We’re working assiduously to replicate a Dubai with Eko Atlantic City – Adesugba

Professor Adesoji Adesugba, the managing director, Nigeria Export Processing Zones Authority (NEPZA), in this exclusive interview with ABDULRAHMAN A. ABDULRAUF and ADOYI M. ABA, reveals the progress the agency has made so far under his leadership and many more.

We have watched with keen interest the progress NEPZA has made under your leadership. What management style have you used to turn around the fortunes of the Authority and zones so expeditiously?

First, let me again express my profound delight and honour to His Excellency, President Muhammadu Buhari, for considering me worthy of this position. By July 1, I shall have spent two years as the Managing Director and Chief Executive Officer of this very important establishment. I was indeed sent here on a mission; a mission to reposition the Authority so that it could truly be in the position to drive the economy properly. The main objective is to re-set the country’s Special Economic Zones Scheme to begin to significantly attract Foreign Direct Investment (FDI) and Local Direct Investment (LDI).  So, in answering your question, I would say, upon my assumption of office, I insisted on deploying the best type of management system of team work and collective bargain to optimize the agency’s operational environment. The new management team, with the support from both NEPZA Board members, led by Alhaji Adamu Fanda as chairman, and His Excellency, Otunba Adeniyi Adebayo, the Minister of Industry, Trade and Investment, showed no hesitations in supporting us to hit the ground running. The effect of that consistent support is what translated to the progress we have made so far.

Backed by a supportive supervising Minister, NEPZA and the FMITI have developed a system of constant engagements and feedbacks to ensure that there is a common messaging regarding the agencies’ goals and objectives. I have never shied away from telling people that my expertise in general administration, investment promotion and law alone could not have driven us to achieving this much without the unflinching collaboration of the staff and the management team. With the above structures in place and functioning, we could effectively and efficiently contribute to Nigeria’s economic development in a more consistent basis.

You have wished to use the Special Economic Zones model to fast track the nation’s economy; what are the prospects and hindrances?

The decision of our past leaders who about 30 years ago opted for Free Trade Zones Scheme, a global economic model that aids widespread economic growth, remains legendary. It is important to note that the Scheme, as adopted through the establishment of NEPZA by Act 63 of 1992 with the mandate of licensing, regulating, monitoring, and promoting the operations of all zones in Nigeria, has indeed evolved globally.

We, therefore, cannot afford to remain static in this highly competitive business. We have now switched from the orthodox free trade zones model with restrictive rules on exportation to customs area. The federal government may not have reaped significantly from this old order which explains why the special economic zones model with flexible rules on export trading more favourable. The SEZs model grants access to goods and services produced in the zones to be exported to both foreign countries and to Nigeria. It encourages local content and participation of local investors in a great deal, thereby facilitating a wider space for the attraction of both FDI and LDI simultaneously. The SEZs model holds great prospect as it provides us with the latitude to operate it in such a manner to have far-reaching positive impacts on the economy. The country has 42 private SEZs and over 500 functional enterprises providing direct and indirect jobs to millions of our people. Indeed, various gaps were identified in key sectors of the economy leading to plans to bridge these gaps using the SEZ scheme.

This adopted model comes with a lot of prospects as it provides the country with sustainable investment space. For example, the Lekki Deep Sea Port within the Lagos Free Zone is the marquee project in Lagos state which will have huge catalytic impacts on the Nigerian economy. It has the capacity to contribute significantly in boosting economic activities and West African competitiveness on the global market.

The project sits on 90 hectares of land and is being promoted by the Tolaram Group based in Singapore, the Nigerian Ports Authority (representing the federal government), Lagos state government and China Harbour Engineering Company (CHEC). 66.62% of the Breakwater and 44.70% of the Quay Wall has been completed. In phase 1 of the project, the capacity of the port will be 1.2 million TEU’s, with a drought of 16.5m. There will also be two container berths and one dry bulk terminal and expected date of completion is the end of 2022. It is expected that the deep-sea port project will generate over 170, 000 jobs.

Situated within the Lekki Free Zone, the on-going development of the Dangote Refinery touted to be the world’s biggest single-train facility is a multi-billion-dollar project by the Dangote Group aimed at reducing Nigeria’s oil importation and saving Nigeria billions of dollars from importation. It will not only provide over 70,000 direct and indirect jobs, but will remove the stigma of a producing country having to import refined petroleum country for its domestic use. When complete, it will have the capacity to process about 650,000 barrels per day of crude oil, able to satisfy the petroleum needs of the whole country. The Lekki Free Zones Quadrant, Ogunguandong, Eko Atlantic City among others are national assets. So, you can see from the progress made that it isn’t just a wish for us to drive the nation’s economy using the SEZs; a lot of achievements have been made. It can only get better. We are working to replicate a Dubai with the Eko Atlantic City.

You identified the medical, agriculture, tourism and mining &mineral as proposed zones to establish. Has the Authority made any success of this great intention?

