Buhari committed to making Nigeria’s Free Zones world-class
The President has given us the authorisation to licence seven new pilot industrial parks in each of the country’s geo-political zones.
Terhemba Nongo, an engineer and the General Manager (Business Development), is overseeing Nigeria Export Processing Zones Authority (NEPZA), being the most senior GM. The Alumnus of the University of Nigeria, Nsukka, has 35 years of post-graduate experience in the design, construction and maintenance of engineering infrastructure. He also has over 20 years’ experience in the design, construction and management of Free Zones (FZs).
In this interview with Financial Nigeria magazine, Nongo, who had earlier acted as MD/CEO from 30th August, 2012 to 28th January, 2013, speaks on latest developments at NEPZA, including on-going infrastructural works in the Zones and the licencing of seven new industrial parks -- at least one in each of the six geo-political zones -- as well as the NSEZCO controversy.
There is much quiet in NEPZA now. Nothing seems to be happening. Is it because there is no managing director for now?
I am happy you said “nothing seems to be happening” – not that nothing is happening. First: we don’t make a lot of noise here. Nevertheless, a lot is going on. At NEPZA, we do the work; and allow the work to speak for us.
Second, as you may know, NEPZA is the prime regulatory/supervisory agency for Free Trade Zones and Industrial Parks/Cities in Nigeria. This means the action is outside the head office; the real action is in the Zones, where the Zones have been receiving (and continue to receive) a new lease of life.
Third, which is as per the Authority not having a Managing Director, I don’t think it is a challenge for NEPZA as a government institution. Government is a continuous thing – you can never have a break. This is because there are processes, infrastructures, frameworks and systems. These are the things that make an institution or institutions.
So, there are institutional infrastructures or systems on ground that guarantee that work goes on – whether or not a substantive Managing Director is in office. For instance, the Managing Director doesn’t work alone. His management team comprises the Directors or the General Managers. And so even when there is a substantive Managing Director in place, when he is out of the country or on leave, the most senior General Manager stands in for him in a temporary capacity. And this is what is happening right now. I happen to be the most senior General Manager; and I am holding forth. And, by the special grace of God, we are doing our best.
So, what really is going on in the Zones?
NEPZA has seen much development in the course of its existence. But it could have been better. But since President Muhammadu Buhari came into office, things have been looking up. Before now, the most the Authority got in terms of budgetary receipts was N2 billion. But under the incumbent President, for the first time in the history of NEPZA, the Authority received an unprecedented capital injection of N50 billion in 2017 – although only N20.5 billion was released. The same figure was allocated to us in 2018. And from the budget estimates, we are expecting the same in 2019.
Consequently, there has been a corresponding spike in the activities in the Public Zones in Calabar and Kano, especially in terms of infrastructural development or renewal, i.e. water, power, roads, etc. By the time we are through, these public Zones would have world-class amenities or infrastructure. Investors operating there, too, would heave a sigh of relief. And more world-class investors would be attracted to the Zones.
And talking about the capital votes for NEPZA, there is the controversy over the issue of NSEZCO i.e. Nigeria SEZ Investment Company. The Senate….
(Interrupts): We can discuss this at another time when things would have been clearer; but not now.
But the stories are out there you and the former MD, Hon. Emmanuel Jime, are opposed to Project MINE, and that both of you are trying to frustrate its take-off by misinforming the public about NSEZCO….
Like I said, I don’t want to comment on NSEZCO or any false allegations against me for now. I will leave that for another day.
NEPZA has licenced new Free Trade Zones or Industrial Parks. How many Zones do we have now?
Until lately, NEPZA had 34 Free Trade Zones (FTZs). But in the last two years, we have licenced more FTZs. We now have 42 Free Zones, including: Nasco Town Free Zone, Lagos, with expected capital investment of $2.1 million; Quits Aviation Services, Ikeja, valued at $215 million; and there is: Tomaro Industrial Park, valued at $450 million. All are in Lagos, and all of them target employment in the thousands. Together, these FTZs are bringing $2.8 billion into the economy in terms of Foreign Direct Investment (FDI). Nasco alone hopes to generate over 15,000 direct jobs. And you have the Dangote Free Trade Zone, valued at about $12 billion. It also promises to generate thousands of jobs.
So, we are looking at 42 Free Trade Zones/Industrial Parks. But beyond this, the President has given us the authorisation to licence seven new pilot industrial parks in each of the country’s geo-political zones. These new Special Economic Zones (SEZs) or Industrial Parks would unleash a wave of job opportunities for our teeming youths. And let me add here that the three models of investment in the FTZs are: Private, Public and Public Private Partnership.
Where precisely will the seven new, pilot Industrial Parks be located?
Like I said, President Muhammadu Buhari has authorized the setting up of seven new SEZs in the six geo-political zones in the country. These are: the Lekki Garment & Textiles Park as well as the Special Economic Zones (SEZs) in Makurdi, Benue State; Benin, Edo State; Ilorin, Kwara State; Sokoto; Gombe State; and Abakiliki, the Ebonyi State capital.
