Federal Government has commenced reforms of Nigeria’s special economic zones as part of efforts to strengthen regulation and address alleged abuse of concessions granted to businesses operating in the zones.
Gatekeepers News reports that Jumoke Oduwole, minister of industry, trade and investment, disclosed this as the Special Economic Zones Legislative and Regulatory Reform Committee began a drafting retreat aimed at converting ongoing consultations into revised laws and regulations.
The retreat brought together officials from the Federal Ministry of Justice, the Federal Ministry of Industry, Trade and Investment, the Nigeria Export Processing Zones Authority (NEPZA), the Oil and Gas Free Zones Authority (OGFZA), the Nigeria Customs Service and the Nigeria Revenue Service.
Representatives of the Nigeria Economic Zones Association, National Single Window, Customs and the NRS also made presentations, with issues raised during a September 17 stakeholder meeting being considered in the drafting process.
Oduwole said the reform was not aimed at dismantling the free zones regime or withdrawing incentives available to legitimate investors.
She said existing incentives, including duty-free importation of capital goods, tax exemption on qualifying export profits, 100 percent foreign ownership and unrestricted repatriation of funds, would remain under the proposed framework.
“A free zone cannot become an alternative route into the Nigerian domestic market on terms unavailable to manufacturers operating in the Customs Territory,” Oduwole said.
The minister said the government was seeking to protect the integrity of the free zones while addressing weaknesses in the existing system.
“The rules must be clear. Institutional responsibilities must be clear. Customs and tax treatment must be predictable. And lawful incentives must remain defensible,” she said.
The reform follows increased scrutiny of the free zones scheme after recent Customs enforcement operations linked to allegations that goods imported under free zone concessions were subsequently diverted into Nigeria’s domestic market.
Oduwole said the government wanted to address such practices without penalising operators that had complied with existing regulations.
Among the issues being considered are the treatment of existing investments and transition arrangements for current licensees, as well as a proposed 75/25 framework governing exports and domestic sales.
The committee is also examining customs coordination and joint inspections, simplified customs exit procedures, foreign exchange and tax reporting, and the treatment of services provided within free zones.
The proposed framework is expected to reduce the number of regulatory interfaces businesses face, while NEPZA and OGFZA would retain their coordinating roles within their respective statutory mandates.
A key principle under consideration is “one authority, one visit, one record”, aimed at reducing regulatory burdens on businesses operating in the zones.
The reform will also expand the framework to cover digital businesses. Proposed regulations would formally recognise digital free zones and digital free zone enterprises, including innovator and sandbox licences for businesses that may not require conventional physical facilities.
Oduwole said Nigeria’s export ambitions should go beyond physical products, noting that Nigerian firms increasingly provide technology, financial and professional services, creative products, intellectual property and other digitally delivered services.
