OGFZA: Why firms exited the free zones: Setting the record straight


Why firms exited the free zones:
Setting the record straight

Oil and Gas Free Zones Authority
Marble House
Onne Port Complex
Rivers State

[Why firms exited the free zones:
Setting the record straight]

We refer to a publication in The Guardian and Thisday of Monday, 20 November 2017 and want to state as follows:

1) It is not true that any company has moved out of the Oil and Gas Free Zones because of the disagreement between the Oil and Gas Free Zones Authority (OGFZA) and Intels Nigeria Limited.

2) In the last quarter of last year a few companies applied to the management of OGFZA and indicated interest to leave the free zones because of the lull in economic activities in the Oil and Gas sector for which they provided logistic services. This was before the appointment of the current managing director of OGFZA, Mr Umana Okon Umana.

3) A few other companies also decided to deregister, complaining of excessive tariffs charged by Intels Nigeria Limited to licensees in the zones, a development which led OGFZA to insist on a downward review of the current tariffs and the approval of a new tariff regime by the Authority according to the extant law in the free zones.

4) On 14 March 2017 and 25 April 2017, 16 companies affiliated to Intels Nigeria Limited equally applied for deregistration, citing lack of business. This had nothing to do with the disagreement between OGFZA and Intels Nigeria Limited.

5) It is not true that any companies have left or applied to leave the free zones because of the current disagreement between OGFZA and Intels Nigeria Limited. The cases of departures from the free zones cited above took place before the onset of the disagreement, and the reason which the companies gave was economic. However, OGFZA is aware that some companies have left and threatened to leave the free zones because of excessive charges imposed by the free zone concessionaire without approval of the Authority. We want to note that the excessive charges have eroded the incentives provided by law for free zone licensees, and undermined the purpose of the free zones, which is why OGFZA insists that those charges must be approved before they can be applied in the free zones as provided for in the extant law.

6) We also want to say that it is not true, as alleged in uninformed quarters, that Intels Nigeria Limited is laying off staff because the company has been asked to comply with laws and regulations that govern operations in the free zones. The truth is that since 2015, Intels Nigeria Limited has been downsizing purely for economic reason.

7) The Authority wishes to state that one of the companies, Net Global System International Limited, was mentioned earlier in error as an affiliate of Intels Nigeria Limited that also applied for deregistration. The correct position is that Net Global System International Limited is not an affiliate of Intels Nigeria Limited; the company had been issued with a free zone operating licence for 2017, having met the requirements for the renewal of licence. The Nigeria Immigration Service has been advised accordingly.

8) We want to say that licences have been issued for new companies coming into the free zones this year. This is consistent with the free entry and free exit reality of the marketplace.

9) The Authority will like to be clear that it will not be distracted in the execution of its mandate, which enjoins it to provide a level playing field for all free zone companies, encourage the deepening of the free zones through the attraction of more investors and discourage the existence of a monopoly that can threaten competition through excessive charges.

10) The Authority also wishes to state that it is currently engaging Intels Nigeria Limited with a view to resolving the contentious issues.

Iboro Otongaran
SA Media to MD/CEO

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Author: Destiny Young
Destiny Young, a Senior IT Engineer, is an information technology professional with over 13 years of industry experience. A Computer Science graduate with a First Class MBA (Cybersecurity) from Nexford University, Washington DC. He holds a Master of Technology degree in Information Technology from the prestigious University of South Africa (UNISA) and currently a PhD Candidate in Information Systems with interest in Cybersecurity and Cloud technology. He is a member of the British Computer Society (BSC), the Chartered Institute of Administration of Nigeria (CIA). Nigeria Computer Society (NCS), etc.

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