NEPZA export zones

No Comments » June 7th, 2004 posted by // Categories: Important Documents





Joy Onu

Monday, June 07, 2004

Mrs. Ify Umenyi, managing director/chief executive officer of Nigeria Export
Processing Zones Authority, NEPZA, spoke to Joy Onu on how she intends to revive
the Nigerian economy through the Free Trade Zones Scheme.

Newswatch: How far have you fared with the Nigeria Export Processing Zones
Authority since you assumed office as the managing director?

Umenyi: Very far. Actually, things have really changed, both in terms of
organisational orientation and output. Since I assumed duty, we have added three
zones, Lekki EPZ, Olokola FTZ which is jointly owned by Ogun State and Ondo
State and Lekki FTZ owned by Lagos State government. We have equally licensed
seven Export Processing Factories (EPFs). These are domestic economy factories
conferred with FZ incentives to enable them manufacture and export at least 75
percent of their products. There are two other Free Zones that are awaiting the
president’s approval, one by Cross River State government and the other is in
Lagos by private operators. Many state Governments have shown interest in using
the free zones scheme as the bedrock of their industrial development. We are
pleased with such development of zones at the state level, because this will
facilitate industrialisation at the grassroots. In the case of Calabar Free
Trade Zone, my leadership has instituted proper administration that is fully
accountable. Today, 21 companies fully operational, three with skeletal
operation. There are about 40 other approved companies.

Newswatch: Government’s ban on importation is expected to boost local
industries as part of developing the non-oil sector. What has been the impact of

Umenyi: Definitely, the ban as intended will boost local manufacturing of
goods, and as expected most foreigners coming into the country will prefer the
Free Trade Zone which offers a lot of advantages e.g. perfect infrastructure. We
are expecting that the ban will impact positively on the growth rate of
occupancy in the Zone. For instance, the Orange Drug Company, an Indonesian
based outfit has indicated interest in locating in Calabar Free Trade Zone
because of the ban. The authority’s concern now is on the interpretation of the
boundaries of the ban. As you may know, the zones are regarded as a country
within a country. This definition is just for administrative purposes as
companies in the zones are not affected by most physical policies applicable in
the domestic economy. In other words, it is just for the purpose of
administering the incentives and other privileges conferred on the companies in
the zones. It is sad to state here that some of our investors in Calabar Free
Trade zone have suffered undue inconveniences in the past weeks because they
have been denied sale of their goods into the domestic economy for reason that
those goods are coming from a foreign country (Nigeria Zones). The Authority is
awaiting Mr. President’s intervention to avoid sending a wrong signal of policy
inconsistency to the investing public. The ban is sure to boost manufacturing
and the zones are to provide conducive business environment for manufacturing.

Newswatch: As part of government policy on economic reformation, government
is undertaking measures that most Parastatals like yours who are business
inclined should fund themselves. What is your view of this?

Umenyi: I agree in totality with the government. This is the only way
parastatals that have the capability to earn revenue can be pushed to realise
their potentials. I have recognised that in NEPZA, but the timing is not quite
right for this particular parastatal. Although we have the ability to sustain
ourselves, that will be until we have more zones, because Calabar is the only
functional zone with only 24 percent occupancy. With that percentage it cannot
generate enough fund for self-sustenance for now.

Newswatch: Land ownership is one problem in Nigeria, has NEPZA been able to
work out a good rent system acceptable to both investors, the authority and the
local population?

Umenyi: In the case of land ownership, before approval is given for the
citing of a Zone, government has to ensure that all the issues of ownership have
been settled. An for investors, we rent to them ready built factories and where
the pre-built is not available, serviced land is leased to them and agreement
drawn. Most of these factories are export oriented and we don’t over charge
them. As a responsible corporate organization, we relate and assist the
communities in which zones are located.

Newswatch: Many people believe that the absence of social infrastructures
have contributed in destroying the main purpose of establishing the scheme.
what’s your experience like?

Umenyi: The essence of the zone is to provide enabling environment, and that
enabling environment is perfect infrastructure, i.e. a “centre of excellence” in
infrastructure. Government did quite well in Calabar Premier Zone by providing
infrastructure, but the Zone did not start operation when the infrastructures
were provided. Before the commissioning in 2001 after eight to nine years, the
infrastructure have become near obsolete and rusting. Power supply in the Zone
is better than the one in the domestic economy, because we have a stand-by

Newswatch: What are the major problems you’re facing in moving this
organisation forward?

Umenyi: Like in all systems, change is a difficult thing. So it is not
surprising that sometimes it is difficult to bring in some of my reform agenda.
The other problem we are having now is that of funding. Everybody knows what
government funding has been in the past two years. Another problem is some
misinterpretation of government policies and proper understanding of the scheme
by some agencies e.g. understanding the boundaries of the ban and tax incentives
on EPFs. Other than these few problems I will say that the Authority is doing
okay and I thank God especially for Mr. President’s support.

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