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 Dipo Olowookere
The Minister of Budget and Economic Planning, Mr Abubakar Bagudu, has stressed the key role decentralised initiatives play in unlocking economic opportunities across the country.
Speaking in Abuja on Wednesday when he received members of the Crop, Aquaculture, Livestock Farmers and Value Chain Economic Actors Association of Nigeria (CALFAN), the Minister noted that initiatives like the Renewed Hope Ward Development Programme of President Bola Tinubu concentrate development planning at the ward level, which is the lowest administrative unit in Nigeria’s governance structure.
He welcomed the decision of the farmers’ group to collaborate with the federal government to accelerate the programme’s implementation.
Mr Bagudu explained that the project aims to enable communities to identify their development opportunities rather than relying solely on a top-down approach, adding that Nigeria has 8,809 wards, each with unique economic prospects that can be accessed through targeted interventions.
Under the initiative, wards will determine their priority economic opportunities, after which the federal government, state governments, local authorities, and development partners will work together to provide the necessary support.
According to him, Nigeria’s constitutional framework assigns development responsibilities to the three tiers of government, but in practice, these roles have not always been well coordinated, often resulting in duplication, inefficiencies, and interruptions in development initiatives.
“Our belief is that every ward in Nigeria is an acre of diamonds waiting to be uncovered. Each community has its own strengths and potential, and development strategies must reflect these distinctive qualities,” he said.
In his remarks, the president of CALFAN, Mr Aliyu Abdulraheem, outlined the association’s proposal to serve as a field-level implementation partner for the Renewed Hope Ward Development Programme.
He highlighted CALFAN’s extensive grassroots structure, including Ward-Level Extension Service Offices (WESOs) and a digital platform that supports real-time beneficiary identification, community mobilisation, data collection, and monitoring of development activities.
He disclosed that the proposed platform would facilitate economic mapping of rural communities, infrastructure assessments, digital surveys, and real-time data collection to support evidence-based policy decisions and programme monitoring.
The CALFAN boss highlighted the inclusive approach that encompasses the entire agricultural value chain, including farmers, input suppliers, processors, transporters, traders, and service providers.
Unveiled in 2025 by President Tinubu, the Renewed Hope Ward Development Programme aims to reset development planning by boosting economic activities at the ward level through collaboration among the federal, state, and local governments.
By Adedapo Adesanya
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has granted import permits for Premium Motor Spirit (PMS) or petrol to six depot owners and petroleum marketers.
This step comes as the federal government moved to ensure stability and balance in the country’s downstream fuel sector after it was widely reported that the country suspended the issuance of petrol import licenses for a second straight month
The regulator recently issued these permits to six importers, with each authorised to import approximately 30,000 metric tonnes of the fuel into the country to help cushion against the effects of escalating conflict in the Middle East.
This development also occurs against the backdrop of ongoing discussions about supply concentration, with recent data showing that the Dangote Petroleum Refinery supplied roughly 92 per cent of Nigeria’s petrol in February.
At present, the Dangote refinery is the sole facility in Nigeria producing petrol, while most modular refineries primarily focus on diesel output.
The Crude Oil Refineries Association of Nigeria (CORAN) also confirmed that none have been issued so far in March, signalling a shift towards prioritising local output. However, this has since changed, spurred by the latest development.
Industry statistics show that local refining provided an average of about 36.5 million litres per day that month, with imports adding roughly 3 million litres daily, resulting in a total supply of around 39.5 million litres per day.
According to reports, until recently, no petrol import permits had been issued under the current NMDPRA leadership, suggesting that the new approvals signal a deliberate policy shift to preserve supply diversity and adaptability as the domestic market continues to develop.
Nigeria’s average daily petrol consumption fell to 56.9 million litres per day in February 2026, down from 60.2 million litres in January.
In February, the Dangote Refinery supplied 36.5 million litres of petrol and 8 million litres of diesel to the local market, leaving a daily deficit of 20 million litres that was covered by previously imported stock.
According to NMDPRA, these volumes were sufficient, leading to its earlier decision to withhold import licenses.
By Adedapo Adesanya
The Centre for the Promotion of Private Enterprise (CPPE) and the Lagos Chamber of Commerce and Industry (LCCI) have called for trade expansion ahead of President Bola Tinubu’s state visit to the United Kingdom.
In separate communications, the organisations urged President Tinubu to deepen economic ties as he visits the UK on the invitation of the King of England, King Charles III. His state visit to the UK next week will mark Nigeria’s first such visit to the UK in 37 years, when Military President Ibrahim Babangida was head of state.
The chief executive of CPPE, Mr Muda Yusuf, said the planned visit by Mr Tinubu to the UK is significant on multiple fronts.
“At a time of shifting global alliances and economic realignments, the visit presents both opportunity and responsibility.
“It is expected that leading Nigerian business figures will accompany the President, creating a platform for expanding trade flows, deepening investment partnerships, promoting Nigeria as a destination for capital, and strengthening financial-sector linkages.
“The UK remains a major source of portfolio flows, development finance, and private-sector investment into Nigeria. Structured engagements during the visit could unlock opportunities in infrastructure, energy, financial services, technology, manufacturing, and agribusiness,” Mr Yusuf stated.
On her part, the Director General of the LCCI, Mrs Chinyere Almona, noted that the visit represents a historic opportunity to recalibrate Nigeria–UK relations from traditional diplomacy to focused economic diplomacy.
“At a time when Nigeria is implementing bold macroeconomic reforms, this visit should be leveraged to secure concrete commitments on trade expansion, long-term investment, and cooperation on the business environment.
“From the perspective of the Lagos Chamber of Commerce and Industry, the overriding objective should be to translate goodwill into measurable economic outcomes that strengthen Nigeria’s productive base and export capacity,” she said.
According to her, recent data underscore the strategic importance of the UK to Nigeria’s economy, noting that in Q3 2025, Nigeria recorded capital importation of approximately US$6.01 billion, representing a significant year-on-year surge.
“Notably, the United Kingdom emerged as Nigeria’s largest source of capital inflows, accounting for about US$2.94 billion, or nearly half of total inflows during the quarter. These inflows were driven predominantly by portfolio investment, particularly into the financial and banking sectors, reflecting renewed foreign investor confidence following Nigeria’s macroeconomic adjustments.
“On the trade front, total trade in goods and services between Nigeria and the UK stood at approximately £8 billion in the 12 months to mid-2025,” she said.
She said, however, that the relationship remains structurally imbalanced, with UK exports to Nigeria significantly exceeding Nigeria’s exports to the UK.
“Ultimately, the economic agenda of this state visit should be guided by Nigeria’s most pressing challenges: export diversification, inflation-induced cost pressures, infrastructure deficits, and the need for stable long-term capital,” Mrs Almona said in an interview with Nairametrics.
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