Use free trade zones for economic growth, productivity – OGFZA boss

…Need to understand emerging trends in industries stressed

Sarah Agbamuche | Thursday, 25 May 2017  | BUSINESS POST

One of the keys to attaining greater productivity and growth in the Nigerian economy is making use of the potentials of a free trade zone which offers an increase in investment, job creation and exports.

Umana Okon Umana, the MD/CEO of Oil & Gas Free Zones Authority (OGFZA), who stated this, also said free trade zones provide companies with streamlined regulations, reduced tax obligations and state-of-the-art infrastructure.

He said as the persistence of recession in Nigeria, especially as it affects business, is becoming unbearable, there is need to understand the emerging trends in industries and challenges arising in order to stand any chance of keeping businesses afloat.

Speaking at the first annual Nigeria Business Roundtable (NBR) 2017, organized by BusinessPost Media, Umana, who led the discussion, outlined the importance of having a free trade zone to drive growth and development in Nigeria.

“Statistics shows that there are 3 million companies arising from over 5,000 free trade zones around the world which accounts for over 45 million jobs, all showing efficacy of having an effective free trade zones in a global perspective. FTZ in developing countries can drive growth in different sectors not only in Oil & Gas, attract increased foreign investment inflow, creation of employment, transfer of skills and technology, etc.,” he said.

Dr. Chris Asoluka, the former Chairman of OGFZA, added that Free Trade Zones started in 1992 by the Calabar Export Processing Zone providing logistic services for exportation and exploration.

He said opportunities were created which led to a specialized free zone in the oil and gas sector.

“A free zone is having a foreign country within a country where there are certain incentives, especially for SME’s, (thereby) reducing the cost of doing business and (bringing about) increased inflow of investors. However, there are challenges of having an effective free zone in Nigeria because investors have choices,” Dr. Asoluka said

Dr. Tunde Sodade, the MD of Lekki Worldwide Investments Ltd, added: “There are about 30 to 33 registered free trade zones in Nigeria while less than half are active, Others are struggling because of lack of local competitive strategy and advantages, thorough business analysis and lack of basic infrastructure like viable roads, electricity, water etc.

“Lekki free trade zone succeeded because of the high population and solid investment base and room for expansion, access to ports, and such advantages may not be seen in other trade zones.”

Dr. Ogho Okiti, the CEO of Time Economics, also added that the Free Trade Zone has great potentials of increasing growth using China in 1980’s and 90s and Dubai recently as examples.

“China used its free trade zones to attract foreign capital and technical know-how, and to experiment with new economic policies which were then implemented in the rest of the country (if they were found to be successful); this means that it is imperative that Nigeria gets its design and implementation of free trade zones right,” he said.