Business owners and stakeholders have identified and built economic policies through which countries can achieve inclusive growth and comprehensive economic development through the Free Trade Zones (FTZs). ADEOLA TUKURU reports.
Free Trade Zones
One of such innovative policy strategies which has been increasingly employed by countries in catalysing growth and economic transformation is the Free Trade Zones.
Other examples are the Centenary Free Trade, Tomaro Trade Zone, Abuja Technology village among others which when utilized would create wider economy so as to catalyse an attractive business environment.
Long term stability
A Legal Practitioner from Snake Island Integrated Zone (SIIFZ) Bar Adewale Dosumu had said the benefits of the zones will include reduction in administrative costs, long term stability of operations and safety of investment which together lead to investor confidence in the economy.
These Free Trade Zones which is said to be active represent a delineated area within a nation’s geographical setting governed by a set of business rules and regulatory policies which are more liberal than those obtained within the country’s national boundaries.
Recently, the Chief of Operations, Crimson Gate Consulting company, Mr Brent Dyke said the Free Trade Zones if developed would be of immense benefits to both parties as there would be no barrier in the movement of goods while value addition would be done within the zones.
While informing the Minister of State Ministry of Industry , Trade and Investment, Amb Mariam Yelwaji Katagum, Dyke said his company was interested in investing in Nigeria particularly in Bauchi state.
He said his country has a lot of similarities with Ohio state in the United States of America.
Development of mining
He said his company planned to invest in the development of mining, manufacturing and other areas of production with a view to reinvesting part of the profit back into the locality for Nigerians to be empowered.
Also, the Acting Managing Director of NEPZA, Engr. Terhemba Nongo told newsmen in Abuja recently said the new zones also have the capacity to create about 3 million indirect jobs with the right investments as they are not among the inactive zones.
Engr Nongo, gave an example of Ethiopia, which expended over N100 billion on an industrial park within 12 months and will be reaping 1 billion dollars per year from the investment in no too distant time.
According to him, the President has established seven new trade zones; one in Lekki, Ilorin, Makurdi, Sokoto and yet to be agreed location in North-east, South-east, and Ebonyi state, which we are yet to get the site.
He said they will provide infrastructures in these zones and with the right investment each of the zone will provide a minimum of 50,000 direct jobs and when multiplied by seven, that will be 350,000, and indirect jobs of about 3 million,” he said.
He said the construction of each zone will cost between N50 billion to N80 billion, adding that with right funding, the projects could be completed within two years.
On the Calabar Free Trade Zone, Nongo said about N5 billion will be needed to construct Independent Power Plant to service its activities while about N10 billion will be enough to complete all infrastructural projects in Kano Free Zone.
More funding for NEPZA
He commended President Muhammadu Buhari for ensuring more funding for NEPZA, adding that N50 billion was allocated to the Authority in the 2017 budget, with the same feat repeated in the 2018 appropriation.
Part of the mandate of The Nigeria Export Processing Zones Authority (NEPZA) is that the country stand to gain a lot from the seven new free trade zones projects as it will not only recoup its investments in a short period but will further attract massive Foreign Direct Investments.
The Free Trade Zones (FTZs) encompass varieties of flexible legal and economic advantages to investors relative to what they enjoy in the domestic economy such as, infrastructure, special customs regimes, improved regulatory and administrative regimes, fiscal incentives and promising hassle-free business environments.
Developed and developing economies have increasingly utilized the Free Trade zones as an economic tool to stimulate foreign capital through foreign direct investments (FDIs), to develop and diversify exports.
Others are to also increase the competitiveness of the domestic economy, create jobs, and upgrade from commodity chains to value chains.
It was recorded that the proliferation of Free Trade Zones in the past four decades is evident of its success as development and industrialisation tool.
It would be recalled that on the African continent, Mauritius and Ghana have also utilised the instrumentality of the FTZ to attract FDIs, increase export and capital flows, create jobs and upgrade into the global value network.
While the Chinese-model SEZ has become a world class model which has spurred the interest in many countries, the African experience on SEZ has been far from impressive.
In a survey carried out by Thomas Farole on the assessment of the performance of SEZs in six African countries in 2009 including Nigeria, it was noted that one important reason for the underperformance of zone programmes on the African continent is the weak business environment.
The report observed that the success of SEZs is inextricably linked to the competitiveness of the national economy.
Put differently, what will determine the success or failure of any Zones regime is the effectiveness of the design, implementation and the continuous utilization of the zones.
Recently, the Federal Government said the creation of Free Trade Zones was of high priority to the present administration as a means of creating jobs for Nigerians.
The Federal Government through the Minister of State, Federal Ministry of Industry, Trade and Investment, Amb. Mariam Yelwaji Katagum, expressed its commitment to partner foreign investors in the development of its free trade zones in order to create jobs for the Nigerian populace.
Katagum, stated this during her meeting with a delegation of foreign investors from Ohio State in the United States of America led by a Nigerian partner who is also a Director in the Horizon Metals Limited, Alhaji Munir Umar in her office.
Ambassador Katagum explained that the development of the free trade zones in the country would provide job opportunities, wealth creation and a host of others.
She further stated that both the Federal Government and the delegation would engage in stakeholders’ discussion to look into the timelines, investment opportunities and the number of jobs to be created.
The Minister expressed a show of appreciation to the delegation for indicating interest to invest in Nigeria and noted that the visit was coming at the right time that President Buhari’s Next Level agenda was kicking off, saying that government would continue to create an enabling environment for ease of doing business in Nigeria.