Operators Rekindle Call For Onshore Banking As Lekki, Three Other Free Zones Fetch Over N12tn Investments
Free Trade Zones are vital components of Nigeria’s economic strategy, designed to boost investment, enhance exports, and create job opportunities.
Established to facilitate trade and encourage industrialization, these zones provide unique incentives to both local and foreign businesses
The Nigerian Export Processing Zones Authority (NEPZA) was established in 1992 to oversee and promote the development of Free Trade Zones in Nigeria. NEPZA’s primary mission is to create a conducive environment for businesses to thrive, enhance Nigeria’s export capacity, and attract foreign direct investment.
Over the years, the Free Zones in Nigeria have emerged as a key strategy for stimulating economic growth, attracting foreign direct investment, and fostering industrialization.
By providing a regulatory environment conducive to trade and investment, FTZs are pivotal in Nigeria’s economic transformation agenda.
Findings by THE WHISTLER revealed that four free trade zones have successfully attracted a total investment of over $8bn within their years of operations, significantly contributing to local economic activity and fostering international trade relations.
Based on the N1,600 per dollar exchange rate of the Central Bank of Nigeria, the $8bn translates to about N12tn.
The trade zones located in Lagos State include the Lagos Free Trade Zone, Lekki Free Trade Zone, Alaro City and the Lagos Deep Offshore Logistics (LADOL).
The committed investments were obtained by THE WHISTLER from top officials of the zones during a media tour of the free trade zones organised by the Nigeria Export Processing Zones Authority.
A breakdown of the figure provided by the officials revealed that $2.5bn investment had been attracted from investors to develop the Lagos FTZ, while the Lekki FTZ had attracted over $4bn in investments.
For Alaro City which is also one of the Free Trade Zones Located in Lagos, about $1bn had been invested in the development while over $500m had been used to develop LADOL, a privately owned logistics and engineering facility.
Speaking to THE WHISTLER during the tour, the Manager of Business Development and Marketing, Lagos Free Zone, Chinju Nwankwo-Udora, said the zone is strategically located along the Lekki Corridor, close to the Lagos seaport.
Established to boost industrialization, trade, and investment, Nwankwo-Udora said the Lagos Free Zone is creating a conducive environment for both local and foreign businesses.
Situated near the Lekki Deep Sea Port and the international airport, she told THE WHISTLER that LFZ offers excellent access to global shipping routes and logistics networks.
She said, “The zone is equipped with modern infrastructure, including well-planned roads, utilities, and communication systems, designed to support various business activities.
“LFZ attracts a wide range of industries, including manufacturing, logistics, technology, agriculture, and pharmaceuticals, creating a vibrant economic ecosystem.”
Speaking further, she noted that the zone, established in 2012 has achieved remarkable accomplishments through world-class infrastructure to enable ease of doing business for its investors.
She noted that the zone currently accommodates 30 registered and operational companies with plans to attract 150 companies in the coming years.
She said, “The Lagos Free Trade Zone has contributed about $2.5bn in committed investments and employed investments, This includes the Lekki ports project which was $1.2bn, the land acquisition of the free zone and other factories that have been set up and infrastructure we have been put in place till date.”
Nwankwo-Udora added that in 2023, Lagos Free Zone alone contributed over N40bn in customs duties, and over N400m was remitted as PAYE to the Lagos State government.
She said that facilities have been established to enhance the ease of doing business, stressing that, “Enterprises only have to bring in their types of machinery and begin manufacturing.
“By the time we finish our infrastructure, we plan to have 150 companies in the zone creating thousands of jobs and looking forward to contributing 2.5 per cent to the country’s Gross Domestic Product.”
For the Lekki Free Zone, which is one of Nigeria’s premier Free Trade Zones that has so far attracted over $4bn in investments, officials told THE WHISTLER that it was strategically established to promote industrialization, attract foreign investment, and boost economic development in Nigeria, particularly in the Lagos region.
The zone is situated along the Lekki Corridor, close to the Lekki Deep Sea Port and the international airport, providing excellent connectivity for global trade and logistics.
Speaking to THE WHISTLER, the Deputy Managing Director, of Lekki Free Zone Development Company, Bolatito Ajibode, said the zone is equipped with modern infrastructure, including well-developed roads, reliable utilities, and advanced communication systems, essential for facilitating business.
According to her, the zone caters to a wide array of industries, including manufacturing, logistics, agro-processing, oil and gas, and technology, fostering a diverse economic ecosystem.
Ajibode further told THE WHISTLER that about 3,200 workers visit the zone daily to earn a living, highlighting the significant employment opportunities created by the zone.
