Only viable free zones should be licensed—Umana, Sodade
At the first session of the Nigeria Business Roundtable in Lagos at the weekend, a regulator and a developer of free zones both spoke with one voice in emphasizing the policy of total compliance with a strict regime of requirements for operating licence by prospective free zone developers.
The managing director of Lekki Worldwide Investments Limited, Dr Tunde Sodade, a free zone developer, directed the focus on the licensing question when he observed that there were too many unviable free trade zones in the country, and blamed the situation on the business design and licensing process for free zones.
The managing director of the Oil and Gas Free Zones Authority (OGFZA), Mr Umana Okon Umana, a free zone regulator, in his intervention, said the OGFZA licensing process was based on a strict and rigorous evaluation that puts emphasis on the viability of the business design rather than on political considerations. He said OGFZA’s painstaking licensing process in part explains why the few free zones licensed by the agency are among the most successful in the country. He cited Onne Oil and Gas Free Zone, licensed and regulated by OGFZA, as a model of success in free zone development, and stressed that application for free zone status must be an economic proposition that meets the test of viability.
Umana, Sodade and Dr Chris Asoluka, former chairman of the OGFZA board, made up the faculty at the first session of the roundtable that discussed free zones as an economic system with great potential to impact development positively. Umana highlighted the economic value of free trade zones, describing them as the engines of growth in economies around the world.
He said development experts all over the world have consistently seen the free zones in that light, which has been bolstered by statistics that shows that there are more than 5,000 free zones around the world generating more than 50 million jobs. Umana, who led the discussion, agreed with his co-panelists that there were huge opportunities in the free zones as business clusters to empower small and medium size enterprises and further generate more employment through multiplier effect. They said the Nigerian content law is meant to drive inclusion and participation for local small businesses and individuals in the opportunities available in the free zones.
Umana explained that the Federal Government decision to fund the establishment of six special economic zones in the country with effect from the 2017 budget underscores the value that the current administration places on the free zones as a mobiliser and magnet for investments and job creation.
Dr Sodade called for better business design for and rigorous evaluation of applications for free zone status to guard against failure. Dr Asoluka drew attention to the need for better quality service delivery in the free zones to face off competition from rival free zones in the southern African region and other parts of the world.
The former OGFZA chair said Onne was perfectly positioned to continue to offer leadership in free zone services in Africa.
The roundtable, which was convened by Dr Ogho Okiti, CEO of Time Economics and publisher of the Business Post, had three sessions of discussion on the Oil and Gas Free Zones, SMEs and the Payment System. Dr Okiti said the purpose of the roundtable is to stimulate discussion on the economy with a view to impacting public policy.
Discussants at the first session of the Nigeria Business Rountable (NBR) in Lagos at the weekend. L-r: Dr Tunde Sodade, MD Lekki Worldwide Investments; Umana Okon Umana, MD OGFZA; Dr Okiti, convener of NBR and CEO Time Economics; Dr Chris Asoluka, fmr chair OGFZA