OGFZA Bill: Umana backs amendment bid with record performance report

At the public hearing on Thursday on the bill to amend the OGFZA Act of 1996, the Oil and Gas Free Zones Authority (OGFZA) argued that amending the enabling law to strengthen OGFZA and make it more effective was the right thing to do for an agency of government that has recorded outstanding achievements since it began operations in 2000. In a paper to the public hearing, the managing director of OGFZA, Mr Umana Okon Umana, reported that the oil and gas free zones grew by 32 per cent in less than two years after OGFZA took charge of the management and regulatory control of the free zones, compared to the growth rate of 2.11 per cent before OGFZA assumed control.

Umana said the positive impact of OGFZA’s management and regulatory control of the oil and gas free zones was manifest in all aspects of the nation’s economy—from shipping traffic at the ports to inflow of foreign direct investments and revenue to government. He said between January 2010 and December 2015, the Nigeria Customs Service generated N143.2 billion in revenue from the oil and gas free zones alone, while the Nigeria Ports Authority raked in $2.1 billion and N19.3 billion within the same period from the oil and gas free zones.

With regard to shipping traffic—excluding crude oil exports—the OGFZA MD said oil and gas business from the free zones dominated the nation’s export trade in 2016, recording 89.53 per cent of export in the first quarter, 89.65 per cent in the second quarter and 85.34 per cent in the third quarter. He added that in 2015, shipping traffic in and out of the oil and gas free zones in Onne and Warri alone accounted for 23.66 per cent of gross tonnage of total ship tonnage for the entire country. “These statics underline the tremendous positive contribution to Nigeria’s trade balance, with attendant huge revenue for the Federal Government,” Umana said.

He argued that an agency of government with such fantastic track record should only be assisted to perform better through the right legal framework which, he said, the amendment was seeking to achieve.

Against the background of contrarian argument by opponents of the bill that the amendment should not be allowed, and that OGFZA should even be scrapped or merged with the Nigerian Export Processing Authority (NEPZA), Umana told the hearing that it was on record Nigeria pioneered the concept of special free zones for oil and gas business, noting that the concept has become so successful that it has now been copied by other countries. He then concluded that it would be unthinkable for Nigeria to abandon an innovation it pioneered to international acclaim and embrace.

Further dismissing the case for merger, Umana also cited the Federal Government White Paper gazetted in March 2014 on the Restructuring of Federal Government Parastatals and Agencies, which rejected the merger of OGFZA and NEPZA, as well as the opinions of two Attorneys-General of the Federation on the Acts establishing OGFZA and NEPZA, both of which affirmed the legal status of OGFZA as an autonomous agency with the sole responsibility for licensing and regulating oil and gas free zones in the country.

The proposed amendment to remove all imperfections in the 1996 Act is sponsored by Senator Ibrahim Gobir, chairman of Senate Services Committee, representing Sokoto East in the Senate. In his opening remarks, Gobir said the 20-year law was long overdue for a review to bring it in line with current realities.

Many stakeholders such as the NPA, NEPZA, CBN, Ministry of Finance, Association of Exporters, Intels, Ministry of Justice, Brawal, LADOL, etc, were invited to the public hearing where they were called upon to make submissions on the bill. The session, chaired by Senator Fatimat Raji Rasaki, chair of Senate Committee on Trade and Investment, was a marketplace of ideas, with some supporting the amendment bill while others were opposed to it with basically nothing other than primordial sentiments.

The public hearing was declared open by the Senate President, Bukola Saraki, who was represented by Senate Deputy Leader, Bala Ibn N’Allah.