Economy
NEZA Seeks Constructive Dialogue on Impact of Tax Reforms on Nigeria’s Free Zones
By Modupe Gbadeyanka
The need for critical stakeholders to have a constructive dialogue on the impact of the tax reforms on the free zones in the country has been emphasised by the Nigeria Economic Zones Association (NEZA).
In a statement signed by the executive secretary of NEZA, Toyin Elegbede, it was pointed out that certain provisions of the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 affect Special Economic Zones (SEZs) and Free Trade Zones (FTZs), posing significant risks to Nigeria’s investment climate.
It was noted that without careful engagement and strategic interventions, these reforms risk eroding investor confidence, jeopardising over 100,000 jobs, triggering capital flight to competing African countries, and increasing costs for Nigerian consumers.
At a time when Nigeria should be consolidating its leadership under the African Continental Free Trade Area (AfCFTA), policies that weaken the free zone scheme could inadvertently shift competitive advantage to neighbouring economies.
The new tax provisions affecting SEZ and FTZ operators have created deep uncertainty among investors and for the first time, have created a situation where even companies that export 100 per cent of their products from the free zone can be subject to taxation, completely undermining the free zone scheme and making Nigeria’s free zones one of the least attractive and competitive on the continent, a part of the note made available to Business Post stated.
NEZA said investors may choose to relocate to other African countries with more favourable free zone regimes, while still benefitting from duty-free access to the Nigerian market under AfCFTA rules, depriving Nigeria of the very investments, skills transfer, and employment opportunities the zones were designed to secure.
It stressed that by taxing domestic sales from the zones, the reforms risk raising the cost of goods in the customs territory, undermining competitiveness for Nigerian businesses and places additional burdens on consumers.
“The perception that the FTZs operating with 100 per cent export orientation or complying with the 75 per cent export outside the custom territory would be exempt has been nullified by Section 57 of the Nigeria Tax Law, 2025 which stipulates that every company meeting these conditions will still be subject to taxation. It is concerning especially as FTZs have been beneficiaries of Foreign Direct Investment (FDI) and thereby including more entities irrespective of the exemptions stated in the second schedule.
“The unprecedented minimum effective tax rules that will apply to multinationals or companies generating above a certain revenue threshold within the free zones significantly harm these companies by effectively stripping them of their key tax incentives, even for those who do not sell into Nigeria.
“Although aimed at increasing tax collection, the reforms could shrink Nigeria’s overall revenue base if zones collapse or investors shift operations to more favourable environments, resulting in long-term losses that outweigh short-term gains,” it stated.
The group stated that these risks are not hypothetical; current and prospective investors are already expressing concerns and actively reassessing Nigeria’s competitiveness relative to other countries in the region.
“Contrary to the pronouncements of the Presidential Fiscal Policy and Tax Reforms Committee, the Nigeria Tax Law, 2025 made fundamental and adverse changes to the Enabling Acts of the Free Zones Regulatory Authorities (NEPZA & OGFZA). Despite repeated assurances, the Nigeria Tax Law provisions are not consistent with the Enabling Acts; instead for the first time, free zone enterprises who do not sell into Nigeria custom territory will be subject to taxation in an unparalleled and aggressive encroachment into Nigeria’s free zones.
“Again, contrary to perceptions that Free Zones deprive government of revenue, the reality is that zones already make substantial contributions to Nigeria’s economy and fiscal system. Under the supervision of the Regulatory Authorities, free zone operators pay an average of $100,000 per zone (25 fully operational zones under NEPZA and 8 under OGFZA) annually in Operating Licence (OPL) renewal fees excluding additional renewals by FZEs, and pay an additional $100,000 per zone annually in container examination charges.
“In 2024 alone, free zones contributed over N100 billion in customs duties and remitted over N2 billion in PAYE taxes on behalf of employees. They also meet numerous other obligations, including immigration fees, authority administrative fees, and levies.
“These figures do not even begin to capture the broader economic impact of Nigeria’s free zones including infrastructure investments, deepening supply chain linkages, skills development of local talent, and the creation of over 100,000 direct jobs. Beyond fiscal contributions, world-class infrastructure is the backbone of any successful free zone programme. A compelling example is Morocco’s Tanger Med Free Zone, a state-led public-private partnership (PPP)-driven complex where total investment reached about $11.2 billion by 2022 ($ 4.3 billion from public sources and $ 6.9 billion from private investors).
