing incentives to workers is a critical ingredient in harmonious relations between management and labour.

    “Staff welfare is my top priority. I want it on record. This is why I followed up my promise in Calabar by challenging the management team to bring out creative ways of improving staff welfare. We will take the bull by the horns, and walk the talk.  I met happy staff here, and we must keep them smiling.”

    Speaking, the union’s Secretary-General, Comrade Isaac Ojemhake said the union heard about the new managing director’s salutary moves in repositioning both the Authority as well as its workforce, and had come to fully identify with him.

  • Govt’s industrial centres coming

    Govt’s industrial centres coming

    The Federal Government is set to establish Satellite Industrial Centres (SICs) across the six geo-political zones of the country.

    The establishment of these industrial centre, which will be anchored by the Nigeria Export Processing Zones Authority (NEPZA),  is expected to commence immediately after the passage of the 2017 budget.

    Managing Director, NEPZA, Mr Emmanuel Jime, who spoke in Lagos said the establishment of these centres will serve as a catalyst toward the diversification of the economy and the promotion of backward integration.

    He said: “The present administration desire is for the economy to fully diversify  and this is the reason why the president has ordered the creation of the Satellite Industrial Centre in the six geo-political zone across the country.

    “And for this to happen, NEPZA has been given the directive to anchor this and this will take effect as soon as the budget is pass.”

  • OGFZA, NEPZA Bills: Matters arising

    The ongoing efforts by the Na tional Assembly (NASS) to amend the princi-pal Acts that established both the Oil & Gas Free Zones Authority (OGFZA) and the Nigerian Export Processing Authority (NEPZA) have expectedly attracted a lot of public debate. Sadly though, a good deal of the commentary is based on fantasy, deliberate distortion, half-truths and downright falsehood.

    There is therefore a crying need to separate facts from fiction in the matters of the NEPZA and OGFZA amendment bills as well as the broader issue of the existence of the two agencies of government, OGFZA and NEPZA, with responsibilities for regulating oil-related and non-oil-related free zones.

    As pointed out earlier, the trajectory and tenor of public discourse on the issue, particularly since public hearings were held on the amendment bills, have pointed to so much ignorance and deliberate mischief. We think the facts should be outlined.

     

    Need for amendment

    The two laws, NEPZA Act of 1992 and OGFZA Act of 1996 are both creations of the NASS. Both laws have been in existence for 25 and 21 years respectively, during which they have been found to be overdue for review in order to get rid of areas of imperfections with regard to ambiguity, overlap, and inadequacy in the face of new realities not anticipated at the time the laws were drafted. These are some of the reasons these two laws are put up for amendment.

    There is nothing peculiar that these two laws stand in need of review. No law is perfect. That is why national constitutions that are centuries old are still subjected to amendments to bring them in line with new realities.

    Besides, the NASS ought to be commended, not vilified, for proposing the amendments to strengthen the two agencies, OGFZA and NEPZA, for better performance in the overall interest of the nation. We see the move by the NASS to amend the laws as a step in good faith that is consistent with government policy of diversification and drive for foreign direct investment, additional windows for foreign exchange and job creation. That is why it is hard to understand why an investor like Nigerdock would go to court to stop the NASS from exercising its powers of lawmaking under the Constitution. Whose interest are Nigerdock and their ilk serving?  No investor of any hue should be allowed to dictate to Nigeria on the regulation of businesses within its borders.

     

    Naysayers

    What is remarkable about the public debate, as indicated earlier, is the paucity of argument intended to improve the legislative process on the way to the desired amendment. Rather, what is noticed is blind opposition to the OGFZA bill, with the most unfortunate argument that amending the OGFZA law would create a monopoly, drive away foreign investors, undo NEPZA (the zero sum game argument, that your gain is my loss). There is also a related but equally puerile argument that the OGFZA law should not be amended “because OGFZA resorted to self help by adding ‘s’ to the ‘zone’ in its name to read Oil and Gas Free Zones Authority, and that OGFZA was created to regulate the Onne Oil and Gas Free Zone only.

    It is important to address these contrarian positions. The change from singular ‘zone’ to the plural ‘zones’ in OGFZA’s name was a gazetted proclamation of government. In any case, taking the law in its entirety, it becomes clear that the obsession with its title is obviously indulging in air splitting, given the provision of section 5(2) of the Act which states: “The Authority shall have the power to take over and perform such other functions being hitherto performed by the Nigeria Export Processing Zones Authority as they relate to the export of oil and gas from any of the Nigeria Export Processing Zones established by the Nigeria Export Processing Zone Authority Act.” It is clear from section 5(2) of the Act that the intention of the drafters of the law was not to limit OGFZA to one free zone.

    There is a problem too in NEPZA’s name. In the NEPZA Act, the ‘zone’ in the title of the agency is in the singular, yet NEPZA regulates more than one free zone. Besides, NEPZA is not involved in regulating export business, yet it is supposed to be a regulator of an export processing zone.

