Nigeria’s Free Trade Zones (FTZs) have been pivotal in efforts to boost industrialisation, attract foreign investment, and create jobs. Yet, their full potential has not been realised due to inconsistent policies and inadequate infrastructure. The appointment of Dr. Olufemi Ogunyemi as Managing Director of the Nigeria Export Processing Zones Authority (NEPZA) in October 2023 brings renewed attention to the critical role of FTZs in Nigeria’s economic landscape.
Dr. Ogunyemi enters the role with clear priorities. He aims to revitalise underperforming zones, introduce digital efficiencies, and list these zones on the Nigeria Stock Exchange (NSE) to attract broader investment. Despite his medical background raising questions about his suitability for this economic role, Ogunyemi’s success will ultimately be measured by his ability to achieve tangible results within these objectives.
Revitalising Underperforming Zones
Nigeria’s free trade zones have not always met expectations. While some zones have attracted investment and boosted exports, many have struggled due to poor infrastructure, inconsistent regulations, and a lack of strategic direction.
Revitalising these zones is one of Dr. Ogunyemi’s top priorities. He plans to conduct thorough assessments of the challenges each zone faces and implement targeted interventions to address these issues. This is a crucial step in ensuring that these zones fulfill their intended purpose of driving industrialization and export growth. However, success will depend on NEPZA’s ability to secure significant public and private sector support for infrastructure and logistics improvements.
Digitising NEPZA’s Operations
Another major focus for Dr. Ogunyemi is the digitisation of NEPZA’s operations. Embracing digital transformation has become essential across all sectors, and Nigeria’s FTZs must keep pace. By digitising regulatory and operational processes, NEPZA aims to reduce bureaucratic inefficiencies, enhance transparency, and create a more investor-friendly environment.
This transformation is vital, as current regulatory processes have been criticised for being cumbersome and opaque. Modernising these operations will likely improve the ease of doing business and attract more international companies to Nigeria’s FTZs. However, the success of digitisation will depend on how well NEPZA integrates these systems into existing government frameworks and maintains robust cybersecurity.
Listing FTZs on the Nigeria Stock Exchange
One of Dr. Ogunyemi’s most ambitious proposals is to list Free Trade Zones on the Nigeria Stock Exchange. This approach would significantly alter how these zones are financed and managed. By allowing public and institutional investors to invest in these zones, Ogunyemi aims to raise capital for further development.
Listing on the NSE would open new financing channels and increase the accountability of zone management. However, this strategy carries risks. The scrutiny of the stock market demands a level of financial transparency and consistent performance not typically associated with Nigeria’s public sector. Additionally, the volatility of the stock market raises questions about its suitability for financing long-term infrastructure projects.
Broader Implications for Nigeria’s Economy
The outcome of Nigeria’s FTZs under Dr. Ogunyemi’s leadership will have broader implications for the nation’s economy. These zones are designed to be industrial hubs, generating employment and increasing exports, which would help reduce Nigeria’s reliance on oil. If Ogunyemi’s plans to revitalise the zones, introduce efficiencies, and raise new capital succeed, Nigeria’s industrial base could expand significantly.
However, these reforms face broader structural challenges, including unreliable energy supply, a complex regulatory environment, and an unpredictable macroeconomic landscape. While Ogunyemi’s plans are well considered, their success will depend on careful execution and effective coordination with other government agencies—historically, a significant challenge in Nigeria’s economic policy.
In conclusion, the coming years will be a critical test for Nigeria’s Free Trade Zones under Dr. Olufemi Ogunyemi’s leadership. His pragmatic focus on revitalisation, digital transformation, and innovative financing could unlock the potential of these zones. Yet, the challenges are considerable, and the success of these efforts will shape Nigeria’s industrial future, determining whether FTZs become thriving engines of economic growth or remain unrealised aspirations.
