Free economic zones in Nigeria

Nigeria is great for both first-time business owners and seasoned professionals in their industries. Nigeria's population is growing at 3% per year, making it one of the countries with the potential to become the largest economy in Africa.

The Nigerian government has offered several incentives for international investors — one of them is free economic zones in the country. They are aimed at creating a favorable investment environment and helping to accelerate economic growth, as well as the development of export-oriented production in the non-oil and other sectors.

Depending on the services offered in the free zone, an entrepreneur can decide which free trade zone in Nigeria he wants to include his business in. While some free zones are more suited to a specific industry, others are more versatile. There are 42 free zones in Nigeria to choose from.

Available business incentives

• Duty-free import of raw materials, means of production and other resources for production.
• Enterprises are allowed full repatriation of capital, profits and dividends.
• Full tax exemption from all forms of taxes, rates and fees.
• Permission to sell 100% of the goods on the domestic market.
• 100% foreign ownership of investments.
• Unified procedure for obtaining permits and operating licenses.
• Free land rental for the first 6 months of construction for government zones.
• Abandonment of all quotas for attracting foreigners for companies operating in these zones.

Permitted activities in free zones

• Construction and light industry
• Hard minerals and metals
• Oil and gas industry
• Agribusiness and agro-industrial enterprises

Permitted industries

• Electrical and electronic products
• Textiles, clothing
• Woodwork and crafts
• Leather goods
• Petroleum products
• Rubber and plastic products
• Cosmetics and other chemical products
• Metal products and equipment
• Educational materials
• Printed materials, communications and office equipment
• Medical kits, optical instruments and devices
• Confectionery and food industry enterprises
• Pharmaceutical products
• Shipbuilding and repair
• Oil and gas logistics
• Sports equipment

To manage the Specialized Zones in Nigeria, the government has formed two oversight bodies:

1. Nigeria Economic Zone Authority (NEPZA) for all general export free zones.
2. The management of OGEFZ is dedicated to the Oil and Gas Free Trade Zone (OGFZA).

The most popular free zones in Nigeria

Calabar Free Trade Zone

The Calabar Free Trade Zone (CFTZ) is located near the Port of Calabar in Cross River State, Nigeria and covers an area of 152 hectares. The Calabar Export Processing Zone was officially redesignated as the Calabar Free Trade Zone in 2001. This name update was done to make it more clear that this zone not only allows investors to produce goods and services for export, but also allows them to carry out other business related activities such as assembly, distribution, packaging, warehousing, etc. d.

Currently, more than 70 companies are registered in the zone, of which about 28 are active. These companies are in various industries such as:

• Textile production
• Food processing
• Rolled steel
• Computer assembly
• Pharmaceutics

The Calabar Free Trade Zone mainly serves companies that are involved in the production and trading of goods, or companies that are involved in oil and gas related activities. Various industries in which a company can organize its business:

• Electrical and electronic products
• Wood products and handicrafts
• Leather goods
• Petroleum products
• Textiles, clothing
• Rubber and plastic products
• Cosmetics and other chemical products
• Print materials
• Communications and office equipment
• Medical kits
• Educational materials and sports equipment
• Optical instruments
• Confectionery and food industry
• Pharmaceutics
• Metal products and machines

Kano Free Trade Zone

Kano Free Trade Zone — the second free trade zone in Nigeria which is owned by the Federal Government and is located in the Panisau Road area of Ungogo Local Government Area. The sponsor/developer of the Kano Free Trade Zone is the Federal Government and although it was declared an Export Processing Zone (EPZ) in 1998, it was later upgraded to a Free Trade Zone in 2001 with the assent of the President. Specialization — warehousing, production and logistics services.

This zone occupies approximately 262 hectares of land, is fully operational and provides a very competitive environment for all enterprises established here. In total, 33 companies are registered in the free zone, of which 13 have already started their activities. The region also has 19 large warehouses, which are used by the above-mentioned 13 companies, located in the free zone and fully functional.

There are many reasons for an entrepreneur to choose Kano Free Trade Zone over other free zones in Nigeria, for example:

• Kano State is close to many other West African countries such as Chad, Niger, Mali, etc., which can serve as export markets for companies.
• Kano — Nigeria's largest consumer market with a population of over 13 million.
• There are rich natural resources nearby such as sesame seeds, peanuts, garlic, tomatoes, peppers, ginger, etc.
• The Kano Free Trade Zone is part of the African Growth and Opportunity Act (AGOA) approved by the US Congress. The main purpose of this law is to improve economic relations between the two countries.
• Availability of skilled and unskilled labor at competitive prices.

Free Logistics Zone Ladol

Free zone Ladol — it is short for Lagos Deep Offshore Logistic Base and is located on an island in the port of Apapa, Lagos, Nigeria. Although it is considered a free zone, it is a private logistics and engineering facility designed to provide support services such as logistics and supply chain to companies engaged in offshore oil and gas exploration and production near West Africa.

Lagos Deep Sea Logistics Base

The Ladol Free Zone is one of the largest ports in Nigeria and was built to help companies involved in offshore logistics. The free zone is built on an unused swamp site and is fully integrated with all the facilities a logistics company might need. It consists of a 200-meter berth with a draft of 8.5 meters and a bearing area of 25 tons/m2. There are also 30-tonne markers on both sides of the harbor, which can be used to accommodate up to six supply vessels and three heavy cargo ships. The base provides logistics-related services such as equipment loading, inventory management, warehouse space and much more.