    The untidiness in the letter of the two laws is one of the imperfections that the amendments intend to correct. So it is mischievous to oppose such a move; and much more so when the opposition is only to the OGFZA bill, without any reasonable ground.

    The position of those opposed to the amendment of the OGFZA Act and the very existence of the agency is actually absurd. They insist that OGFZA and what it does are not tenable because its principal Act has flaws. Then the NASS takes steps to amend the law and remove the flaws, but they oppose that too. So what do they want? In whose interest are they posturing?

    The monopoly argument is actually an egregious insult to the intelligence of Nigerians. Those who push it have not explained how amendment that strengthens a regulatory agency would create a monopoly.

    As said earlier, both OGFZA and NEPZA are creations of the law. None is superior to the other, yet the NEPZA amendment bill seeks to abolish OGFZA. It is curious that the naysayers are not raising the red flag there. Why would one agency of government seek to abolish another, especially when there is a Government White Paper that affirms the autonomy of OGFZA against the recommendation of the Orasanye Commission to merge OGFZA and NEPZA?

    The argument that allowing the amendment of the OGFZA Act would turn away foreign investors who are negotiating entry into the Nigerian market through NEPZA or who have been licensed by NEPZA is at best sophomoric. The structures of government change all the time without impairing existing contractual obligations or those under negotiation. The argument about threat to FDI is akin to saying that contracts that were entered into by the former ministry of mines and power have been invalidated because the ministry has been reconfigured and is now under the Federal Ministry of Power, Works and Housing. Some freshman thesis!

    Without doubt, there were legitimate concerns with some provisions in the bill. Specifying in the bill the terminals where cargoes could be loaded and discharged and the listing of oil and gas free zones in the Act were wrong-headed. Such provisions, if allowed, could lead to restriction of trade and run counter to the policy on the ease of doing business. With credit to OGFZA, its memo to the NASS, presented by its managing director, Mr Umana Okon Umana, at the public hearing on the bill on 26 January 2017, is that the issue of the location of terminals and number of free zones should be left open to be dealt with administratively. The sponsor of the bill, Sen. Abubakar Gobir, agreed. So no one is in support of those restrictive provisions and they cannot become part of the new law.

    Opposition to the OGFZA bill also worries that it is not clear what constitutes oil and gas activity. In response to that question of ambiguity, a technical committee is already at work to address the matter.

     

    Specificity

    OGFZA was created to address specific needs of the oil and gas sector, which an omnibus agency was ill-suited to tackle. Those who want OGFZA scrapped elect to live in denial of this reality. All over the world special vehicles are designed to address specific problems. That is why there are specialised free zones in the UAE, Ireland, China, etc. And as Dr Chris Asoluka, former chair of OGFZA board said in a recent TV interview, even in Nigeria the EFCC had to be created to replace the E-Branch of the Nigeria Police to meet the specific need of fighting financial and economic crimes which the Police Force as a whole wasn’t well adapted enough to tackle.

     

    Unfounded fear

    If anything, the imperative for a specialised agency to address the specific needs of the oil sector is truly, truly urgent now that NEPZA is going to be saddled with the management of six Special Economic Zones soon to be established as provided for in the 2017 budget. That is a huge responsibility, and NEPZA would be wise to gird its loins for the herculean task ahead, instead of dissipating energy on unfounded fears.

    In deed the fear that if OGFZA is allowed to exercise its mandate according to law investors in other free zones would be subjected to the dictates of Intels, which is just another investor, is fallacious. Intels, like other free zone businesses, is subject to the regulatory control of OGFZA, not otherwise.

    Thus all things considered, the campaign of disinformation and calumny by paid agents of vested interests against the NASS for doing its work, and against OGFZA for seeking to achieve its mandate within the law is misplaced and unpatriotic. It should stop. NASS should not be intimidated. Agents of inertia that have paralysed the Calabar and Kano Free Zones should not be allowed to halt the nation’s match to economic prosperity.

    …Adebiyi is a Lagos-based public commentator

  • OGFZA vs NEPZA

    •It’s impunity to restrict OGFZA to Onne

    The disagreement over the statutory powers of the Oil and Gas Free Zones Authority (OGFZA) and the Nigeria Export Processing Zones Authority (NEPZA) should end, as the provisions of the respective acts establishing the agencies are clear. While the NEPZA is empowered to issue licences and regulate general export processing zones, the OGFZA is specifically given powers with respect to only oil and gas export processing zones. To argue otherwise is specious and we urge relevant agencies and practitioners to abide by the extant laws and regulations.

