FG’s Panel Report Stripping NEPZA Of Regulatory Role Unsettles Workers

…We Are Yet To Receive Panel’s Report- NEPZA MD

There is palpable tension at the Nigerian Export Processing Zones Authority following a recommendation by a government panel to strip the agency of its regulatory powers in Free Trade Zones in the country.

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The move, according to a document obtained by THE WHISTLER, formed part of recommendations by a Technical Working Group on Performance Evaluation of FTZ Licensees, set up by the Federal Ministry of Industry, Trade and Investment.

The group which submitted its report in March 2021, gave a damning verdict on the performance of NEPZA in overseeing FTZs, especially in the area of productive activities, export, job creation and foreign direct investment targets.

The report stated that “Licensees operating under NEPZA performed significantly below expectations against National Aspirations especially in terms of exports, job creation and level of activity.

” Furthermore, against their own targets, they recorded poor performances in all key financial and nonfinancial metrics.

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“A key point to note is the high number of moribund zones, as 60 per cent of total licensees are inactive. This is prevalent amongst publicly owned/sponsored licenses and FTZs licensed for manufacturing.”

While the document also scored low the performance of another related agency, the Oil and Gas Free Trade Zone Authority, the panel however, said it turned out positive figures in terms of active licensees and revenue generation for the government when compared to NEPZA.
“The performance against their targets was a mixed bag. Performance in non-financial metrics was poor with employment metrics and occupancy rates being below expectation while they were able to exceed expectations in key financial metrics such as Foreign Direct Investment and local investments.

” The positive performance could be partly due to the nature of its oil & gas enterprises with highly developed, sophisticated and well-funded operators,” it said.

While stating that the use of FTZs in accelerating industrialisation has been successful in other parts of the world, the document said Nigeria, under NEPZA, is yet to take advantage of the dynamic potential of trade zones as an instrument of economic growth and diversification.

For instance, the document stated that only 12 out of the 33 licensed FTZs are currently operational.
The document recommended that NEPZA should be reformed to play the role of an operator.

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It stated, “Going forward NEPZA should function as an operator while OGFZA as regulator in the Free Zones Framework for the Regulation, Operation and Management of FTZs in Nigeria.

” NEPZA should be transformed into the Asset Co responsible for representing the FG’s interests in the FTZs and acting as owners of the FG’s Free Zone assets.

” NEPZA currently owns assets and has experience in developing enterprises within FTZs, thereby, more suited to executing this function.

” OGFZA should become the only FTZ authority responsible for regulating and licensing all FTZs. This is mainly due to their experience in effectively regulating and supervising the licensees under their supervision.

” In addition, they have been ranked by PEBEC as the most government agency with the highest level of efficiency and compliance which further enhances their credibility to function as regulators,” the document said.

It also recommended that the licences of 13 moribund free trade zones should be revoked.

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The affected trade zones include Banki Border Free Zone, Borno State, Brass LNG Free Zone, Bayelsa State, Ibom Industrial Free Zone, Akwa Ibom State, Ibom Science & Tech. FZ, Akwa Ibom State, Imo Guangdong, Imo State, Koko Free Trade, Delta State and Kwara Free Zone, Kwara State.

Others are Maigatari Border Free Zone, Jigawa State, Maritime Economic City, Lagos State, Olokola Free Trade Zone, Ondo and Ogun States Govts, Oluyole Free Zone, Oyo State, Specialized Railway Industrial, Ogun State and Tinapa Free Zone & Resort, Cross River State.

The Report, according to sources within the agency has settled workers with some of them threatening industrial disharmony.
But reacting to the development, the Managing Director of NEPZA, Prof. Adesoji Adesugba, appealed to agitated staff of the agency to remain calm over the committee’s report.

Adesugba said, “It is important for us to realise that NEPZA is a creation of Act 63 of 1992 of the National Assembly. The reformation of NEPZA is definitely not within the competence of NEPZA’s management.”

The Managing Director further explained that the Authority was aware that there had been discussions on the re-modeling of government agencies for efficiency from the time of Steve Oronsaye’s Panel recommendations.

He added, “These discussions as far as we are aware are still ongoing and no decisions have been made nor the enabling laws to effects such changes enacted.

“With respect to the said report of the committee from the Ministry of Industry, Trade and Investment, such report has not been officially communicated to NEPZA and at the right moment, the position of NEPZA will be conveyed by its board to the appropriate authorities.”

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