The Federal Government has expressed concerns over the underwhelming performance of Nigeria’s Special Economic Zones despite the country having one of the highest numbers of such zones in Africa.

The Minister of Trade and Investment, Dr Jumoke Oduwole, stated that the government is spearheading regulatory and fiscal reforms to unlock the potential of SEZs and drive economic growth.

Speaking at the third SEZs yearly meeting held on Wednesday through Thursday in Lagos, organised by the Nigerian Export Economic Zones Association, the Nigerian Export Processing Zones Authority, and the Oil and Gas Free Zones Authority, Oduwole lamented that while Nigeria boasts over 200 operational SEZs, their contribution remains suboptimal compared to global counterparts.

“With over 70 new SEZ projects announced for completion across Africa, Nigeria and Morocco lead in numbers. However, Morocco’s 12 Free Trade Zones have emerged as key drivers of the automotive and aerospace industries due to a favourable investment climate. In contrast, Nigeria’s SEZs are yet to fully realise their potential,” she said.

Oduwole warned that despite attracting over $300bn in investments and generating over N650bn in government revenue, SEZs must do more to enhance exports and economic diversification.

The minister declared that the Ministry of Industry, Trade and Investment will address regulatory bottlenecks, working closely with the Federal Inland Revenue Service, the Central Bank of Nigeria, and NEPZA to align fiscal, monetary, and trade policies while ensuring that SEZ incentives remain competitive.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, stressed the need for urgent policy updates, noting that Nigeria’s Free Zone law of 1992 no longer aligns with modern economic realities.

Oyedele argued that the country must measure the success of SEZs by their impact on exports rather than just their numbers, adding “Our non-oil exports currently stand at under $5bn annually, while Morocco records over $40bn. This is a major concern.”

On proposed tax reforms, he explained that under initial plans, Free Zone businesses exporting up to 25 per cent of their goods to Nigeria’s Customs Territory would be taxed, while those exceeding this threshold would pay tax on all their sales.

However, after engagements with stakeholders, the proposal was revised to exempt 100 per cent of exporters from taxation, while those selling in Nigeria would be taxed only on domestic sales.

Oyedele also highlighted global tax compliance requirements, stating that multinational companies operating in Nigeria must pay a minimum 15 per cent tax either locally or in their home countries.

He stressed that to prevent tax revenue losses, the government is considering a “top-up tax” mechanism to ensure Nigeria retains its fair share of corporate taxation.

The Governor of Lagos State, Babajide Sanwo-Olu, represented by the Commissioner for Commerce, Cooperatives, Trade and Investment, Folashade Ambrose-Medebem, stressed the need for strategic reforms to unlock the full potential of SEZs.

“For SEZs to thrive, we must address critical issues such as infrastructure development, access to financing, regulatory harmonisation, and globally competitive policies,” Sanwo-Olu stated.


The governor cited the Lekki Deep Sea Port and the Lekki Free Trade Zone as examples of SEZs with enormous potential to boost exports, reduce import dependency, and enhance supply chain efficiency.

Meanwhile, the Chairman of NEZA, Nabil Saleh, identified inconsistent policies and overlapping regulatory mandates as major obstacles facing SEZs, warning that if Nigeria does not improve its investment climate, investors may shift their resources to neighbouring countries offering better incentives.

“Countries across Africa are aggressively improving their SEZ policies to attract global investors. If Nigeria does not remain competitive, investors will take their funds elsewhere while still leveraging the African Continental Free Trade Area to sell to Nigerian consumers,” Saleh quipped.

The Managing Director of NEPZA and Council Member of the World Free Zone Organisation, Dr Femi Ogunyemi, reckoned that SEZs remain central to Nigeria’s industrialisation strategy. He disclosed that while SEZ exports have a cumulative yearly growth rate of just 0.79 per cent, non-oil domestic exports have grown at 3.26 per cent annually.

Ogunyemi called for policies that boost investor confidence and streamline business processes, particularly under the AfCFTA framework, which recognises SEZ-produced goods for trade across Africa.

Further, the Managing Director of OGFZA, Bamanga Jada, highlighted the investment opportunities within SEZs, citing World Bank projections that Nigeria’s economic growth will rise from 3.3 per cent in 2024 to 3.6 per cent in 2025.

Jada revealed that OGFZA is partnering with investors to establish a Compressed Natural Gas conversion centre in Onne/ Ikpokiri to cut logistics costs by up to 70 per cent while promoting cleaner energy.


https://punchng.com/minister-decries-poor-performance-of-special-economic-zones/