    Specifically, section 5(2) of the OGFZA Act states that “The Authority shall have power to take over and perform such other functions being hitherto performed by NEPZA as they relate to export of oil and gas from any of the Export Processing Zones established by Nigeria Processing Zones Act.” So, if the report that NEPZA is contesting the clear provisions of the law, or that the agency is siding with some other oil and gas free zones to disobey the law is correct, then we urge relevant agencies of government to hold them to account.

    We agree with the view of the Managing Director of OGFZA, who in a communication sent to stakeholders in the oil and gas free zones demanded that they submit to the regulation of the agency, in accordance with the act. That directive is in tandem with the Federal Government’s directive as contained in the Extraordinary Government Gazette No. 12 (vol. 101) of February 2014, entitled “Free Zones (Monitoring & Regulations) Order 2014.” The provisions of the gazette are clear on the powers of OGFZA and it would be strange if government officials prevaricate on enforcing the provisions of its laws and regulations.

    Section 1(a) and (b) of the gazetted order, states as follows: “As from the commencement of this Order, the Authority (OGFZA), in addition to its functions under the Act, shall be responsible for the: (a) Licensing of all Oil and Gas Free Zones located within the Customs territory; and (b) Publication of all operating standards to be observed in the Free Zone from time to time.” Unless the government is encouraging a neglect of its own regulation, the oil and gas companies yet to come under the purview of the above provision should be called to order.

    It is untenable to want to restrict OGFZA to one place, that is Onne, because of the meaningless absence of ‘s’ in the word ‘Zone’ in its name. Its forte is not Onne but oil and gas. It is not set up for restricted geography but restricted product: oil. Wherever there is oil and gas, it has legitimacy in the country.

    Again, there is the uncontroverted report that ‘the Government White Paper on the Presidential Committee on Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies of March 2014 upheld the autonomy of OGFZA and confirmed the mandate of OGFZA “to regulate Oil and Gas Free Zones in Nigeria.”’ Furthermore, that the Federal attorney general in 2008 also gave his interpretation thus: “Consequently, the Nigeria Export Processing Zones Authority is expected to concentrate on its functions as provided for in section 4 of the Act while Oil and Gas Free Zones Authority should have jurisdiction over Oil and Gas Free Zones in Nigeria”.

    Unless other stakeholders are able to countermand the information in the public domain, the directive of the Managing Director of OGFZA, Mr Umana Okon Umana, by his letter of November 17, 2016, to the Managing Director of Lagos Deep Offshore & Logistics Services Limited (LADOL) and the Managing Director of Snake Island Integrated Free Zone (SIIFZ), that OGFZA has “decided to carry out the full implementation of the law and (Federal Government) directives” which vest control of the oil and gas free zones within the country in OGFZA, should be obeyed.

    The alleged effort to differentiate LADOL and SIIFZA as an engineering concern, instead of an oil and gas free zones, amounts to a mere hair splitting argument.

  • Crisis in NEPZA over leadership tussle

    Crisis in NEPZA over leadership tussle

    The Nigeria Export Processing Zone Authority (NEPZA) is in confusion over the leadership of the agency since the tenure of the Managing Director, Olugbemiga Kuye, expired on the 24th of December 2016.

    The confusion arose from the alleged refusal of Kuye to officially hand over to the most senior director in the agency.

    Kuye was appointed Managing Director of NEPZA on the 12th December 2012 and his tenure expired on the 24th December 2016.

    The enabling law says he should give the federal government a month notice before proceeding on leave but he did not.

    “The NEPZA Act section 63 reads “obedience and compliance to rules and regulations. The President Commander of the Armed forces from time to time by order upon recommendation of the NEPZA established under this decree designate such area as he thinks fit to be an export zone.

    “The zone established pursuant to subsection 1, may be operated and managed by the public. Private or a combination of private entity under the supervision of and with the approval of Nigerian export processing zone authority.

    The Public Relations Officer, Mr. Richard Obiano, while speaking with The Nation in telephone conversation said he is not aware of the alleged expiration of the MD’s tenure, stating that it is best we speak with the acting MD.

    According to the acting MD, David Unongo, he is only standing in for the MD who is on leave and will be back soon. Unongo said he is not aware that the tenure of Kuye is over.

    He said, “I am not aware of what you are saying, as you can see, I am only standing in for the MD who is on leave. I don’t know if his tenure is over or not.”

    Staff of NEPZA in the information department refused to offer further information on the matter.

    In the ministry, the Special Assistant to the Minister of Industry, Trade and Investment, Constance Ikokwu, referred The Nation back to NEPZA saying the minister has nothing to say on the issue.

    But the staff of the organisation are concerned that since the MD left office, no one has been able to open the office because he has not given them the code to the device that opens the office.

    The Ministry of Industry, Trade and Investment, which spoke through the Special Assistant to the Permanent Secretary, Babajide Ilotogun, said it is only the presidency, through the office of the Secretary to the Government of the Federation that can bring in a substantial MD, or extend the tenure of Gbenga Kuye as the MD of NEPZA.