The Nigeria Export Processing Zones Authority (NEPZA) and the Nigerian-American Chamber of Commerce (NACC) have encouraged investors with attractive incentives, offering them the opportunity to repatriate foreign capital investment in export processing zones.
Speaking at a breakfast meeting organised by the Nigerian-American Chamber of Commerce (NACC) in Lagos, Emmanuel Jime, managing director of NEPZA, urged investors to put their money in export processing zones as 100 percent of foreign ownership of business is allowable there.
“Goods manufactured or produced in the zones shall be imported into the Customs territory irrespective of whether the goods are prohibited or not. However, prohibited goods that have been assembled or packaged without the 35 percent local content value addition requirement may not be allowed into the Customs territory,” he said.
According to Jime, up to 100 percent of goods may be exported into the Nigerian Customs territory against a valid license/permit, and on payment of appropriate duties, subject to extant fiscal guidelines of government.
He stated that there was no import or export license required to operate in the free zones, adding that legislative provisions pertaining to taxes, levies, duties and foreign exchange regulations do not apply within the zones.
Nigeria has 37 free zones/industrial parks, which include Lekki Free Zone, Calabar Free Zone, Kano Free Zone, Snake Island, Lagos Deep Offshore Logistics Base (LADOL), and Eko Atlantic City, among others. However, only 12 are fully operational. Those that are not in operation are mostly owned by state governments.
According to Jime, import duty on goods manufactured, processed or assembled in the zones and exported into the customs territory would be at the rate applicable to raw materials (in the state in which they are originally introduced into the zones) except where the raw materials are local to the customs territory and in which event the duty applicable shall be zero-rated.
He assured investors that their cost of doing business would reduce by at least 10 percent if they choose to invest in the zones, adding that they only need to pay $3000 and can acquire Free Zone Developer’s License (own a free zone) or Free Zone Enterprise License (play in an existing free zone).
On his part, Oluwatoyin Akomolafe, president, Nigerian-American Chamber of Commerce, stated that a free trade zone is a preferred place for investment because of its friendly business law and regulations deliberately put in place by governments to boost manufacturing activities and promote export of finished products.
“The idea of free trade zone is a well-developed system of attracting foreign direct investment (FDI) into a country that has been in practice in advance economies around the world and was introduced into Nigeria with the establishment of NEPZA, which has led to the creation of different free trade zones across the country,”Akomolafe said.
He pointed out that the idea of free trade zone is meant to encourage world trade, limit trade restriction and promote employment.
“It has often been said that the current economic climate presents a great opportunity for the restructuring of the economy. I cannot agree more. The country has had opportunities in the past but they were wasted by the very people who should ensure compliance.
“It is my hope that at this critical junction of our national life, certain fundamentals will be put in place; some of these would include provision of critical infrastructure like the establishment and functioning of free trade zones. This will ultimately lead to a boost in industrialisation which will bring about job creation, skills upgrade, promotion of exports and economic development,” he added.
NEPZA is a federal agency that manages free zones and industrial parks across the country. Free zones are designated areas for duty-free import or manufacture of raw materials, machines, semi-finished, processed and finished goods. They are also called industrial parks.