Business Hilights

Tracking Nigeria's Headline Business News Online

Okey Enelamah

FG heeds to Dangote, plans review of FTZs’ incentives for competitiveness

Ad 2
Ad 3

Barely one week after the President of Dangote Group, Alhaji Aliko Dangote at the University of Ibadan, stressed that political will and success mentality remain key drivers of industrialization, the Nigeria Industrial Council and Competiveness Advisory Council (NICCAC) has moved to review fiscal arrangements and incentives applicable to the country’s free trade zones (FTZs).

Vice Chairman of the Council, who doubles as the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, said the Council has been working to review the fiscal arrangements and incentives available to operators in the zones vis-a-viz the custom territory with the view to ensuring competitiveness of goods produced in the FTZs in the local and export markets.

A statement from the Strategy and Media Adviser to the minister, Bisi Daniels, revealed that going forward, all approved enterprises within FG-owned FTZs are entitled to a number of incentives.

“These include exemption from legislative provisions pertaining to taxes, levies, duties and foreign exchange regulations; full repatriation of foreign capital investment with capital appreciation of the investment at any time; up to 100 per cent of foreign ownership allowable; and no import or export licences required for operations; among others.

The minister noted that NICCAC has identified some areas that need redress, saying “manufacturers outside the zones have complained about unfair competition as the tax concessions available to FTZ operators do not take into cognizance the fact that up to 100% of goods produced in the free zones can be sold into the Nigeria customs territory; inadequate definition of value addition and certification; and cash flow advantage to free zone operators who pay duties on constituent raw materials equivalent of finished goods after production and processing, while manufacturers outside the zones pay duties and other relevant levies upfront”.

“However, in the study, free zone operators raised concerns over their inability to effectively compete in the export market, high administrative charges on turnover and exclusion from export incentives.

“To address these issues and others affecting the efficiency of the free zones, a technical committee comprising representatives of the Nigeria Export Processing Zones Authority (NEPZA), Nigeria Export Promotion Council (NEPC), Nigeria Investment Promotion Commission (NIPC), the Federal Ministry of Finance (FMF), the Federal Ministry of Interior (FMI), the Central Bank of Nigeria (CBN), the Nigeria Customs Service (NCS), the Standards Organisation of Nigeria (SON) as well as selected operators will be set up to review and recommend appropriate fiscal and operational changes to the free zones to ensure that goods produced in the free trade zones are competitive in the export market and that concerns around unfair competition in the Nigeria Customs Territory from goods produced in the free trade zones are addressed.

“Also, future licensing of free trade zones should be closely linked to priority sectors for industrialization and export growth; while NEPZA is to implement comprehensive measurement and certification guidelines and monitoring mechanisms for determining value addition for each prohibited item,” the minister assured.

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.