Nigeria’s NEPZA Reports N11.11 Trillion Contribution from Free Zones to Federation Account

The Nigeria Export Processing Zones Authority (NEPZA) announced that the country’s Free Zones contributed N11.11 trillion to the Federation Account as of October 2023. NEPZA’s Managing Director, Olufemi Ogunyemi, shared this information during an oversight visit by the Senate Committee on Industry, Trade, and Investment in Abuja.

Ogunyemi highlighted the significant role of Special Economic Zones (SEZs) in Nigeria’s economic development. According to him, the Nigerian SEZ scheme, governed by the NEPZA Act, enables operations in these zones through public, private, or public-private partnerships, driving substantial wealth and revenue generation for states and various agencies.

Financial Highlights for 2023
In 2023, the zones facilitated significant revenue for multiple entities:

Nigeria Customs Service (NCS): N59.38 billion
Immigration Services: N828.7 million
Nigerian Ports Authority (NPA): N8.738 billion
PAYEE collected by states: N998 million
Foreign Direct Investments (FDIs) and Local Direct Investments (LDIs) from 2019 to 2023 totaled $491.8 million and N1.15 trillion, respectively. Additionally, the Free Zones contributed significantly to import substitution, with over N1.62 trillion worth of cargo imported between 2019 and 2023, conserving scarce foreign exchange.

Employment and Skills Development
The zones generated direct employment for 38,429 individuals and created 172,930 indirect jobs by the end of 2023. Ogunyemi noted the scheme’s role in skills development, enabling many semi-trained artisans to start their ventures.

Challenges and Legislative Support
Despite these achievements, NEPZA faces challenges such as an outdated legal framework, regulatory incursions, numerous invitations from the National Assembly, and conflicting legislation, including the Finance Act and Customs Act. Ogunyemi called for the Senate Committee’s support to address these issues and enhance the effectiveness of the SEZ scheme.

He emphasized the transformative potential of SEZs, drawing parallels with the economic successes of countries like China and the UAE, and advocated for continued and strengthened implementation in Nigeria.

Senate Committee’s Response
Sen. Sadiq Umar, Chairman of the Senate Committee on Trade and Investment, reiterated the National Assembly’s commitment to supporting NEPZA’s mandate. He expressed willingness to sponsor an executive bill to update the legal framework if it aligns with proper legislative standards.

Umar also addressed the issue of numerous invitations from the National Assembly, urging NEPZA to maintain transparency and compliance with its goals. He highlighted the need for some zones to meet their objectives and assured that the committee would work to ensure NEPZA is well-positioned to achieve its establishment’s goals.

Conclusion
NEPZA remains committed to boosting Nigeria’s economy through the effective management and expansion of the Free Zones. The authority seeks continued legislative support to overcome existing challenges and fully realize the potential of SEZs in driving national economic growth.