Adedapo Adesanya
By Adedapo Adesanya
The Nigeria Export Processing Zones Authority (NEPZA) has opposed some sections of the proposed Customs Service reform bill, citing three reasons why an amendment to give the Nigeria Customs Service (NCS) powers to make regulations in free zones will weaken and subvert the nation’s Special Economic Zones.
In a submission to the ongoing public hearing on the Custom Reform Bill at the House of Representatives, the agency said, “Free Zones are areas designated as such by the President to serve as one-stop-shop investment hub wherein incentives are provided in form of tax holidays, simplified Customs and Immigration processes, amongst others, with a view to attracting investors.
“The One-Stop-Shop concept, in furtherance of which Regulations were made for all the active Free Zones with the involvement of the Nigeria Customs Service and all relevant stakeholders, would be eroded if the provisions of the bill are allowed.”
It argued that “by providing regulations for the free zones, the Nigeria Customs Service would be setting a dangerous precedent, as other agencies would want to do same.”
The Authority in its response also held that the development, if not nipped in the bud, would result in either multiple regulations that might be contradictory, thereby creating avoidable legal tussles or making registration of enterprises unnecessarily cumbersome and unattractive.
It further submitted that: “the proposed sections of the bill which seek to make the Free Zones Customs- Controlled Zones invariably seek to create antithetical Free Zones Customs Territory alien to the global free trade zone model used around the world.”
While listing specific areas of the Bill it finds objectionable, NEPZA stated that it had through the operations of the free zones contributed tremendously to the national economy, noting that the Lekki Free Zone Quadrant that comprised Lekki Free Trade Zone, Lagos Free Zone, Dangote Free Zone Enterprises and the Alaro City Free Zone, as well as the Calabar Free Zone, and the Kano Free Zone were alluring testaments of how it continued to fast track the country’s industrialisation.
“Dangote Free Zone, a national asset is a zone with enormous prospects for the Nigerian economy. With the heightened insecurity in Nigeria amidst the COVID-19 pandemic, the introduction of a new bureaucratic bottleneck such as this proposed legal framework would only scare away investors and retard the free trade zone scheme.
“Bureaucratic bottlenecks have been identified as one of the reasons for Nigeria’s low ranking on the World Trade Organisation’s index of Ease of Doing Business.
“The free zone scheme, therefore, seeks to tackle the problem of corporate investments characterized by bureaucratic challenges, multiple taxation, conflicting regulations,” the agency said.
NEPZA also used the opportunity to allay the fears of the NCS about revenue leakages, adding that it had put in place proper customs procedures and regulations to guide investors operating in the zones in order to avoid or prevent bureaucratic bottlenecks while ensuring that all applicable laws, regulations and guidelines were duly observed.
These safeguards, NEPZA noted, could be ascertained in its enabling Act, as well as the regulations of the respective free zones.
It, therefore, urged the National Assembly to be circumspect by avoiding the temptation of allowing any legal framework that would cripple NEPZA and the free zone scheme.
