The Nation Newspaper

Tag: Trade zone

  • Trade zone hails oil and gas logistics services policy review

    Following President Muhammadu Buhari’s recent approval of a policy review in the nation’s oil and gas logistics services sector, Snake Island Integrated Free Zone (SIIFZ) has applauded the bold step taken by Federal Government to create a level-playing ground in the industry.

    SIIFZ, one of Nigeria’s free zones operators, described the policy review as a catalyst designed to boost operations, eliminate the entrenched monopoly and remove bottlenecks that had inhibited development over the years.

    According to the Chairman of Snake Island Integrated Free Zone (SIIFZ), Alhaji Abdulahi Yusufu, the Federal Government deserves commendation for ensuring that a practical approach and well informed decision was taken to address the deep-rooted problems affecting the growth and development of the oil and gas logistic services.

    He said: “Free zones operators, investors both local and foreign, terminal port operators will henceforth experience relief while the enormous economic potentials of the sector will positively impact on the economy because of the policy review. The policy guarantees importers ‘the right to choose terminals or ports of their choice for the discharge of their cargo.’ This hitherto was impossible due to the monopolistic advantage enjoyed by Intels.”

    The SIIFZ Chairman recalled that free zones stakeholders and ports terminal operators earlier this year had raised alarm against the proposed Bill to amend the Oil and Gas Export Free Zone Authority (OGEFZA) which if passed could have entrenched Intels’ monopoly in the sector.

    The policy review note that: “His Excellency, the President of the Federal Republic of Nigeria, has conveyed approval on 21st April, 2017 to the Honourable Minister of Transportation on the final position in the following terms:

    “FGN remains guided by the general global practice in the designation of Terminal/Ports operations into three broad categorisations of bulk cargo, container cargo and multipurpose cargo. Accordingly, the FGN rejects the categorisation of oil and gas multi-purpose cargo terminal, as this is alien to the relevant concession agreements and inconsistent with global shipping practices…

    “FGN reaffirms past presidential directives that all importers are free to choose any terminal or port for the discharge of their cargoes, subject to the presence of all requisite regulatory agencies at such ports as required by extant regulations and in line with its policy of promoting competition and value for money. Consequently, any policy that designates certain ports by cargo type is cancelled.”

    The SIIFZ expressed appreciation to the FG, its commitment to attract Foreign Direct Investment (FDI), build investors’ confidence and establish the ease-of-doing business in Nigeria through policy review.

     

  • Whither Nigeria’s Free Trade Zone scheme?

    For many years, Nigerian leaders have paid lip-service to the diversification of the economy; instead, there has been a near-total reliance on oil to finance the country’s development needs. Some have argued for more consistent investment in the agricultural sector, which is achievable because of the country’s agricultural potentials. In the years before and immediately after independence, the three regions relied heavily on agriculture to finance their development projects. The famous groundnut pyramids in the North, the cocoa plantations in the West and the oil palm plantations in the East provided the necessary funds for giant strides recorded by the leaders of the three regions in various sectors.

    But oil came and everybody went berserk. The impact of Nigeria’s near-total reliance on the black gold was tremendous and catastrophic for the economy. The farms were no longer lucrative because oil money came easy. It was not long before every other productive sector, including manufacturing, was abandoned in favour of oil wells and the unimaginable wealth that came with them. Successive governments behaved as if oil and its enormous wealth would be there forever, and that other needs of Nigerians, including food and manufactured goods would continue to be imported from countries that ordinarily are less endowed in natural resources.

    From the experience of past years, Nigerians often clamor for diversification of the economy in times of economic downturn only for their voices to peter out at the first signs of bloom. That appears to be the fate of the Nigeria Export Processing Zones Authority, NEPZA, which was established by the military government, November 19, 1992, with the aim of accelerating the pace of economic growth in the country. On March 29, 1996, the federal government also established the Oil and Gas Free Zone at Onne. Clay-footed from the onset, it took another nine years before the Calabar Export Processing Zone was commissioned in 2001.Thereafter, everybody, including policy makers and implementers of the scheme went to sleep.

    Is it not ridiculous that more than 23 years after the scheme was established, very little is known about its operations? There has been very little effort at producing enough literature to guide stakeholders, prospective investors, policy makers and implementers on the viability or otherwise of the scheme. I was therefore surprised to chance on a book, A Review of Nigeria’s Free Trade Zone Scheme, which was co-authored by Chidi Nzerem and Oche Obe. The book highlights the potential benefits of the free trade zone scheme and reviews the various efforts made by the federal government and other agencies to reform it.

    The free trade zone scheme was designed to attract foreign direct investment, generate employment, enhance trade and industrialization, promote exports, enhance foreign exchange earnings, encourage transfer of technical know-how to Nigerians and contribute to the economic growth and development of Nigeria. In their analysis of key data on the impact of Nigeria’s Free Trade Zone Scheme covering 1996 to 2012, the authors noted that the overall performance fell below expectations. On foreign direct investment, for instance, the book highlights conflicting figures: whereas the Ministerial Committee for the Reform of Free Trade/Export Processing Zones claims an annual average of $200 million foreign direct investment inflow into the country, the International Labour Organization, ILO, claims that only $1.2 million trickled into the country in 2007.

