The Federal Government has moved the reform of Nigeria’s Special Economic Zones (SEZs) from broad stakeholder consultations to the drafting stage, assuring investors that legitimate investments and lawful incentives under the existing regime will be protected.
The Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, gave the assurance as the Special Economic Zones Legislative and Regulatory Reform Committee commenced a dedicated drafting retreat involving the Federal Ministry of Industry, Trade and Investment, the Nigeria Export Processing Zones Authority (NEPZA), the Oil and Gas Free Zones Authority (OGFZA) and the Federal Ministry of Justice.
The retreat also brought together key institutions and stakeholders, including the Nigeria Economic Zones Association (NEZA), National Single Window, Nigeria Customs Service and Nigeria Revenue Service (NRS), whose inputs are being incorporated into the proposed legislative and regulatory framework.
The participation of the Customs Service and NRS in the drafting process is intended to ensure that customs and tax provisions applicable to Free Zones are developed with the direct input of the agencies responsible for their administration.
The reform also incorporated concerns raised by operators, enterprises, industry associations and professional advisers during a stakeholder engagement held on September 17.
The exercise comes amid renewed attention to the integrity of the Free Zones scheme following recent enforcement actions by the Nigeria Customs Service over alleged diversion of goods admitted under Free Zone concessions into the domestic market.
Addressing the concerns, Oduwole said the reform was not intended to dismantle the Free Zones regime or withdraw lawful incentives that have made the zones attractive to investors.
She reaffirmed the continued relevance of incentives including duty-free importation of capital goods, tax exemption on qualifying export profits, 100 per cent foreign ownership and unrestricted repatriation of capital and profits, subject to applicable laws and regulations.
“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.
She, however, stressed that the objective was to protect the integrity of the scheme while providing certainty to investors.
“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,” she said.
Oduwole said the reform offered an opportunity to preserve the elements of the Free Zones regime that were working, address identified gaps and develop a framework capable of supporting Nigeria’s evolving economy.
Chairman of NEPZA, Hadi Mutallab, said the reform was necessary to strengthen the integrity of the scheme and ensure that its incentives translated into increased investment, production, job creation and exports.
He called for the protection of legitimate operators and a clear, predictable transition arrangement for businesses moving into the new framework.
The Executive Secretary of NEZA, Toyin Elegbede, also welcomed the Federal Government’s consultative approach, saying operators recognised the need for a strong, transparent and well-regulated SEZ regime.
Key issues being considered in the drafting process include the treatment of existing investments and transition arrangements for current licensees, the proposed 75/25 export-to-domestic-sales framework, customs coordination and joint inspections, foreign exchange and tax reporting, as well as the treatment of services provided within the zones.
Stakeholders also proposed the principle of “one authority, one visit, one record” as a means of reducing multiple regulatory interfaces, while retaining NEPZA and OGFZA as coordinating authorities within their respective statutory mandates.
A major feature of the proposed regulations is the formal recognition of Digital Free Zones and Digital Free Zone Enterprises, with new licence categories, including Innovator and Sandbox licences, for businesses that may not require conventional physical presence.
According to Oduwole, the expansion reflects changes in global trade and Nigeria’s growing services economy, noting that the country’s future exports would increasingly include technology, financial and professional services, creative products, intellectual property and other digitally delivered services.
The reform, anchored on the Renewed Hope Agenda, is expected to support efforts to expand Nigeria’s productive base, deepen non-oil exports, attract investment and create jobs.
The Ministry also acknowledged the support of the National Assembly, including the House Committee on Commerce chaired by Hon. Ahmed Munir, and said stakeholder consultation would continue as the legislative and regulatory framework progresses towards finalisation.