We actually came up with four key thematic areas for development namely; Medical & Pharmaceutical, Mining & Mineral, Agriculture & Allied Industries and Information and Technology Parks to drive the economy. NEPZA has successfully received land allocations with Certificates of Occupancy from Lagos, Ebonyi, Kwara and Katsina states for the SEZs projects. Project teams for implementation have already been set up and have commenced preliminary planning. Lagos, Kwara and Katsina states have been selected as the pilot locations for the siting of the Medical Special Economic Zones projects and its supporting ancillary industries. The good news is that payment releases have been made by the government for the various contractors awarded jobs to commence executions. We hope to replicate at least a specilaised zone in each of the six-geopolitical zones.

The federal government has completed plans for the concessioning of Calabar and Kano Free Trade Zones. What are the merits and demerits of this proposed action?

Let me reiterate that the planned concessioning of the country’s two public free trade zones, with location in Calabar and Kano cities, remains the government’s best approach to use the Scheme to accelerate industrialisation. The National Council on Privatisation, through its secretariat, Bureau of Public Enterprises (BPE), in conjunction with the Ministry of Industry, Trade & Investment and NEPZA on May 10 held a road-show to attract their take-overs. It is our sincere belief that the planned handshake with the would-be concessionaires would positively impact on the operation of the 30-year-old public facilities for global competition.

The two zones are highly viable because of many reasons including their vital locations, easy access to raw materials, seaports, airports, outside infrastructure, labour and importantly the boisterous nature of the two commercial cities. I want to assure the private sector and particularly, companies that are set to file their bids to count themselves lucky because of the great requisite returns on investment that await them. The private sector take-over will engender competition and enhance wealth creation.

The Free Trade Zone scheme has existed for about 30 years in Nigeria; what are its contributions to the country’s GDP?

Perhaps, I should attempt to answer this question by drawing an inference as to what the marginal point of the country’s GDP would translate to without the over $30 billion the Scheme has attracted to the economy so far. The Scheme, even with all of its incentives that appear like tax wavers, still ensures marginal contribution to the National Gross Product (NGP) and Domestic Gross Product (GDP) as contained in the Authority’s 2021 Key Revenue Achievements/Indicators.

In 2021 alone, a total of 27 Free Trade Zones Enterprises were registered while the value of attracted Foreign Direct Investment stood at $24.8 million and that of the Local Direct Investment amounting to N233.6 billion, respectively. Furthermore, a total of $37.3 million was attracted to the country from international export of goods while N361.1 billion was generated from domestic export.

The record also shows that a total of N35.1 billion accrued to the government as Customs Duty while N408.3 million was remitted as PAYE taxes.

In a similar vein, a total of 19,125 employments were generated just as 3, 000 jobs skills were transferred to the country and revenue generation from Immigration matters standing at N746.5 million.

Also, Local Import which serves as backward linkage stood at N65.1 billion within the period under review while the cumulative investment in the free zones scheme in 2021 amounted to N14.1 trillion. These are just fragments of how the Scheme impacts the economy.

Could you please shed more light on the establishment of the Economic Zones Security Unit?

The idea of establishing this unit came from the new management’s policy direction to re-position the Scheme to become a global player. We decided to create the unit and train some of our young able-bodied and intelligent staff members to fortify the zones’ security architecture that can guarantee the protection of lives and investments more profoundly. The unit has not come to push aside the already existing government security structure, but to assist them have a more water tight environment that rebuffs all manners of security breaches, including espionages and economic sabotages. You are aware that the free trade zones have the status of a country and, therefore, it is incumbent on us to establish our independent security outfit that can dutifully safeguard our set of rules and operations. We have commenced the training of 45 elite cadres of the Economic Zones Security at the State Security Service Academy in Lagos. We will be recruiting junior cadre officers for this purpose once we obtained approval from the government.

What other support does NEPZA require to perform its duties more seamlessly?

The Authority has a number of challenges like can be found with sisters’ agencies, but we have not allowed that to affect our operations. In fact, let me use this opportunity to thank President Muhammadu Buhari again for his support so far. His interest in free zones scheme has given NEPZA some impetus and enablement. The federal government has not rejected any of our proposals aimed at bridging the infrastructure deficits in the two public zones located in Calabar and Kano. The Buhari administration continues to show an interest in the need to provide outside infrastructure in our zones. The availability of basic infrastructure like roads and electricity play a huge role in attracting investments to the zones. We are careful not to put too much pressure on the government in view of the current economic reality; so we work within our approved budget and so far, so good.

How can the country tap from the African market through the African Continental Free Trade Zones Act (AfCFTA)?

The AfCFTA agreement is made up of 54 African countries merging into a single market of 1.3 billion people. This resource, with the merit of enhancing sustainable markets, could create an economic bloc with a combined GDP of $3.4 trillion. Once in place, intra-African trade is expected to grow by 33%, and Africa’s total trade deficit is expected to be cut in half. In addition, the AfCFTA could generate combined consumer and business spending of $6.7 trillion by 2030, according to the Mo Ibrahim Foundation.

AfCFTA is not simply a free trade agreement; it is a vehicle for Africa’s economic transformation. Through its various protocols, it would facilitate the movement of persons and labour, competition, investment and intellectual property. Nigeria is using variety of its economic frontiers, including the free trade zone to leverage on the Act to expand its trading routes across the continent.

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