In line with efforts to accelerate the pace of economic growth in the country, the federal government has called on potential investors to revive, reform and transform the Calabar and Kano Free Trade Zones (FTZs) in order to make them functional and globally competitive.
The Minister of Industry, Trade and Investment, Adeniyi Adebayo, said this yesterday in Lagos, during a road show for the concession of Calabar and Kano FTZs, organised by the National Council of Privatisation (NCP), through its secretariat, the Bureau of Public Enterprises (BPE) in conjunction with Federal Ministry of Industry, Trade and Investment and the Nigeria Export Processing Zones Authority (NEPZA).
Adebayo, who linked African countries like Ethiopia and Ghana, which had leveraged FTZs as designated areas for promoting trade openness and investment facilitation for growth and development, lamented that efforts to replicate the success of the FTZ model in Nigeria had not recorded the same success.
He said the two FGN-owned Special Economic Zones (SEZs) in their current state could not significantly improve the country’s competitiveness nor help the drive to effect structural change and economic diversification.
He hinged on poor infrastructure, reliance on treasury to finance capital expenditure, lack of link between the industrialisation strategy of government and the zones, among others as factors responsible for Nigeria not meeting up with the needed structural change.
According to him, “The ultimate aim for the free trade zone scheme is to attract foreign direct investments, generate employment, enhance trade and industrialisation, promote exports, enhance foreign exchange earnings and encourage transfer of technical knowhow.”
He envisaged that the two FTZs when fully developed within a coherent, well-designed and executed framework could deliver tangible outcomes like their counterparts in other climes where FTZs have contributed significantly to their economic development.
“For instance, he said 30 years after the FTZs scheme was adopted in Nigeria, cumulative investment has only stood at about $20 billion, whereas in about 30 years when the first free zone was established in Jebel Ali area in Dubai, the UAE has emerged the destination of choice for global trade and investment.
“In 2015, he said JAFZA alone generated trade worth $87.6 billion and accounts for almost 32 per cent of the total Foreign Direct Investment (FDI) flowing into the UAE and for about 24 per cent of Dubai’s annual Gross Domestic Product (GDP).
“In view of the above and given the large investments required to transform the zones, he said private sector investment was important to reduce government’s financial burden and the associated business risks,” he added.
The minister, said the 25-year concession done under the Build-Rehabilitate-Operate and Transfer (BROT) model was adopted to ensure that private sector investors with the requisite technical competence and financial capability that would emerge from a competitive transparent process are allowed to invest, operate and manage the facilities during the period, while the ownership remains with the federal government.
The Director General of BPE, Alex Okoh, said with the level of participation, the level of interest by prospective investors had been quite strong.
He said the Bureau published the request for qualification, earlier last month, which was the first stage of the process, while the deadline for submission was fixed at May 23.
The Managing Director, NEPZA, Prof. Adesoji Adesugba, who was represented by Director, Zones, NEPZA, Muazu Ruma, highlighted the significance, benefits and incentives of investing in the Calabar and Kano FTZs.