Nigeria's Special Economic Zones have attracted significant investments, with over $200 billion in foreign investment and over N900 billion in domestic investment. These zones have also created over 100,000 direct employment opportunities, with a total employment impact estimated at over 500,000 when including supply chains, logistics networks, and host communities.
The Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, stated that the federal government is undertaking regulatory reforms to restore the export orientation of the free-zone scheme. The reforms aim to provide greater certainty for legitimate investors while preventing operators from exploiting fiscal concessions to serve the domestic market.
One of the key concerns driving the reforms is the diversion of goods produced in free zones into the Nigerian Customs Territory by operators still enjoying incentives originally designed to promote exports. The government is seeking to strike a balance between maintaining the country's competitiveness as an investment destination and protecting the integrity of the fiscal system.
Manufacturers operating within the customs territory have complained about being placed at a competitive disadvantage. They import inputs, employ Nigerians, and pay applicable duties and taxes, while competing against concessioned goods entering the same domestic market. This situation has contributed to a proliferation of applications for new free zones.
The government has engaged in a 19-month process involving lawmakers, government agencies, and private-sector operators to align the SEZ regime with the objective of expanding non-oil exports. This process culminated in a legislative and regulatory reform committee inaugurated in February 2026, involving officials from the ministry, NEPZA, and OGFZA.
The reform package includes revised NEPZA regulations and operational guidelines, as well as new regulations covering domestic sales, fiscal alignment, and customs treatment for both NEPZA and oil and gas free zones. A key feature is the clearer application of the 75 per cent export and 25 per cent domestic-sales framework.
Under the new framework, NEPZA and OGFZA will retain responsibility for licensing and operational oversight, while the Nigeria Revenue Service will administer tax and customs responsibilities. The reforms aim to promote greater fiscal accountability and ensure that free zones earn incentives through exports, rather than domestic diversion.
Key points
- The Nigerian government is overhauling its Special Economic Zones to boost exports and fiscal transparency.
- The zones have attracted over $200 billion in foreign investment and over N900 billion in domestic investment.
- The reforms aim to prevent operators from exploiting fiscal concessions to serve the domestic market.