With the coming on stream of these new SEZs country-wide, what is bound to follow is large-scale infrastructural development in terms of power, water, roads, hotel chains, real estate, etc. We can, thus, say that the Buhari administration has set the ground for the massive infrastructural transformation of the country.
There are many dormant Free Zones across the country, so why is NEPZA still licencing new ones?
First, it is not the investors with the Zones under construction that are getting licences for new ones. Two, these are private investments, and NEPZA cannot stop an investor from applying for a licence to operate a Zone or Industrial park!
But most importantly, the Free Trade Zones are not dormant per se – many of them are just at different stages of development or construction. But things will be better, now that the country is out of recession.
So, out of the 42 FTZs or parks, how many of them are operational?
I will say 14 are at the moment operational. The rest are still under construction, but the picture is looking good.
What are some of your best success stories so far?
A frontline agency like NEPZA has many success stories. We have been around since 1992. There is the Nigeria International Commerce City (NICC), popularly known as Eko-Atlantic City in Lagos. It is valued at over $38 billion and is targeting over a million jobs. The NICC is not your regular Free Zone in the sense that it is not into the export of products or goods into the international markets or into the Customs territory. It is rather a City Trade Zone, modelled after Dubai in the United Arab Emirates (UAE). It is a city in a city with a whole lot: office and residential complexes, schools, malls, amusement parks as well as entertainment and commercial hubs and the like. And, as I said, it is projected to generate over one million jobs when fully functional.
We have the award-winning LADOL i.e. Lagos Deep Sea Logistic Base, worth about $3.5 billion, and targets over 50,000 jobs. That Zone has won many awards, including Africa Infrastructure Award in 2017 by Seatrade Maritime Awards. Earlier, in December 2015, LADOL also won an award for ‘Outstanding Free Zone Integrated Hub Capacity Building Firm for Deep Water Oil & Gas Exploration, Manufacturing and Engineering Services’ by The Chartered Institute of Logistics and Transport. And, there is the Abuja Centenary City; its value stands at $18 billion, with employment capacity in the neighbourhood of 250,000.
It is commendable you have a deep understanding of the NEPZA, reeling out statistics on the agency off the cuff.
Thank you. I think that should be expected from me. I have been around for some time. I joined NEPZA in 1994. So, in a way, I am a pioneer staff. I have worked at the head office here. I have worked in Calabar, I have worked in Kano and I have worked under five or six managing directors. So, if I do not know about NEPZA, if I am not familiar with certain basics, it should be a thing of concern. And, by the way, in NEPZA here, everyone is a marketer; and to market a product or service, you must know something about it.
Are you satisfied with the progress NEPZA has made since inception?
I cannot say I am satisfied, but I will tell you that I am happy with our modest contributions to the national economy. NEPZA was established in 1992, following the enactment of the Nigeria Export Processing Zones Act 63, of 1992, with the mandate of promoting and facilitating local and international investments into Nigeria’s licensed Free Trade Zones/Special Economic Zones. NEPZA is being true to this mandate of midwifing Nigeria’s industrial take-off, and helping to deliver the Economic Diversification Agenda (EDA) of the Muhammadu Buhari administration.
From the Premier Free Zone, which made its debut as Export Processing Zone (EPZ), we now have 42 FTZs, some of which are at varying stages of construction. So, we are making progress. We may not be where we wanted or desired to be at this time, but we are certainly not where we started. But with the surge of presidential interest in NEPZA, especially in terms of enhanced budgetary funding, NEPZA is set to go to the next level.
But surely, outside low budgetary allocation, there must be other challenges too.
Of course, yes. I was coming to that. There is no system without challenges. In our case, the most critical is power. There are others like the dearth, or inadequacy, of infrastructure, especially transport infrastructure. The roads are bad, if not terrible. There is no rail system. The current administration is just reviving the system. The inland water ways are not really there. In the case of the Calabar Free Zone, the channel linking it with the ocean is too shallow. We hear the government is planning to dredge it. But so far, it is at the planning level. All these transport issues make transporting finished goods to the ports difficult. But as I have said, the President is tackling it headlong.
And, very important too, the NEPZA Act needs to be amended to enable NEPZA fulfil its mandate of really giving fillip to Nigeria’s industrial march.
There was a talk about a Stakeholders’ roundtable. Any update on that?
Yes, we planned a stakeholders’ roundtable. But when something involves many stakeholders and it is of such a big scale, it requires comprehensive planning. So, the issue of a stakeholders’ roundtable has not been jettisoned – it is still in the works. We need to enlighten Nigerians and investors – whether local or foreign – about the Free Zones scheme.
It is the new game-changer in terms of economic diversification, industrial leaps, etc. This is the case in the Americas, Europe, United Arab Emirates, India and China, etc. But as I have said, Nigeria will get there; and we have taken more than the proverbial first step.
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