Federal Govt has ‘restored sanity’ in Nigeria’s Free Zones – Expert

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The Federal Government has been commended for “finally restoring sanity” in Nigeria’s Free Zones sector.

Edward Alibo, a stakeholder in the nation’s Free Zones, in a statement forwarded to PREMIUM TIMES, Friday, said the “permanent removal” of the rivalry between the Nigeria Export Processing Zones Authority (NEPZA) and the Oil and Gas Free Zones Authority (OGFZA) has shored up investors’ confidence and would help boost the nation’s economy.

Mr Alibo commended the Minister of Industry, Trade and Investments, Niyi Adebayo, for implementing the legal advice of the Attorney-General of the Federation, Abubakar Malami, regarding which of the two agencies has oversight responsibility for oil and gas Free Zones in Nigeria.

Mr Alibo, however, said, the federal government “should direct a proper technical assessment to ascertain the benefit or otherwise of the nation’s investment in free zones as recommended by the Orasanya led Committee and adopted by the Federal Executive Council through her White Paper gazetted in March 2014”.

Read Mr Alibo’s full statement below:

How Sanity Is Returning To Free Zones Sector In Nigeria — Edward Alibo

Stakeholders of the Free Zones in Nigeria have commended the Minister of Industry, Trade and Investments, Niyi Adebayo, for finally restoring sanity in the Free Zones Sector in Nigeria by implementing the legal advice of the Attorney-General of the Federation and Minister of Justice (HAGF), Abubakar Malami, SAN.

The justice minister gave his interpretation of the provisions of the Nigeria Export Processing Zones Act Cap No 107, LFN 2004 and the Oil and Gas Export Free Zone Act Cap 05 LFN 2010 as to which government agency has oversight responsibility over oil and gas Free Zones in Nigeria in September 2019.

In that legal interpretation, Mr. Malami recalled that the attorney-general’s office “had written earlier in 2008 vide letter Ref. No. HAGF/FMC&I/2008/Vol.1/01 dated 25 March, 2008 on this subject matter, wherein the then attorney-general resolved in favour of OGEFZA that the role of Oil and Gas Exports and administration of the Oil and Gas Export Free Zones was exclusively on OGEFZA on the strength of Section 5(2) of the OGEFZ Act.”

He further said: “On this note, it is our final opinion that the Oil and Gas Free Zones Authority and not NEPZA has the sole power over the Oil and Gas Export Free Zones, and should therefore enforce the law, since the onus of ensuring that this Act is implemented to the letter has been imbued on the OGEFZ Authority in line with Section 5, and 25 of the Act and many others. This is the position of the Law.”

It is therefore very worrisome that rather than applauding the laudable efforts of the Federal Ministry of Industry, Trade and Investment that has permanently resolved the inter-agency friction between two agencies under its supervision, a few past officials of the old Federal Ministry of Commerce and Nigeria Export Processing Zones Authority (NEPZA) are now up in arms to blackmail and antagonize the minister and the Federal Ministry of Industry, Trade and Investment with campaigns of calumny against a subsisting law being implemented on the express advice and legal interpretation of the chief law officer of the Federation.

These persons parade themselves as Free Zone stakeholders not minding the immoral, irregular and questionable manner by which they joined the services of the same Companies that they had facilitated their Free Zone approvals while in Government.

For instance, investigations revealed that one of them was high up at the Ministry of Commerce in 2005 when the agency facilitated the licensing of Snake Island as a Free Zone. He ignobly applied his privileged position in Government at that time, to personally corner juicy stakes in a contraption that is now a major stakeholder in the zone.

This company was contrived as a monopolistic private business venture that not only manages the facilities in the Free Zone, but also carries out regulatory functions that are statutorily reserved for Government Regulatory bodies.

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The individual has since positioned himself at the zone to now act as the antagonist-in-chief against the Federal Government in its implementation of the directive of the Attorney-General of the Federation and Minister of Justice for the past 12 years, just so he can protect the personal stakes he immorally and shamelessly cornered for himself through the instrumentality of the position he held in government.

In a similar case another former official of the Nigeria Export Processing Zones Authority now consults for Free Zone entities he helped licensed while in office.

