Lekki Free Trade Zone (LFTZ)

LEKKI FREE TRADE ZONE (LFTZ)

Free trade zones are created to attract foreign investment and promote foreign trade. They are notified areas where special laws operate with regard to ownership, taxation, recruitment of labor, value addition and income repatriation. As globalization gains ground, free zones has become the preferred areas for foreign investment as they offer the most cost effective mix of factors of production, transportation and distribution in addition to other benefits.

A free trade zone (FTZ) or export processing zone (EPZ) is an area of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. It is a region where a group of countries has agreed to reduce or eliminate trade barriers.

It can also be defined as labor-intensive manufacturing centers that involve the import of raw materials or components and the export of factory products.

The first ever free trade zone was established in Shannon, Ireland- a rural area in Ireland. It was the idea of the Irish government to promote employment within this rural area, making use of a small regional airport and generate revenue for the Irish economy. It was a huge success and it’s still in operation today.

Though free trade zones have often received domestic criticism for encouraging businesses to set up operations under the influence of other governments, and for giving foreign corporations more economic liberty than is given to indigenous employers who face large and sometimes insurmountable “regulatory” hurdles in developing nations, many countries like Nigeria are increasingly allowing local entrepreneurs to locate themselves inside FTZs in order to access export-based incentives.

Just as the Dubai free trade zone that as now become a place for business enterprise who want to not only make profit but register their prowess in the international setting, the Lekki Free Trade Zone (LFTZ), an addition to the already existing five (5) FTZ in Nigeria was conceptualized and been processed to bring it into existence eight years ago by the former governor of Lagos state, Asiwaju Bola Ahmed Tinubu. And the project has been kept on track by the current governor of Lagos state, Babatunde Raji Fashola (SAN).

The Lekki Free Trade Zone (LFTZ) is located at lekki peninsula, southeast part of Lagos state, facing the Atlantic in the south, backing lekki lagoon in the north and bordering with 5kilometres of golden ocean line, 50kilometres stretching to Lagos downtown centers, 70kilometres to the Lagos International Airport, while 10kilometres to the proposed new international airport, and 50kilometres to Apapa port, the largest west African port and 55kilometres to Lagos railway station, while the proposed new lekki port will be standing in the zone. And every state in Nigeria close to neighboring countries can be linked to each other through the highway and railway.

According to Mrs Olusola Oworu- the former Special Adviser to Governor Fashola, “the concept of the zone was envisioned to create an industrial park for manufacturing, oil and gas, real estate and leisure within the area for the singular purpose of improving the lot of Lagosians by creating employment, increasing and improving commercial activities in Lagos”. She went further to say that, “the administrative complex has been fashioned to house the Nigerian Customs Service, the Nigeria Immigration Service and the Nigerian Police, being the essential service providers within any free trade zone”. She added that, necessary information and communication technology equipment have also been provided to enable the officers of these services carry out their functions effortlessly and effectively in a manner befitting the 21st century. Also to be included in the zone is a gas-powered Independent Power Project (IPP), sewage treatment plants, refineries and so many other facilities.

The Zone which was initiated by former governor of Lagos state, Asiwaju Bola Ahmed Tinubu in 2003 with a land area of 1000hectares was later increased to 3000hectares on registration with the Nigeria Export Processing Zone Authority (NEPZA). Realizing the relative advantage of a free zone in Lagos above other parts of the nation, the vision was expanded to building a model city devoid of stress and accompanying social vices, and the land was increased to 16500hectares.

It is analysts believe that there is hope for the Nigerian economy as the Lekki Free Trade Zone (LFTZ) stays on track. The zone is going to serve as a magnet for international investment, attracting pioneering minds and partners. And also encouraging economic growth, sustainable development and create a brighter future for Nigerians.

With over 70 local and foreign companies signing a memorandum of understanding and making financial commitments, signifying interest in the zone, 53 companies registering in the free zone investment agreements while 12 companies have executed investment agreements that have ensured that over 800 Nigerians and 70 Chinese nationals have been employed within the zone, especially in construction.

Truly, for the federal government to achieve its vision 20:20, such project as this, building of infrastructural facilities and most importantly creating an enabling environment should be the governments focus for investment.

Pertinent to note is that the Federal Government (FG) and the Nigerian Export Processing Zone Authority (NEPZA) included the Lekki Free Trade Zone regulation in the 2010 Gazette, which spells out the rules and regulations applicable in the zone, as well as the incentives available.