“In 2023, the port handled 8.61 million TEU, with its industrial zones hosting about 1,200 companies, generating 110,000 jobs and $15 billion in exports. It is now on track to exceed its nominal capacity of 9 million TEU. This is what strategic, coordinated investment combined with policy stability can deliver. Nigeria has the potential to replicate and even surpass such success, but only if the free zone framework is protected and strengthened, not undermined,” it stated.
NEZA warned that if Nigeria weakens its Free Zone scheme, investors may simply relocate to these competitor economies, produce there, and still export duty-free into Nigeria under AfCFTA. This would not only erode Nigeria’s investment attractiveness but also expose domestic manufacturers to greater external competition, the very concern MAN has raised.
The solution, therefore, is not to stifle or weaken the free zone scheme but to establish fair and transparent rules that balance the interests of manufacturers in the customs territory with the export-driven mandate of FZEs. With proper consultation and policy design, both can thrive creating a more diversified, competitive Nigerian economy.
It posited that the recent tax reforms were introduced with insufficient engagement with key zone stakeholders, limiting the depth required for a holistic, workable and balanced outcome. This lack of structured dialogue risks creating policy misalignment, where the reforms may inadvertently erode the very industrialisation, job creation, and export diversification objectives that government seeks to achieve.
NEZA reaffirmed its unwavering commitment to supporting operators across Nigeria’s SEZs and FTZs. We remain dedicated to working collaboratively with the government to ensure that the reforms achieve their goals of transparency, fairness, and revenue assurance without destabilising a scheme that has generated billions in revenue, created thousands of jobs, and helped positioned Nigeria as an investment destination.
It called on President Bola Tinubu, the Federal Inland Revenue Service, NEPZA, OGFZA, and other key stakeholders to engage in a structured and inclusive dialogue with operators.
NEZA urged the government to consider a moratorium on the implementation of the new tax provisions for FZEs. A phased approach, whether through a transition period, a temporary extension of existing incentives, or the “grandfathering” of enterprises already operating under earlier frameworks, will provide investors the certainty needed to protect jobs, honour financing commitments, and complete long-term projects. This will also give government the necessary space to conduct impact assessments and design an orderly framework that balances revenue objectives with Nigeria’s trade and economic competitiveness.
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, has wooed American investors, declaring that the country will focus on disciplined reforms and transparent markets to restore investor confidence in the country.
Mr Cardoso disclosed this after leading Nigeria’s engagement with senior business leaders and global investors at the US-Nigeria Executive Business Roundtable in Washington, convened by the US Chamber of Commerce’s US–Africa Business Center.
According to him, Nigeria used the platform to send a clear message to international capital: the country is focused on macroeconomic stability, regulatory clarity, and private sector-led growth.
“With global capital cautious and highly selective, we presented Nigeria’s message clearly and practically: disciplined reform, transparent markets, and credible institutions,” the CBN Governor said.
He noted that discussions at the roundtable centred on stabilising the macroeconomic environment and strengthening the financial system to support sustainable business expansion.
“Our discussions focused on macroeconomic stabilisation, regulatory clarity, and fostering private sector-led growth, laying the groundwork for a deeper phase of US–Nigeria commercial engagement,” Mr Cardoso stated.
Looking ahead to 2026, the CBN chief outlined an ambitious reform agenda aimed at reinforcing Nigeria’s financial architecture and improving the operating environment for businesses and investors.
“We will continue to strengthen the banking system through rigorous supervision and sound governance,” he said, adding that the apex bank would also “refine our inflation-targeting framework to deliver durable price stability.”
Mr Cardoso disclosed plans to modernise Nigeria’s payments infrastructure to boost efficiency and financial inclusion, while also promoting responsible fintech innovation anchored on consumer protection and financial integrity.
He further revealed that the CBN would deploy data and artificial intelligence-enabled tools to enhance regulatory responsiveness and execution.
“We will continue to build institutional capacity within the Bank, leveraging data and AI-enabled tools to support faster, more responsive, and higher-quality execution,” he said.
The central banker stressed that sustained reform, rather than short-term measures, remains critical to unlocking long-term growth and investment.
“Reform is a process that rewards consistency and discipline. Our focus remains steady: to protect trust, sustain stability, and entrench the foundations for disciplined, lasting economic growth in Nigeria,” he added.
He noted that the engagements signalled growing international confidence in Nigeria’s reform trajectory, positioning the country for deeper commercial ties with the United States and renewed inflows of global capital in the year ahead.
By Aduragbemi Omiyale
Nigerians have been urged to invest more locally because the country has now become a compelling investment destination, where value is being created and discovered.
This is the view of President Bola Tinubu, who expressed confidence that 2026 would deliver even stronger returns as the impact of his administration’s economic reforms continues to materialise.
