Manufacturers Demand Action As FTZ Abuses Threaten Local Industry

The Basic Metals, Iron and Steel Manufacturers Sectoral Group of the Manufacturers Association of Nigeria (MAN) has called on the Federal Government to urgently intervene in the operations of some Free Trade Zones (FTZs), warning that persistent abuses are eroding government revenue, undermining local industries and putting thousands of jobs at risk.

The group specifically advocated the establishment of a Special Task Force to investigate alleged sharp practices within FTZs and recover revenues lost to years of weak oversight and regulatory infractions.

Speaking with journalists in Abuja, Chairman of the Sectoral Group, Prince Lekan Adewoye, lamented what he described as systemic loopholes in the administration of FTZs, particularly in relation to value addition requirements, export controls into the Customs territory and transactions with related entities.

According to him, the Federal Government is losing significant revenue due to the under-invoicing of finished and semi-finished products imported into FTZs under the guise of raw materials.

These products, he said, often enjoy generous incentives meant to support manufacturing and export-oriented production, but eventually find their way into the Nigerian Customs territory without any meaningful value addition.

“The abuse of the FTZ system has gone on for too long. Finished and semi-finished goods are being brought in as raw materials, under-invoiced, and then diverted into the Customs territory without processing. This deprives government of revenue and gives unfair advantage to operators who flout the rules,” Adewoye said.

He warned that such practices are placing genuine manufacturers operating within the Customs territory at a severe disadvantage, resulting in plant closures, shrinking capacity utilisation and widespread job losses.

He cited the case of a member company in Ogun State that was forced to scrap nearly 80 per cent of its installed capacity due to what he described as unfair competition from operators within the Igbesa Free Trade Zone.

“If this situation persists, many more steel manufacturers will collapse. We risk losing not just investments, but jobs and industrial capacity built over decades. Government must urgently intervene to restore sanity and fairness to the FTZ system before local industries are driven into extinction,” he cautioned.

Adewoye stressed that the Basic Metals, Iron and Steel sector remains central to Nigeria’s industrial development, describing it as the backbone of any modern economy. Despite numerous operational challenges, he said the sector has continued to support the economic diversification and industrialisation agenda of the Tinubu administration through import substitution, value addition, employment generation, MSME development and industrial integration.

He argued that allowing infractions within FTZs to persist would undermine these gains and weaken the country’s broader industrial base.

Responding to the concerns raised by manufacturers, the Executive Secretary of the Nigeria Economic Zones Association (NEZA), Toyin Elegbede, said the association does not support any form of sabotage by its member organisations.

He maintained that NEZA remains committed to ensuring that Free Trade Zones operate strictly in line with the objectives for which they were established.

Elegbede noted that regulatory agencies are already present within FTZs, including the Standards Organisation of Nigeria (SON), which he said is responsible for inspecting, certifying and issuing certificates of conformity for goods sold into the Customs territory.

He assured that the association would continue to work with relevant authorities to ensure compliance and address any identified abuses within the zones.

Further clarification from SON indicated that measures are being strengthened to improve oversight of goods moving in and out of FTZs. Director of Product Certification at SON, Engr. Enebi Onucheyo, disclosed that the agency developed the Special Economic Zones Conformity Assessment Programme (SEZCAP) in 2024.

According to him, the programme is designed to certify goods produced in or imported into Free Trade Zones before they are released into the Customs territory or exported abroad.

The scheme, he said, is aimed at enhancing the production, importation, sale and distribution of quality and safe manufactured products, while ensuring compliance with applicable standards and regulations.

Onucheyo explained that SEZCAP is currently being deployed nationwide through SON state offices with jurisdiction over the various FTZs across the country.

While welcoming the initiative, the MAN sectoral group insisted that stronger enforcement and inter-agency collaboration remain critical to curbing abuses. The group reiterated its call for a Special Task Force, arguing that only a coordinated and time-bound intervention can address entrenched practices that threaten Nigeria’s manufacturing sector.