She said, “The Lekki Free Zone generates thousands of jobs, providing employment opportunities and fostering skills development in the local workforce.
“By facilitating export-oriented production, the LFZ contributes significantly to Nigeria’s export capacity, enhancing the country’s trade balance.
“The level of foreign direct investment that we have attracted in the free zone is more than $4 to $5bn from infrastructure to respective industries and raw material production.
“In terms of revenue to the government, we also remit pay as you earn tax to the state government.”
She explained further that the zone, which is the largest with a land area of 3,000 hectares, currently has 60 enterprises in operation and an additional 30 under construction across various sectors, including manufacturing, real estate, logistics, recreation, and oil and gas.
On its challenges, she noted the devaluation of the naira has created a challenge for investors as no one will want to make investment decisions without a stable exchange rate market.
She added, “The first challenge is the road infrastructure from Lekki to Eleko junction, but that has been handled by Dangote and will be completed soon.
“Another challenge is the devaluation of the naira. We currently sell in dollars, and it has been a bit of a challenge for investors, whether coming in or going out, especially Nigerian investors, to buy our land.
“We have different options for large-scale manufacturers and small retailers, but it’s people who have deep pockets that can come in. Nigerian investors struggle to cough out the money, which is why we have more foreigners here, like 80 to 20 per cent.”
In a bid to make it easier to invest in the zone, she said the company has implemented a ‘buy now and pay later’ policy to assist businesses set up their operations.
THE WHISTLER also spoke to officials of Alaro City Free Zones which had attracted over $1bn since inception and currently has about 75 companies operational.
The Project Director, Morgan Oriahi, said that the city’s proximity to the Lekki Deep Seaport, the airport, and well-integrated road infrastructure, were part of the business growth enablers in the free zone.
He said about five years after its inception, Alaro City is home to the largest residential community in Nigeria’s biggest free trade zone.
According to him, leveraging Alaro City’s strategic platform, Ariel Foods FZE, a manufacturer of ready-to-use therapeutic foods (RUTF), has transformed Nigeria from a net importer to a net exporter of RUTF.
“Ariel Foods now meets 100 per cent of Nigeria’s domestic demand and exports to 17 countries from its state-of-the-art facility in Alaro City.” He added.
He said this year marked a series of significant milestones for Alaro City, including major infrastructure developments, an influx of industrial and residential growth, and the forging of strategic partnerships.
“With over 75 companies now operational within its industrial park, Alaro City is playing a pivotal role in Nigeria’s economic diversification efforts.
“The expansion of residential offerings, such as the launch of Didara Waters and continued development of Universal Homes, underscores Alaro City’s commitment to providing modern, community-centric living spaces in Nigeria,” he added.
The Managing Director of LADOL, Dr Amy Jadesimi, who also spoke on the economic impact of LADOL highlighted the need to boost manufacturing activities through free trade zones.
She stated that the zone, which serves as a logistics hub for multinational industrial and offshore companies, intends to diversify into agricultural processing, parts manufacturing, and other industrial activities.
She said, “In 23 years, we have invested $500m, and we are looking at directly and indirectly creating 30,000 jobs, and in creating those jobs, we want to make Nigeria an industrial hub,”
“We have had every challenge you can think of; we are developing infrastructure and facilities to overcome these hurdles. One of the biggest hurdles is the self-belief in Nigerians. If we supported each other, no foreigner would do what a Nigerian would do in their country. We have to believe in each other more and I believe if we do that, challenges and barriers would have been easier to manage.”
According to NEPZA, free zones in the country create an enabling environment to enhance economic growth and development of the export-oriented manufacturing sector.
The Lagos Free Zone Administrator, Nigeria Export Processing Zones Authority, Mr Garba Hayatu who identified Offshore Banking as one of the major challenges in the zone said NEPZA would continue to ensure effective regulations of Free Trade Zones towards fast-tracking national economic development.
The Head, of Corporate Communication, NEPZA, Dr Martins Odeh stressed the need for State Governments and other investors to further key into the Free Trade Zones scheme to enhance industrialization, economic diversification and development in the country.
While soliciting the support of Stakeholders in developing the Free Trade Zones in the country, Odeh said NEPZA would continue to embark on programmes aimed at protecting and encouraging investors in the sector for the overall good of Nigeria’s economy.
Earlier this year, the NEPZA MD, Olufemi Ogunyemi, Nigeria’s free zones, numbering 46 licensed zones in 2022, have provided 38,429 direct employment jobs and an additional 172,930 indirect jobs as of the end of 2023.
Operators Rekindle Call For Onshore Banking As Lekki, Three Other Free Zones Fetch Over N12tn Investments is first published on The Whistler Newspaper
