August 23, 2011
Nigeria markets Free Trade Zone in Lagos
by Joshua Bassey and Chuka Uroko
Close to 70 companies cutting different of the sectors of the economy have signaled strong interest to do business within the Lekki Free Trade Zone (LFTZ) in Lagos...
Also known as the “New Lagos;” the corridor is arguably the fastest growing city in Africa, with huge construction projects, a seaport and airport projects...rica.
Though the corridor as a real estate corridor is not developing as fast as it is supposed to, many public and private real estate schemes have been developed and many more in progress. Experts in real estate say that this corridor offers huge opportunities for long term investors and homeowners.
For the state government, the current investment profile is mere scratching of the surface for an industrial, business and trade zone that offers multi-billion dollar investment opportunities in agriculture and agro-processing, clothing and textiles, construction and materials, electronics, food and beverages, forestry and paper, healthcare and pharmaceuticals, manufacturing, leisure and tourism, property, mining and metals, oil and gas among others.
... a Memorandum of Understanding (MoU) has been signed between the Nigerian National Petroleum Corporation (NNPC) and a Chinese consortium to jointly finance the establishment of $8 billion refinery within the trade zone. The deal is part of the $25 billion joint funding for the construction of three new refineries and a petrochemical plant with combined capacity of 885, 000 barrels per day. The other two are to be sited in Kogi and Bayelsa States.
The Chinese State Construction Engineering Corporation has pledged to assist in procuring funding on competitive terms to ensure that bona fide Chinese investors take up at least 25 percent of equity holding in the project. While the Chinese corporation will provide 80 percent of the capital, NNPC will be bridging the remaining 20 percent gap.
On its part, Lagos State as co-investor in the project is providing infrastructure including land, acces roads and adequate electricity supply. When completed, the Lagos refinery is expected to produce 300,000 barrels of crude oil per day and 500,000 metric tonnes of liquefied petroleum gas (LPG) per annum.
In addition, the NNPC is also supporting the LFTZ by assisting with the arrangements for the supply of natural gas feedback for the manufacture of petrochemicals, fertilizer and other much desired industrial products. But the state government says boundless opportunities exist within the zones in many other sectors for exploitation, and many incentives to aid profit making by investors.
To further make the zone accessible, the state government has entered into public private partnership with Lekki Concession Company (LCC) which is presently undertaking the expansion and reconstruction of the Lekki-Epe Expressway for ease of access by road to the zone which sits on a total land of 16,500 hectares.
...the proposed Lekki International Airport is designed to facilitate access to the zone by air, as the state government is ready to partner with serious investors in the development of the various aspects of the airport. The airport is estimated to cost about $650 million, and is being designed to handle about 5 million passengers annually and a modular terminal for future expansion.
...available incentives for investors in the zone include one-stop approval of all permits, operating licenses and incorporation papers, 100 percent foreign ownership of investment and joint venture entities.
..100 percent repatriation of capital, profits and dividends out of Nigeria, non requirement of import or export licenses by enterprises operating within the zone, Customs duty-free and no quota restriction for all imported raw material products, machinery and equipment, consumer goods, as well as any other goods for investment projects in the zone.
...100 percent of finished products manufactured, assembled or produced in the zone can be sold into the Nigerian domestic market, as well as exemption from all taxes, customs duties and levies from the federal, Lagos State and local governments.
... goods manufactured in Nigeria are entitled to preferential tariffs in the EU, as Nigeria is a member country of the Lome convention.
Nigeria to review free trade zone operations
The Nigerian government is set to carry out a comprehensive review and restructuring of the operations of the 24 licensed Free Trade Zones (FTZs) across the country, according to Trade and Investment Minister Olusegun Aganga.
''The objective is to make the FTZs functional and efficient and contribute meaningfully to the country’s drive towards economic growth and development,” the minister said.
Out of about 24 FTZs licensed by the Nigerian Government since 1992, less than 13 are currently operational.
Aganga said the proposed review was aimed at enhancing their capacity to create jobs, generate wealth and contribute significantly towards the nation’s economic growth and development.
FTZs are special industrial and commercial zones set up by the Nigerian Government to facilitate inflow of FDI, encourage the manufacturing of goods for export and boost technology transfer and job creation.