Nigeria's free trade zones have attracted over $200bn in foreign investment and more than N900bn in domestic investment, generating over 100,000 direct jobs and over 500,000 jobs across supply chains, logistics networks, and host communities. The Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, disclosed this at a virtual meeting with Special Economic Zones stakeholders in September.
The government is introducing Digital Free Zones and tightening rules on exports, domestic sales, taxation, and customs to modernize the regulatory framework governing the zones and strengthen their contribution to investment and non-oil exports. The revised framework follows consultations with government agencies, lawmakers, and private-sector stakeholders.
The reforms aim to build on the investments and jobs already created while addressing weaknesses that have affected the integrity and competitiveness of the scheme. Oduwole identified the diversion of goods produced in free zones into the Nigerian Customs Territory while retaining fiscal incentives intended for export-oriented activities as a major concern.
The revised framework will reinforce the export orientation of the scheme by clarifying the 75 percent export and 25 percent domestic-sales structure and aligning domestic sales with applicable Nigerian tax laws. The reforms will also clarify the responsibilities of agencies overseeing the zones, with NEPZA and the Oil and Gas Free Zones Authority retaining responsibility for licensing and operational oversight.
The Nigeria Revenue Service will handle tax administration, while the Nigeria Customs Service will remain responsible for customs control, valuation, classification, and enforcement. The revised framework will also accommodate businesses that do not require conventional physical zones, particularly technology-driven enterprises.
The Executive Secretary of NEPZA, Toyin Elegbede, welcomed the reforms but urged the government to protect businesses that have invested under the existing regulatory regime. Operators seek investment protection and a clear and predictable transition to the new framework that does not undermine existing investments.
The government's objective is to position the zones as engines of non-oil export growth and support President Bola Tinubu's target of building a $1tn economy by 2030. The Minister of Industry, Trade and Investment assured that the government will continue to support lawful incentives that serve the purpose of the zones while demanding greater compliance from operators.
Key points
- Nigeria's free zones have attracted over $200bn in foreign investment and created more than 500,000 jobs.
- The government is introducing Digital Free Zones and tightening rules on exports, domestic sales, taxation, and customs.
- The revised framework aims to reinforce the export orientation of the scheme and clarify the responsibilities of agencies overseeing the zones.
