FTZ: FG Working on Regulatory Framework, Policies to Ensure Exporters Bring Back Forex Proceeds

Dike Onwuamaeze

The federal government has disclosed that it is reviewing the regulatory framework and policies for the operation of the Free Trade Zones (FTZs) to ensure that manufacturers in the FTZs export and bring back their foreign currency proceeds back to Nigeria.

The government also stated that the review would stop some manufacturers that are operating in the FTZs from selling 100 per cent of their manufactured products in the Nigerian domestic market in order to discourage unfavourable competition with local manufacturers that are not enjoying the status and benefits of operating in the FTZs.

The Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, disclosed this during a stakeholders’ interactive session with the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) in Lagos, where she stated emphatically that the federal government “is not going back on the reforms. We are not going back on the policies.”

Oduwole described the FTZs as tools for economic development that had been used very successfully across the world.  

She said: “I think that what we are looking at now in Nigeria is the situation where some, not all, but some players in the FTZs have been exporting 100 per cent into the domestic market, which of course, distorts things for the manufacturers within Nigeria that are paying taxes.

“So we are working on the regulatory framework and we have discussed with the Central Bank of Nigeria and other stakeholders on policies that can make sure that exporters are comfortable and committed to bringing their exports proceeds back into Nigerian economy.

“As a ministry, we are making sure that there is adherence and compliance to the design and the architecture of the FTZs to make sure that we all practice what we need to practice. And that there is discipline in the system and that everyone is committed.”

The minister explained that the essence of the free trade zones is to give manufacturers some tax reliefs that would facilitate the export of their goods.

“So there are a percentage of goods that they can export into the domestic market, about 25 per cent, after which they should pay the taxes. They can export more but they should pay the taxes. So that is how the free zones are designed to run and there has been historical discussions on whether members can export fully into the market or not.

“I understand that there are issues between the Manufacturers Association of Nigeria (MAN) and other stakeholders (in the FTZs). But I just have to say that we are one economy, and what we want for the Nigerian economy is the same wherever anybody is.”

She stated further that the Federal Ministry of Industry, Trade and Investment (FMITI) is committed to driving exports of Nigerian made products, both in goods and services, in order to exponentially increase the country’s earnings in foreign exchange, particularly in dollars.

“We also want to make sure that those exports proceeds come back,” she added.

She explained that everyone has the opportunity to be in the FTXs or not, adding that it is a new day for everyone to make their decisions.   

“You can produce in the FTZs and outside the FTZs depending on your business model. So that is the message for 2025. The federal government realigns and we are going to make sure that the policies are consistent and well implemented,” she said.

The National President of NACCIMA, Dele Kelvin Oye, said that the stakeholders’ meeting with the minister was to discuss “on agreements and frameworks on how we will work together.  

He said, “We are talking on how to increase our competitiveness as a nation. This is the basic understanding that we have achieved.”