Oduwole: FG will overhaul free zones operations to clampdown on misuse

The federal government says there are plans to overhaul and modernise the operations of free trade zones in the country by tightening regulations to combat widespread misuse and corruption.

Jumoke Oduwole, minister for industry, trade and investment, spoke recently, according to a report by Bloomberg on Thursday.

A free zone is a location set aside by the government for some companies exempted from national regulations or customs duties and allowed to produce, trade and perform other economic activities with international markets to improve the country’s exports.

The policy initiative has led to the entrance of more than 600 firms operating in 50 zones across the federation.

The publication reported that lawmakers are also considering a proposal to withdraw licences from zone-based firms that sell more than 25 percent of their production to Nigeria.

But Oduwole said revamping is necessary because a lot of companies operating in the free zones have not been exporting enough, thereby affecting economic growth.

“A lot of companies operating in the free zones have not been exporting enough,” Oduwole said.

“The fiscal authority is pushing you to lose your licence, but we are pushing you to pay tax. 

“There are plans to overhaul scores of free customs zones it operates across Africa’s most populous nation to clampdown on misuse.

“I have visited two free zones already and I am visiting another one in Lagos to make sure that we support them to produce more for export.

“Companies target Nigeria for the volume but we are targeting Africa.”

The minister added that although many of the zones lack amenities, which pushes up costs and makes them less competitive, the ministry is studying requests to let zone-based companies raise equity in Nigeria to finance investment and expansion.

On Tuesday, Adewale Adeniyi, the comptroller-general of the Nigeria Customs Service, (NCS), said Nigeria recorded a total trade value of N196.94 trillion for 2024.

Adeniyi said the figure reflects a 179.3 percent increase from N70.50 trillion recorded in 2023.