Nigeria targets $15-bn investment in free trade zones

The oil-rich African nation Nigeria targets an investment of around 2.4 trillion Nigerian naira ($15 billion) in its free trade zones (FTZ) during the next five years, The Nigeria Export Processing Zones Authority (NEPZA) said yesterday.

In a news briefing in the country's capital Abuja, NEPZA's managing director Olugbenga Kuye said that the agency has attracted investments worth approximately $9.4 billion and was putting mechanisms in place to increase the volume of investment further.

''I believe we should be looking at investment in the sector to the tune of $15 billion in the next five years,'' he said.

Kyue expressed the determination to use free zones as a veritable tool for economic development in the country, further stating that his dream is to transform the agency's role from regulatory to and industrial entity.

Nigeria has 25 free trade zones of which nine are fully operational, six are under construction, four in design stages and six zones are largely owned by the states.

NEPZA is focusing on four key sectors as part of the country's planned industrialisation, which include agriculture, solid minerals, manufacturing, petroleum and petroleum products, and also other sectors such as housing sector.

The agency is holding discussions with Dutch investors to set up agricultural parks in the country.

''All over the world, free zones are being used as veritable tools for economic development. Along those lines, we will need to revive the moribund free zones in the country. Simultaneously we are also carrying out audit of the free zones to identify their viability. And those that are not working will be closed down.'' Kuye said.

Currently, NEPZA is working on seven free zone applications that are awaiting approval.

The agency expects that by the time the various reforms aimed at putting the free zones on the path of good business is concluded, all the enterprises that had left the various zones would have come back.

According to the United Nations Commission on Trade and Development's World Investment Report 2012, Nigeria is Africa's biggest destination for foreign investment in 2011 with total inflows of $8.9 billion.

Nigeria is Africa's third-largest economy after South Africa and Egypt with the size of about $276 billion and a population of over $170 million. Its exports, primarily constituting petroleum products, are valued at around $97 billion while imports are around $71 billion, according to CIA data.

The country's economy has been growing at an average annual rate of  around 7 per cent in the past decade, on the back of government's liberalisation programme reducing subsidies, increasing investments in key infrastructural areas and opening up of the power sector for privatisation.

However, high unemployment level of around 24 per cent remains a major concern for the country's policy makers.

Earlier this week, the Indian high commissioner to Nigeria Mahesh Sachdev said that India has bought more crude oil from Nigeria than the US in the past three months. Bilateral trade between the two countries has hit a $10-billion mark in the last quarter, according to latest data.

Indian investment in Nigeria is over $16 billion.

Sachdev said that India will continue to cooperate with Nigeria to improve the nation's economy and the plan includes establishment of a film city in Kano state, improvements in healthcare and agriculture and providing vocational training to youth for self employment.