These persons with doubtful loyalty to the nation, committed even worse kinds of sabotage against the Federal Government of Nigeria when they went as far as misusing their official positions in government at the time, to set up structures that weakened NEPZA as a bonafide government regulator and almost brought the Agency to its knees.

The structures were set up through certain irregular provisions they caused to be inserted into the NEPZA’s Regulatory guidelines for the operations of Private Free Zones. Through these toxic provisions, they practically transferred some of the most important regulatory powers of NEPZA to the privately-owned Free Zone Management Companies, solely to serve their private interests.

Predictably, they have since retired to those so called Free Zone Management companies in which they have taken up positions that practically makes them “senior partners” to NEPZA in the mandate of regulating the operations of Private Free Zones under the Agency.

One is therefore not surprised that some of the companies which these former Ministry and NEPZA officials structured to syphon large portions of revenues for themselves, are taking up to 70 per cent of the revenue which should go to government, while leaving only 30 per cent to NEPZA. This is the brazen fraud and unholy arrangement that these so-called “stakeholders” have been fighting over these past 12 years to protect and shield from probe and possible indictment.

Meanwhile, the “arrangement” they set up has completely incapacitated NEPZA to the point that the Regulator can hardly sanction any erring Private Free Zone Operator, because these super Free Zone Management Companies, who most often than not, act like untamable shylocks, are the ones running the show by themselves in those Free Zones. The cases of LADOL vs Samsung and LADOL vs Africoat readily come to mind.

Today, NEPZA is at the mercy of these “former this and former that” and government must now call these men to order and set up the necessary machinery to thoroughly investigate the shoddy activities in the Free Zones they claim to be managing, so as to restore regulatory discipline and proper order in the sector.

Secondly, government should direct for a proper technical assessment to ascertain the benefit or otherwise of the nation’s investment in free zones as recommended by the Orasanya led Committee and adopted by the Federal Executive Council through her White Paper gazetted in March 2014.

The pertinent question to ask is, whose interest have these stakeholders been fighting for over the last couple of years? This question is quite pertinent because as far as all law-abiding stakeholders of the Free Zones Sector are concerned, the process of bringing any Free Zone under the regulatory control of another regulator as directed by the Federal Ministry of Industry, Trade and Investment based on the legal interpretation given by the attorney-general of the federation and minister of justice is at no cost to the management companies or the Free Zones. So what are they actually fighting to protect?

As Free Zone stakeholders, we are very certain that the revelations that will come out of a proper investigation of the activities of these men in the Zones they claim to be administering on behalf of government will be earth-shaking and damning.

Meanwhile, in their numerous lies infested write-ups, these men even attempted to cause some distraction by speculating about the Orosanye Report, just so they could wow their less informed audiences and satisfy their personal fantasies to further expand their illicit control over government revenue sources. Hence they have been assuring their less informed watchers that OGFZA will be merged with NEPZA.

They mischievously do this without mentioning that government rejected the recommendation of the Orasanya’s Committee on that subject, and have since gazetted a White Paper to that effect.

It is very obvious to every discerning Nigerian that the objective behind the ignoble call for merging the two agencies, has very little bearing to the intentions of government in carrying out that exercise. Why should government act that retrogressively to merge agencies that should rather be empowered separately, to ensure better vision actualization through the policy of specificity which encourages efficiency, especially in investment promotion and attracting authorities?

When the UAE has up to six different regulatory bodies for their Special Economic Zones, and China has over 20 such regulatory organs both at their national and provincial government levels, why should these detractors continue to tell blatant lies to the unsuspecting public about the need to merge agencies, without telling them that the most successful Special Economic Zones are found in countries like UAE, China, Ireland, Turkey etc that operate multiple Free Zone regulatory frameworks? Why are they always giving instances of countries like Senegal, Kenya, Burkina Faso etc, as models? Are these really the ideal countries that Nigeria should model her economic development strategies after?

Meanwhile, the matter that was interpreted by the attorney-general and minister of justice is about the implementation of the provisions of a subsisting Act, which has nothing to do with the issue of the restructuring and rationalization of federal government parastatals, commissions and agencies which the Government already rejected and discarded.





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