FG Extends Validity Of Operators’ Licences In Free Trade Zones To Five Years
March 11, (THEWILL) – The Federal Government has announced a five-year extension for the validity of operators’ licences in free trade zones across the country.
The Minister of Industry, Trade and Investment, Niyi Adebayo, said the move was to mitigate challenges hindering operators in the zone, noting that the directive is also coming on the heels of the Federal Government’s ease of doing business mandate.
Speaking at a stakeholders’ forum organised by the Nigeria Export Processing Zones Authority (NEPZA), Adebayo urged the operators to take advantage of the extension and also ensure they file their yearly returns.
“With regards to the validity period of licences, I understand that is one of the major challenges of operators at the free trade zone, I have directed that the validity period of licences to be for five years. However, returns should be made every year and we want to assure that before the end of this month, all the issues with duty payment would be resolved”, he said.
Adebayo, who explained that free trade zones play a critical role in stimulating industrial activities, boosting the manufacturing sector and growing the economy, said their performance creates job opportunities and diversifies the economy to generate foreign exchange.
He said, “Free trade zones are very critical to revenue generation for the Nigerian economy and can also help to improve Nigeria’s fiscal position, especially given the volatility of oil prices.
“Expanding Nigeria’s export capacity needs under the African Continental Free Trade Agreement (AfCFTA) mitigate the risk of Nigeria being a dumping ground for imports, while also boosting our foreign currency reserves. Therefore, it is absolutely necessary to adopt strategies that will transform them into a dynamic instrument for economic growth.”
The Minister noted that despite their social and economic potentials, operations within the free trade zones are impacted by challenges such as infrastructural deficit, limited financing to ease operational constraints and misalignment of interest between operating firms and government agencies.
He stated that in December 2020, the ministry temporarily suspended the issuance of new free trade zone licences, saying the move was motivated by concerns that the free trade zones have not delivered on expected contribution for employment, government revenue and export proceeds as envisaged in various national development plans.
According to him, the Ministry has developed a robust and strategic plan that will improve the performance of the zones, stressing that the advent of the AfCFTA has necessitated the revival, reform and expansion of the zones. Assuring that his ministry has taken steps to make inactive free trade zones functional, while also ensuring the removal of bottlenecks in the operations of current active zones.
The Managing Director, NEPZA, Prof Adesoji Adesugba, said stakeholders must come together to maximise the potential of the scheme, adding that over $25 billion have been generated through the scheme.
Adesugba said the forum is to discuss and address challenges facing special economic zone operators in Nigeria, saying that Nigeria seems to be lagging behind due to factors such as policy irregularities.
He stated the need for a strong sensitisation of stakeholders, to help have a better understanding of free zones.
“What really matters is creating the right enabling environment for local and international investors to thrive. Free zones can drive Economic growth”, he said.
On his part, the Managing Director, Oil and Gas Free Zones Authority (OGFZA), Umana Okon Umana, said the success of any country is based on development of its free zones, saying that Nigeria has not done so much to maximise the potentials of the free zone.
The Managing Director, Dangote IFZ, Olayinka Akande, argued that current operations at the zones should be fine-tuned, saying that operational processes at the zones are not very transparent.
He also stated the need to digitise operations so that every player has the same set of operations at all times.