He was reacting to the historic N100 trillion market capitalisation mark of the Nigerian Exchange (NGX) Limited achieved on Monday, describing the feat as a powerful signal of renewed investor confidence and economic rejuvenation.
In a statement, the President said, “With Nigerian Exchange crossing the historic N100 trillion market capitalisation mark, the country is witnessing the birth of a new economic reality and rejuvenation,” noting that the All-Share Index (ASI) closed 2025 with a 51.19 epr cent return, up from 37.65 per cent in 2024, ranking among the strongest performances globally and outperforming major indices including the S&P 500, FTSE 100, and several emerging-market peers.
“Nigeria is no longer a frontier market to be overlooked, it is now a compelling investment destination where value is being created and discovered,” he declared.
Mr Tinubu emphasised that robust stock market performance reflects broader economic health and rising investor confidence, highlighting several factors behind the market’s strong performance: impressive results across listed companies, a growing pipeline of new listings spanning energy, technology, telecommunications, and infrastructure, as well as broader macroeconomic improvements including easing inflation, a stabilising naira, rising foreign reserves, and expanding exports.
He reiterated his administration’s commitment to building an inclusive, transparent, and high-growth economy, stressing that the N100 trillion milestone sends a powerful message to the global investment community.
“Nation-building is a process, not a destination. The N100 trillion market capitalisation is a signal to the world that the Nigerian economy is robust, productive, and open for business,” Mr Tinubn affirmed.
In his remarks, the Director-General of the Securities and Exchange Commission (SEC), Mr Emomotimi Agama, credited President Tinubu’s leadership for driving the market to historic heights.
“The N100 trillion milestone is a direct result of the administration’s decisive reforms and unwavering commitment to transparency and fiscal discipline.
“These policies have renewed investor trust and solidified the credibility of Nigeria’s capital market,” Mr Agama stated, reaffirming the agency’s alignment with the President’s economic vision, pledging to strengthen oversight, protect investors, and uphold governance standards to ensure sustained growth and resilience.
On his part, the chief executive of NGX Group Plc, Mr Temi Popoola, commended President Tinubu for providing the policy clarity and reform momentum that have bolstered investor confidence.
“This milestone underscores the success of ongoing reforms and the exchange’s commitment to market depth, transparency, and inclusive growth. The capital market has responded positively to improved macroeconomic coordination and clear reform direction, creating an enabling environment for sustainable investment. It validates our focus on market development, innovation, and creating an environment where both local and global investors can deploy capital with confidence,” Mr Popoola noted.
He added that NGX Group would continue collaborating with regulators and stakeholders to attract quality listings, deepen liquidity, and expand retail participation, reinforcing our position as a catalyst for sustainable economic growth.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange appreciated for the fourth straight session on Thursday, January 8, chalking up 0.21 per cent.
This improved the market capitalisation of the bourse by N4.69 billion to N2.190 trillion from the N2.185 trillion it ended in the preceding session, and the NASD Unlisted Security Index (NSI) added 7.83 points to close at 3,660.87 points compared with Wednesday’s 3,653.04 points.
Business Post observed that there were movements around five securities during the trading day, with three pointing north and two point south.
FrieslandCampina Wamco Nigeria Plc gained N2.55 to close at N62.47 per share versus Wednesday’s price of N59.92 per share, Central Securities Clearing System (CSCS) Plc appreciated by 48 Kobo to N42.62 per unit from N42.14 per unit, and IPWA Plc improved by 10 Kobo to N1.12 per share from the N1.02 per share it ended at midweek.
On the flip side, Afriland Properties Plc lost N1.81 to end at N16.30 per unit versus the previous day’s value of N18.11 per unit, and Geo-Fluids Plc crashed by 6 Kobo to quote at N6.82 per share versus N6.88 per share.
During the session, the volume of transactions was down by 74.0 per cent to 486,499 units from 1.9 million units, the value of trades slumped by 70.9 per cent to N10.5 million from N36.3 million, and the number of deals went down by 46.7 per cent to 24 deals from 45 deals.
At the close of business, CSCS Plc remained the most active stock by value on a year-to-date basis with 1.1 million units sold for N42.7 million, followed by Geo-Fluids Plc with 2.9 million units valued at N20.3 million, and FrieslandCampina Wamco Nigeria Plc with 217,757 units worth N13.1 million.
The most active stock by volume on a year-to-date basis was Geo-Fluids Plc with 2.9 million units valued at N20.3 million, trailed by Industrial and General Insurance (IGI) Plc followed with 2.9 million units traded for N1.9 million, and CSCS Plc with 1.1 million units worth N42.7 million.
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