The Federal Government has commenced efforts to strengthen the regulatory framework governing Nigeria’s Special Economic Zones (SEZs), with a focus on curbing the abuse of duty-free concessions while protecting legitimate investors and existing incentives.
Gatekeepers News reports that the Minister of Industry, Trade and Investment, Jumoke Oduwole, gave the assurance as the Special Economic Zones Legislative and Regulatory Reform Committee began a drafting retreat to translate ongoing consultations into revised legislative and regulatory instruments.
The retreat brought together officials from the Federal Ministry of Justice, the Federal Ministry of Industry, Trade and Investment (FMITI), the Nigeria Export Processing Zones Authority (NEPZA), the Oil and Gas Free Zones Authority (OGFZA), the Nigeria Customs Service (NCS) and the Nigeria Revenue Service (NRS).
Stakeholder presentations by the Nigeria Economic Zones Association (NEZA), the National Single Window, Customs and the NRS opened the retreat, with issues raised during a September 17 stakeholder engagement now being considered in the drafting process.
Oduwole stressed that the reforms were not intended to dismantle the free zones regime or withdraw incentives that have attracted investments into the country.
She said incentives, including duty-free importation of capital goods, tax exemptions on qualifying export profits, 100 per cent foreign ownership and unrestricted repatriation of funds, would remain part of the framework.
“A free zone cannot become an alternative route into the Nigerian domestic market on terms unavailable to manufacturers operating in the Customs Territory,” the minister said.
“But this is not an argument against Free Zones. It is an argument for protecting them. Legitimate investors who have committed capital to Nigeria deserve certainty.
“The rules must be clear. Institutional responsibilities must be clear. Customs and tax treatment must be predictable. And lawful incentives must remain defensible.”
FG Targets Abuse of Free Zones
The reform follows renewed scrutiny of the free zones scheme after recent customs enforcement actions over allegations that goods imported under free zone concessions were subsequently diverted into the domestic market.
Oduwole said the government’s objective was to address loopholes in the system without undermining businesses that had complied with existing regulations.
“The choice before Nigeria is not between preserving the Free Zones scheme and dismantling it. It is whether we can preserve what works, correct what does not and build a framework capable of serving the economy we are becoming,” she said.
The minister explained that the inclusion of Customs and the NRS as core members of the drafting committee was deliberate, given their roles in implementing customs and tax provisions under the revised framework.
Among the issues under consideration are the treatment of existing investments, transition arrangements for current licensees, the proposed 75/25 export and domestic-sales framework, and possible phased implementation.
The committee is also examining customs coordination and joint inspections, simplified customs exit procedures, foreign exchange and tax reporting, as well as the treatment of services provided within free zones.
The proposed reforms seek to reduce multiple regulatory interfaces, with NEPZA and OGFZA retaining coordinating responsibilities within their respective statutory mandates.
A key principle emerging from the consultations is “one authority, one visit, one record”, aimed at reducing regulatory bottlenecks for businesses operating within the zones.
Oduwole described the principle as an important benchmark for the final implementation framework.
Digital Businesses to Gain Access to Free Zones
The proposed reforms also seek to expand the regulatory framework to accommodate digital businesses.
For the first time, the draft regulations expressly recognise digital free zones and digital free zone enterprises, with proposed licence categories including innovator and sandbox licences for businesses that may not require a conventional physical presence.
The development follows President Bola Tinubu’s directive to move the Digital Free Zones initiative into implementation, with a roadmap for full launch within 180 days.
NEPZA has licensed Itana as Nigeria’s first digital free zone, while the Africa Finance Corporation (AFC) is backing the $500 million Itana Innovation project at Alaro City.
Oduwole said Nigeria’s export ambitions should extend beyond physical goods to include digital products and services.
“Nigeria’s future exports will not only leave our ports in containers,” she said.
“Nigerian companies increasingly export technology, financial and professional services, creative products, intellectual property and other digitally delivered services.”
The minister said a modern special economic zones regime must be capable of attracting digital businesses as deliberately as it has historically attracted manufacturers.