    The book also shows that domestic involvement in the scheme has been disappointing. Eleven out of the 30 free trade zones already licensed are still inactive. On the stated objective of promoting exports, the authors concluded that “the free trade zone programme is presently not contributing in any significant way to exports from the country”. The free trade zones earned a paltry $8.3 million in foreign exchange and contributed only N58.4 million annually to government coffers through fees charged by the Free Export Zones and the Nigeria Immigration Service. On job creation, the free trade zones accounted for only 40, 000 out of the 148, 363 jobs created in 2012, just as only 250 companies, at the rate of 10 in each zone, were operational in the free trade zones.

    It must be stressed that the story of the scheme is not all about under-performance. Despite the dearth of relevant data, the authors established the “existence of a substantial number of Nigerians in top management positions in Free Zone Developers, Free Zone Managers and Free Zone Enterprises”, just as host communities are tapping into the positive sides of the programme. The salutary elevation of Onne, host community of the Oil and Gas Free Zone, from a sleepy fishing village to a semi-urban centre is one of the success stories highlighted in the book.

    Among other recommendations for streamlining the free trade zones to stimulate the economy is the need to establish a commission, which the authors believe will be in a position to “supervise a large number of free trade zone enclaves”. The authors anchored the entire work on the conviction that the free trade zones scheme will “enhance the economic growth and development (of Nigeria) through the creation of jobs and …benefit from other spillovers of the scheme”.

    With the current economic woes facing the country, the government should treat the Nigerian free trade zones scheme with the seriousness it deserves so that it could consciously accelerate the pace of economic growth and the development of export-oriented manufacturing in the non-oil sector of the economy. Economic indices of the past decade should have told us that reliance on oil to finance the country’s development projects is becoming increasingly old-fashioned and suicidal just as reliance on foreign loans to fund development projects in Nigeria has become unrealistic. Rather than seek loans from a country like China to finance development projects, Nigeria should learn how to catch the proverbial free trade zones scheme fish from that country. Indeed, China’s romance with the free trade zones scheme has had salutary impacts on its phenomenal strides in the manufacturing sector. China’s elegant journey from an agriculture-driven economy to the world’s factory and second largest economy in the world within a period of 30 years is attributable to the creation of Special Economic Zones.

    The era of paying lip service to the diversification of the economy should be over. Now is the time for policy makers to insist on deliberate efforts aimed at repositioning other contributors to the national economy that have suffered neglect over the years because of ‘the curse of the black gold’. Current efforts to revitalize agriculture, mining of solid minerals and manufacturing would attract the attention they deserve if Nigeria’s Free Trade Zones Scheme is accorded its rightful position.

  • Lekki Free Trade Zone MD killed

    Lekki Free Trade Zone MD killed

    •Policeman, two villagers too

    Lekki Free Trade Zone (LFTZ) Managing Director Tajudeen Disu and three others were killed yesterday in a clash in Okuraiye Community near Ibeju Lekki, Lagos.

    Disu was reportedly killed by irate villagers, who were protesting against what they called “forceful takeover” of their land.

    The others are a policeman and two villagers.

    The villagers claimed that the police killed two of them in a bid to “forcefully takeover” the land on which Africa’s richest man Aliko Dangote plans to build a refinery.

    Governor Akinwunmi Ambode described the mayhem as shocking and unacceptable, urging the police to bring the perpetrators to book.

    Police chief Fatai Owoseni said 10 persons have been arrested in connection with the incident.

    A chief alleged that the Lekki Free Trade Zone called in riot policemen from “Mopol 49” because the villagers had always protested against forceful acquisition of their land. The chief claimed that the policemen were led by the late Disu.

    Soldiers have been deployed in the community to maintain peace. Chief Security Officer of Dangote Refinery Col. Usman (rtd) was among those injured.

    Addressing reporters, at the Lagos House in Alausa, Ikeja, Ambode said Disu was shot during an official visit to one of the villages within the zone.

    “We are deeply touched with the loss of our dedicated officer at the Lekki Free Trade Zone, Alhaji Tajudeen Disu, who was until his death the arrowhead of the Free Trade Zone Initiative. He was killed within the Lekki Free Trade Zone this morning.  It really saddens my heart and the heart of all of us because this was somebody that has been dedicated to his duty in the past 10 years”.

    The governor described the late Disu as a man who was committed to promoting the inflow of investment to Lagos State. He expressed concern over the motives of those behind the killing.

    Ambode urged Owoseni to unravel the events that led to Disu’s death.

    “This is a great concern and I have directed the Lagos State Commissioner of Police to investigate the cause of the death. The Commissioner of Police must do a thorough investigation to unravel the root cause of what has just happened because he was on a peaceful mission to that place”, the governor said.

