The Battle for the Soul of Free Trade Zones

There are many Free Trade Zones (FTZs) in the country. They are created to achieve specific aims and objectives. This depends largely on the Federal Government fiscal policies. The administration in power also goes a long way in determining the FTZ it establishes. For instance, what the Chief Olusegun Obasanjo’s administration set to achieve as a government was miles apart from that of the late President Umaru Yar’adua.  This is also applicable to the Dr. Goodluck Jonathan administration and the present government of President Mohammadu Buhari. These FTZs are situated in different parts of the country to attain set goals and objectives earmarked in the enabling laws. These include the Lagos Free Trade Zone, Snake Island Integrated Free Zone (SIFZ), as well as the Oil and Gas Free Zone, Onne, Rivers State.

In each of these Free Zones (FZs), there are components that make them vary from one another. For instance, the components of the Oil and Gas Free Zones Authority (OGFZA) include Onne Oil and Gas Free Zone, Rivers State; Oil and Gas Free Zone, Warri, Delta State; and the Eko Support Services (ESS), Lagos. Others in the pipeline are the Brass Oil and Gas City, Twon Brass, Bayelsa State and the Ibaka Oil and Gas Free Zone, Akwa Ibom State.

The OGFZA has a vision to be the premier agency of government responsible for promoting, securing and sustaining investments in the nation’s oil and gas free zones. Its vision aside, it also has a mission to facilitate public-private-partnership investments in the nation’s oil and gas free zones as vehicles for promoting accelerated growth and sustainable development. The OGFZA establishment was sequel to the passage of the Oil and Gas Export Free Zones Act number 8 of March 29, 1996. It is a regulatory agency which derived its powers from section 2 of the Act. The Onne Oil and Gas Free Zone is situated in the oil and gas rich Rivers State. It was the first oil and gas export free zone to be established in the country. The success of the free zones is hinged on the robust synergy between the Federal Government, some states across the country, as well as private sector operators in the development of the logistic support base for the oil and gas industry.

There is no doubt that the successes recorded by the first oil and gas export free zone in Rivers State have spurred several others to pick interest in it. The interest is not limited to existing ones such as the OGFZA but also in the establishment of new ones. Many key players in the economy, especially in the maritime industry and the oil and gas industry have their eyes firmly fixed on the free zones, especially OGFZA. Not a few players in these two critical sectors of the economy have vested interests in operations of the government regulatory agency as well as the creation of new ones in the months nay, years ahead. Their quest to ensure that they did not miss out of the largesse accruing from the operations of the OGFZA has resulted in a cut-throat fight for who gets what, how and when among the gladiators. The supremacy contest is not limited to the economy as the key actors have their backers within and outside the corridors of power.

The battle for the soul of the OGFZA has been on for years. However, it was not an open one. It was a subtle one with several intricacies and complexities unknown to the uninitiated until the recent attempt by the National Assembly to amend the OGFZA Act. The fierce fight for the free zones have made not a few to wonder in whose interests they are fighting for. Is it in the interest of ordinary Nigerians or the competitors? Are the gladiators fighting for the interest of Nigeria or for themselves? Who is afraid of the amendment of the oil and gas free zone bill presently before the National Assembly?

These and many more questions should agitate the minds of discerning members of the public, especially stakeholders in the maritime industry and the oil and gas industry. They should be alert to the key issues at stake as the legislators carry out the onerous task of amending the OGFZA Act and the NEPZA Act in the months ahead.

For instance, the SIFZ, Lagos Deep Offshore Logistics (LADOL), and two other companies were in the media recently wherein they listed what they termed as flaws in the current attempt by the upper chamber of the National Assembly to amend the existing laws covering the administration of the oil and gas free zone and strengthen its performance. In the advertorial, they tried to undermine the amendment process by insinuating, among other things, that the bill, when amended, would not only make the OGFZA a monopoly but also bring the two separate agencies in the free zones, the OGFZA and Nigeria Export Free Zone Authority (NEPZA) into conflict. According to them, such amendment would harm the economic interest of the country.

However, the OGFZA has picked holes in the arguments of SIFZ, LADOL, and their backers. The government agency drew the attention of the Senate as well as the public to the anomaly which had existed in the operations of the oil and gas free zones and the need to streamline them to be more beneficial to the Nigerian economy. At a public hearing convened by the Senate Committee on Trade and Investment which has Senator Abubakar Gobir as its Chairman, it enumerated reasons why the bill must be amended.

The public hearing was attended by several stakeholders in the maritime industry as well as the oil and gas industry. Besides the fact that it said there was no monopoly as argued by those opposed to the amendment of the bill, it stated that it would not harm competition, impede the ease of doing business and run counter to the ongoing economic reforms of the Buhari administration.

According to it, the arguments of its antagonists did not only lack merit whatsoever but also merely begging the key issues at stake.

It maintained that there would be no conflict in the operation of OGFZA and the NEPZA Acts. Continuing, it stated that the Acts establishing them are being reviewed by the National Assembly in order to strengthen them by getting rid of any imperfections and overlap that were noticed in the operations of the two agencies. For instance, the OGFZA is specifically mandated to regulate the operations of hydrocarbons (oil and gas) while the NEPZA has responsibility is to grow the free zones for non-hydrocarbon businesses for the overall interest of the national economy. The two enabling laws are to be amended to play their roles as effective and efficient agencies of government.