Federal Government moves to introduce digital economic zones and tighten rules on domestic sales…..
The Federal Government says Nigeria’s free trade zones have attracted more than $200 billion in foreign investment and over N900 billion in domestic capital, while supporting more than 100,000 direct jobs and over 500,000 additional jobs across related supply chains, logistics networks and host communities.
The Minister of Industry, Trade and Investment, Jumoke Oduwole, disclosed this during a virtual meeting with stakeholders in the Special Economic Zones sector in September.
The meeting formed part of the government’s efforts to overhaul the regulatory framework for the zones and strengthen their contribution to investment, industrial production and non-oil exports.
Oduwole said the government was reviewing the regulations of the Nigeria Export Processing Zones Authority (NEPZA) to ensure they reflect changes in modern business models, including technology-driven and digital operations.
“Across the scheme, the authorities record over $200bn of foreign investment and over N900bn of domestic investment, more than 100,000 direct jobs, and over 500,000 when the supply chains, the logistics networks and the host communities are counted. So you are all, indeed, valuable investors and contributors to the Nigerian economy. This has not and will not change,” Oduwole said.
According to the minister, the proposed reforms are intended to build on the investment and employment already generated by the zones while addressing regulatory gaps that have affected the credibility and competitiveness of the scheme.
She said the review followed consultations involving government agencies, lawmakers and private-sector operators, with the objective of maintaining Nigeria’s appeal to investors while improving accountability.
One of the major issues identified by the government is the diversion of goods produced within free zones into the Nigerian Customs Territory while businesses continue to benefit from incentives designed to support export-oriented activities.
Oduwole said the revised framework would reinforce the export focus of the scheme by clearly defining the existing 75 percent export and 25 percent domestic-sales arrangement and ensuring that domestic sales comply with applicable Nigerian tax laws.
The proposed regulations will also spell out the responsibilities of the agencies responsible for taxation, customs and the administration of the zones.
Under the framework, NEPZA and the Oil and Gas Free Zones Authority will continue to oversee licensing and operations, while the Nigeria Revenue Service will remain responsible for tax administration.
The Nigeria Customs Service, she added, will retain responsibility for customs control, valuation, classification and enforcement.
The minister said the revised framework would also expand the scope of the scheme to accommodate businesses that do not depend on conventional physical locations, particularly technology-based companies.
“The Revised NEPZA Regulations and Operational Guidelines create, for the first time in Nigeria, Digital Free Zones and Digital Special Economic Zones – zones that operate on a platform rather than a perimeter, with no requirement of physical presence,” she said.
Oduwole said the framework would introduce new licence categories, including an Innovator Licence for businesses operating in emerging sectors where regulatory structures are still evolving.
She added that reporting requirements and fees would be adjusted to reflect how digital businesses operate and generate revenue.
The Executive Secretary of NEPZA, Toyin Elegbede, welcomed the proposed reforms but urged the government to protect companies that had already invested under the existing regulatory framework.
“Our members recognise the need for a strong, transparent and well-regulated Special Economic Zones regime, and we welcome the opportunity to engage the government before the framework is finalised. Our priority is to ensure that the reforms address genuine gaps without creating new uncertainty for operators who have invested and modelled their investment on the strength of the existing regime at the time of investment,” Elegbede said.
He said stakeholders wanted a competitive free zones environment capable of attracting fresh investment, protecting legitimate businesses and increasing production and exports.
Similarly, the Chairman of NEPZA, Hadi Mutallab, stressed the need for a smooth transition that would not place existing investments at risk.
“The reform of Nigeria’s Special Economic Zones is necessary to strengthen the integrity of the scheme and ensure that the incentives provided deliver the investment, production, jobs and exports for which they were intended. At the same time, we must protect legitimate operators who have invested in our Zones and ensure that the transition to the new framework is clear, predictable and does not undermine existing investments,” Mutallab said.
Oduwole said the government would continue to support legitimate incentives that serve the objectives of the zones, while enforcing compliance among operators.
She said the broader goal was to transform the Special Economic Zones into stronger drivers of non-oil exports and support President Bola Tinubu’s target of growing Nigeria’s economy to $1 trillion by 2030.
