Stakeholders in Nigerian Free Trade System have faulted plans by Federal Ministry of Trade to restructure free trade zones management, calling on the Presidency to reject the proposal from the ministry.
“The exercise should be seen as a charade and an attempt to misguide the Federal Executive Council in taking decisions that would jeopardize all the efforts that had been hitherto put into the free zone scheme.
“It is our recommendation that the Federal Executive Council kindly considers the adoption of Oransanye Committee’s report and merge the two regulatory authorities in the interest of the scheme and the nation at large. This is the only way to sustain investors’ confidence in the scheme and the country”, the stakeholders led by Dr Adesina Agboluaje affirmed.
In an articulated response to a draft report from the Ministry, the stakeholders represented by Sinolat Consultants described the report as flawed in term of its method of data collection, its very low coverage, its reliance on false data, its non-inclusion of stakeholders, its misrepresentation of facts, its false attribution to World Bank and its disregard of international best practices among others.
Signed by Dr Adesina Agboluaje, Principal partners of Sinolat, the stakeholders’ dissected the entire report from the ministry and concluded that the real intention was to destroy NEPZA in favour of OGFZA in which INTELS is a major shareholder.
Some excerpts from the stakeholders’ submission are as follows:
“There is nothing in the document to show that any stakeholder engagement activities or inputs ever took place. If at all, only CFTZ (NEPZA) and OGFZA (OGFZA) were engaged out of about 48 Free Zones. There is no record of documents or information received from the stakeholders.
“No engagement or interaction with licensees under NEPZA apart from the CFTZ which is just one out of about 45 zones under NEPZA. No request for submission of information was made to any of the free zones under NEPZA apart from the CFTZ.
“There is variance in the analysis done between the two Authorities where 5 years was used for NEPZA and 20 years for OGEFZA respectively to arrive at a conclusion. Using only two sample, CFTZ for NEPZA and OGEFZ for OGEFZA, for Research (meant to be qualitative) out of 48 zones amounts to nothing but a wilful intention to misrepresent and mislead the FEC with a misleading and deceptive result/research.
“The review and analysis failed or neglected to acknowledge the fact that the sectors, types and numbers of zones managed by both agencies are different. Secondary data submitted was incomplete and so inadequate to arrive at such overreaching conclusions contained in the Report.
“Non validation of Data. No attempt was made to even validate data published in the report especially as regards employment figures posted in favour of OGEFZA”, the stakeholders affirmed.
Faulting option two which transform OGFZA into sole FTZ Regulatory Authority, while NEPZA becomes FTZ Asset Holding Company, the stakeholders said ” this view runs contrary to the position of the Federal Government which necessitated the approval of FEC for the privatization of the CFTZ to allow NEPZA function only as a regulator instead of assets manager.
“There are only two public zones in Nigeria, namely CFTZ and KFTZ which are being managed by NEPZA. All other zones are private zones. Where are the zones/assets being proposed for NEPZA to manage their assets?
“The World Bank Group has clearly stated its support for the separation of regulator and operations/development functions. WBG’s position is that Government agencies should concentrate on regulations and leave zones development and management for private investors. It is therefore contrary to good conscience and global best practice to conclude that NEPZA with years of experience in both regulations and management of more than 40 zones relinquish such function to OGEFZA who has remained in the management of just one zone since inception.
“It will be necessary for the Technical WG to provide evidence where the World Bank Group stated that OGEFZA should be transformed into sole FTZ Authority with NEPZA becoming assets holding co.
The Federal Government already has an entity, Ministry of Finance Incorporated, through which it makes investment and represents its interest in any PPP arrangement”, the stakeholders affirmed.
In its conclusions, the stakeholders further noted as follows:
“Research conducted by the TWG on international best practices taking samples from about ten countries of the world shows that the only acceptable regulatory model is one single regulatory agency for free zone operations per country. The advice of the World Bank Group also reiterates the importance of the government staying off zone development/management and concentrating mainly on regulatory functions. These positions corroborate NEPZA’s standpoint over the years on the need to have a single regulatory Authority for Nigeria free zones scheme regardless of the sectors.
“Therefore, the recommendation of TWG that OGEFZA should be the sole regulator of free zones in Nigeria and NEPZA to function as free zone assets management company is confusing, contradictory, misleading and in no way problem solving. It is a well-known fact that the biggest aspiration of OGEFZA from all its antecedent is to take over NEPZA statutory mandates in deviance to the national interests and objectives for the establishment of Free Zones scheme in Nigeria as well as the various advice from both local and international advisory bodies including the international Finance Corporation (IFC) who is the major financier of investment in Nigeria free zones.
“In the same vein, the recommendation that OGEFZA should become the sole regulator of free zones in Nigeria despite the fact that it has since its establishment remained a one-zone regulatory agency until recently when two additional zones were unlawfully added to it exposes the real intention of the FMITI in the conduct of the exercise. To have chosen an agency who is lacking in competence, experience and capacity is ridiculous. It must be noted OGEFZA is a public-private partnership arrangement where INTELS Ltd commands a large percentage of shareholding.
“Meanwhile, NEPZA is solely owned and funded by the Federal Government of Nigeria. The TWG deliberately and mischievously misrepresented NEPZA like a one-zone authority in order to arrive at its premeditated findings and recommendations. In the course of its exercise TWG restricted its visit and data collation to only Calabar Free Trade Zone under NEPZA whereas NEPZA is a multi-sectoral zone authority unlike OGEFZA which is a single sector regulator that’s focused on service and logistics in the oil and gas sector.
“Since inception, NEPZA has remained a regulator of multiple zones and sectors. There is no other way to explain the reason for the exclusion of the numerous zones under NEPZA in the purported evaluation exercise whether in the course of engagement/interaction, data collation or physical inspection of the zones.
“Where our country is currently facing the Corona Virus pandemic like the rest of the world and feeing the negative economic impact, Government’s aim is to merge parastatals for fast and uniform economic development, increasing and duplicating parastatals is a waste of time, money and investments. There is nowhere In the world where two parastatals managing one scheme, the free zone have only one licensing agency, Nigeria should not be an exception” , the stakeholders noted.
