Nigeria’s free trade zones have attracted more than $200 billion in foreign investment and over N900 billion in domestic investment, while generating more than 500,000 jobs across direct employment, supply chains, logistics networks and host communities, the Federal Government has said.
The Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, disclosed this during a virtual meeting with Special Economic Zones stakeholders in September, as the government moves to modernise the regulatory framework governing the zones.
Oduwole said the reforms were designed to strengthen the role of free and special economic zones in attracting investment, increasing production and expanding Nigeria’s non-oil exports.
She said the government was reviewing the Nigeria Export Processing Zones Authority regulations to make the framework more responsive to evolving business models, including digital operations.
Under the proposed framework, Digital Free Zones and Digital Special Economic Zones would be formally recognised, allowing technology-enabled businesses to operate without the need for conventional physical zones.
“Across the scheme, the authorities record over $200bn of foreign investment and over N900bn of domestic investment, more than 100,000 direct jobs, and over 500,000 when the supply chains, the logistics networks and the host communities are counted. So you are all, indeed, valuable investors and contributors to the Nigerian economy. This has not and will not change,” Oduwole said.
The minister said the regulatory overhaul followed consultations with government agencies, lawmakers and private-sector stakeholders.
According to her, the reforms seek to preserve Nigeria’s attractiveness to investors while strengthening fiscal accountability and addressing weaknesses that have affected the integrity and competitiveness of the free zones scheme.
One of the government’s major concerns is the diversion of goods produced in free zones into the Nigerian Customs Territory while businesses continue to benefit from fiscal incentives intended to support export-oriented activities.
Oduwole said the revised framework would reinforce the export orientation of the scheme by clarifying the existing 75 per cent export and 25 per cent domestic-sales structure, while aligning domestic sales with applicable Nigerian tax laws.
The reforms would also clarify the responsibilities of agencies overseeing the zones.
The Nigeria Export Processing Zones Authority (NEPZA) and the Oil and Gas Free Zones Authority would retain responsibility for licensing and operational oversight, while the Nigeria Revenue Service would handle tax administration.
The Nigeria Customs Service would remain responsible for customs control, valuation, classification and enforcement.
The revised framework would also introduce provisions for businesses that do not require conventional physical zones, particularly technology-driven enterprises.
“The Revised NEPZA Regulations and Operational Guidelines create, for the first time in Nigeria, Digital Free Zones and Digital Special Economic Zones – zones that operate on a platform rather than a perimeter, with no requirement of physical presence,” Oduwole said.
She added that the framework would introduce new licence categories, including an Innovator Licence for enterprises operating in areas where regulatory frameworks are still developing.
Reporting and fee structures would also be adjusted to reflect how digital businesses generate revenue.
The Executive Secretary of NEPZA, Toyin Elegbede, said operators welcomed the proposed reforms but urged the government to protect businesses that had already invested under the existing regulatory regime.
“Our members recognise the need for a strong, transparent and well-regulated Special Economic Zones regime, and we welcome the opportunity to engage the government before the framework is finalised. Our priority is to ensure that the reforms address genuine gaps without creating new uncertainty for operators who have invested and modelled their investment on the strength of the existing regime at the time of investment,” Elegbede said.
He said stakeholders wanted a competitive free zones ecosystem capable of attracting additional investment, protecting legitimate businesses and increasing production and exports.
NEPZA Chairman, Hadi Mutallab, also called for a clear and predictable transition to the new framework to protect existing investments.
“The reform of Nigeria’s Special Economic Zones is necessary to strengthen the integrity of the scheme and ensure that the incentives provided deliver the investment, production, jobs and exports for which they were intended. At the same time, we must protect legitimate operators who have invested in our Zones and ensure that the transition to the new framework is clear, predictable and does not undermine existing investments,” Mutallab said.
Oduwole said the government would continue to support lawful incentives that serve the purpose of the zones while requiring operators to comply with applicable regulations.
She said the government’s broader objective was to position the zones as engines of non-oil export growth and support President Bola Tinubu’s target of building a $1 trillion economy by 2030.
Follow us on:
Author
