By Okanlawon Ayo
Stakeholders in the nation’s economy have advocated for proper planning as a key to the economic viability of Free Trade Zones (FTZ) in the country.
A free-trade zone is a specific class of special economic zone. It is a geographic area where goods may be landed, stored, handled, manufactured, or reconfigured, and re-exported under specific customs regulation and generally not subject to customs duty.
Speaking at the Nigeria Business Roundtable (NBR) 2017, the Managing Director, Oil and Gas Free Zones Authority, (OGFZA), Umana Umana Okon said managing FTZs all over the world comes with challenges.
According to him, for the zones to be viable, OGFZA must be satisfied with all the application requirements before making presentation to the president.
He said, “The decision to establish FTZs should be economic and not political. We will not take application to the President if we are not satisfied that the zones are viable.
“We must address the issue of infrastructure such as power, security, airports among others before FTZs can run competitively. Local content is not about ownership but participation,” he added.
On his part, Managing Director Lekki Worldwide Investments Limited (LWIL) Tunde Sodade, said a key criteria for the profitability of FTZs is to make the registration more rigorous.
“One of the things we can do is that the registration should be more rigorous. Once that is in place, you start to protect the initiators against themselves. If we have a FTZ that is not beneficial to the local population, then something is wanting,” he said.
According to him, Nigeria has about 33 FTZs among which half are active and less than 5 are viable.
He said, “None of them have any evidence of thorough business strategy which is why they have issues. You can’t have a FTZ in isolation of the host country. We need strong infrastructure to have viable FTZ. I see a lot of FTZ where they have just land and all that which is not going to work”.
Furthermore, a former Chairman of OGFZA, Chris Asoluka while saying that the opportunity in the Gulf of Guinea made Nigeria to have a specialized zone in 1996 also reiterated that the plans to have FTZ should be devoid of political motives.