    He urged residents of the area to remain calm as his administration will continue to ensure the security of lives and properties.

    “I want to appeal to all our people in Ibeju Lekki axis that they should give peace a chance; it is in the interest of all Lagosians that we attract as many investors to the state. That is what we have been doing in the last four months. I implore everybody to be calm. We would get to the root of this unfortunate incident”, he said.

    The governor added: “I will like everybody to also know that we are trying our best but we can only appeal to our people to allow peace to reign in the Free Trade Zone. That is the only way we can allow more people to be involved in this trade zone. Let me tell our people that we are on the right cause for the kind of job creation we want to bring to Lagos State”.

    Owoseni said investigation is on-going to uncover the sponsors of the mayhem.

    “We have so far arrested 10 suspects and the arrests we have made are those that are directly responsible.”

    “We would do a diligent investigation. We will ensure that the people behind it are arrested, not just the people we see on the road are perpetrators, and there may be sponsors. We will go after these sponsors and I can assure you we ensure the investigation is carried out as speedily as possible and we will make sure they are diligently prosecuted,” Owoseni said.

    Lagos Command spokesman Deputy Superintendent Police (DSP) Joseph Offor said many were arrested after the clash, adding that some were let off after screening.

    Offor said the incident started around 9am, noting that Usman was stabbed by the mob who were armed with dangerous weapons and charms.

    He said: “The residents of the community engaged in a violent protest this morning. They claimed that they did not sell their land to Dangote refinery and they were carrying knives, sticks and charms.

    “So, the Managing Director of the Lekki Free Trade Zone came out and tried to appease them but he was lynched.

    “The mob also stabbed a retired Colonel, who is the CSO of Dangote refinery.

    “Some people are currently in police net and the Commissioner of Police has assured that the family of the deceased will get justice.

    “Those involved in this crime won’t go on punished. At the end of investigations, those found to be connected with it will be charged to court.”

  • Ambode promises incentives for Lekki Free Trade Zone’s development

    Ambode promises incentives for Lekki Free Trade Zone’s development

    Lagos State Governor, Akinwunmi Ambode yesterday said his administration will provide all incentives required to hasten the development of the Lekki Free Trade Zone  (LFTZ) that parades multi billion dollars investments.

    Ambode spoke while fielding questions from reporters after an inspection tour of LFTZ situated on 16, 000 hectares of land at Ibeju-Lekki axis of the state.

    LFTZ  habours $11 billion Dangote Refinery and other multi billion dollar investments driven by consortium of Chinese companies. Ambode said inputs from the zone is needed to boost economic prosperity of the country.

    He said: “I came here to see the level of development that is going on. The Free Trade Zone is a major catalyst for the development of Lagos State. It was started during the administration of Asiwaju Bola Ahmed Tinubu and continued by my predecessor, Mr. Babatunde Raji Fashola.

    “I have come here to give my commitment that we would follow up with this project because it is going to be a major catalyst to the economy of this particular zone as well as the economy of Nigeria.

    “Whatever it is that we need to do together alongside with the community, we have got their commitment that we would join hands together to move this project forward,” Ambode said.

    The governor said his administration will also look at the Lekki Seaports which has been idle for about nine  years and ensure that it is revamped.

    He said:  “There is no way we would have this Free Trade Zone if the port is not activated. It needs to be reviewed. My administration will look at it and make sure the port is activated and construction starts immediately.

    “I also want to assure the people here that the issue of electricity will be looked at; its surprising that some communities here do not have electricity in the last five years. In the next four weeks something must happen. It is totally unacceptable and we would make sure that we bring succor to our people.

    “That is why we are in government and that is what they have told us that we should do and that is what we will do everyday in this administration.”

    The governor lauded the community and the consortium of Chinese companies for supporting the state in the project.

  • Enugu becomes Free Trade zone

    President Goodluck Jonathan has approved the establishment of the Enugu Free Trade Zone.

    The state governor Sullivan Chime who disclosed this during the commissioning ceremony of Sunrise Flour Mills Enugu said that the President was expected to commission the project on the 21st.

    He noted that the project when fully operational would go a long way in alleviating poverty and enhancing the economy of the state and that of its residents.

    The governor, who was represented by the State Commissioner for Commerce and Industry, Dr Jude Akubuilo, stated that Sunrise Flour Mills which stopped production more than two decades ago was revived in partnership with a Vietnamese concern, DAO -VTV International Trading and Investment Company LTD (DVI).

    He described the development as “a very pleasant outcome” of his administration’s initiatives towards enhancing production and the creation of employment opportunities for the people. He assured that the government would continue to maintain an enabling atmosphere for both local and foreign investors to thrive.

    The Chief Executive Officer of Dao-VTV  Huyen Tuyet Phuonh commended the state government for its commitment to the reactivation of the company assuring that it would produce products that will meet international quality standards.

    She noted that company will not only ensure employment opportunities to youths in the State but will also provide qualitative training for its staff and distributors while boosting the economy of the State.