Since the start of operations in 2006, it has become the most extensive repair base for drilling rigs and ships in the region. Ladol acts as a one-stop shop for various oil and gas companies operating in the region. Strategically located at the entrance to Lagos Harbour, it allows operators and contractors to maximize their efficiency and assist in the simple and safe transport of goods to and from West Africa.

LADOL Nigeria has recently been further expanded to include a floating production and storage offloading (FPSO) facility. FPSO — It is a kind of floating vessel that is mainly used in the oil and gas industry to store and process oil and other hydrocarbons produced from oil wells.

Guangdong Ogun Free Trade Zone

The Guangdong Ogun Free Trade Zone is a joint venture between the governments of Nigeria and China. It is located in Igbesa town in Ogun State, Nigeria. Construction work on the free zone began in 2008 and is managed by a joint venture between the Chinese conglomerate China African Investment Company (CAIC) and the Ogun State Government. This joint venture was approved by the Nigeria Export Processing Zone Authority (NEPZA) in mid-2008.

The total planned area of Ogun Guangdong is about 10,000 hectares, and the land is also leased for a period of 99 years. Since the free zone is a joint venture product, the majority stake in the management is held by the China-Africa Investment Company. CAIC, led by China's Guangdong province, owns as much as 82% of the entire free zone. The remaining share belongs to the Ogun State Government. CAIC also has 100% management control of the free zone and has a 100-year concession for all goods produced in the free zone.

The main focus of the free zone is on the manufacturing and processing industries. The region's main industries are related to furniture production, light objects and ceramics. As discussed at the China-Africa Summit forum, the free zone is trying to develop its real estate development and research and development department, and also aims to provide services such as logistics, manufacturing, trade, financial assistance, etc.

Oil and Gas Free Zone Authority (OGFZA)

All free zones owe their existence to the collaboration between the federal government, some of the country's vibrant states and some private sector operators in creating a base that would provide all the logistics support needed by anyone working in the oil and petroleum industry. gas industry. The result of this cooperation was the creation of the Oil and Gas Free Zone Authority (OGFZA for short). It is a regulatory agency established to regulate oil and gas export free zones in Nigeria.

For establishments approved by OGFZA in accordance with the OGFZA Act and operating in an approved area:

• 100% foreign ownership of investments
• Free transfer of capital, profits and dividends by foreign investors
• Free rent of land during the construction stage; after which the rent is paid
• All industrial enterprises, including foreign companies and individuals, operating in the oil and gas export free zone are provided with a full tax holiday from the federal, state and local governments
• Duty-free, tax-free import of raw materials for goods intended for re-export
• Waiver of all import and export licenses
• Abandonment of all quotas for attracting foreigners for companies operating in the zone
• 100% capital allowance

Free zones covered by OGFTZ:

1. Onne

Onne was one of the first oil and gas export free zones established in Nigeria. It is dedicated exclusively to oil and gas and has licensed more than 200 companies to operate in the area. Companies from more than 45 countries have their branches here. The zone is strategically located and is considered the most successful free zone in Africa in terms of foreign direct investment. Currently, more than 220 service companies and eight major oil companies are located in the Onne free trade zone.

2. Warri

Warri Port was designated as a free zone in May 2011 and was built as a one-stop service center for companies operating in the oil and gas sector in the Western Delta region. The port is fully active and provides reliable and efficient services to all oil and gas companies licensed in the area. Currently, the zone is expanding and its capacity is improving.

3. Brass

This free zone is located on Brass Island in Bayelsa State and is expected to position itself as the leading hub for all oil and gas production and related industrial activities in Africa. In the long term, this free zone is expected to become one of the largest petrochemical and hydrocarbon processing centers in the world. At the moment, about $3.5 billion has been invested in the Brass free oil and gas zone.

4. Eco

Help Service

Eko Support Oil and Gas Zone was created in partnership with Eko Support Services and approved as a free zone on April 17, 2014. This free zone will provide employment, both direct and indirect, to at least 1,000 Nigerian citizens. The government is also going to invest more than $124 million in the development of infrastructure in the zone.

Snake Island Integrated Free Zone (SIIFZ)

Integrated free zone of Snake Island — one of the oldest and most important free zones in all of West Africa as it allows easy entry into the oil and hydrocarbon industry.

This is the first registered and operational private free zone in Nigeria. It received its operating license on July 4, 2005. The zone covers 250 hectares and 4 km of coastline on Snake Island, which is owned by Nigerdocks ignore PLC.

This free zone has road and water connections throughout Nigeria, with quick and easy access to Lagos International Airport. Although it is located very close to the Lagos ports of Tin Can and Apapa, it also has its own port facilities. The zone is open 24 hours a day, 7 days a week, 365 days a year, and the commercial centers of Ikoyi and Victoria islands can be reached by both car and boat. Since the Federal Republic of Nigeria is known for its oil and hydrocarbon industry, it has placed more emphasis on marine and oil and gas services and operations.

The development of such free zones in Nigeria opens up enormous opportunities for foreign entrepreneurs and businessmen to participate in large-scale and profitable projects in Nigeria and West Africa, and also significantly improves the country's economy.