Nigeria’s Special Economic and Free Zones have attracted more than $200 billion in foreign investment and over N900 billion in domestic investment, according to the Federal Government.

The government also said the zones have generated more than 100,000 direct jobs, with the broader impact rising to over 500,000 jobs when employment linked to supply chains, logistics operations and host communities is included.

The Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, disclosed the figures during a virtual engagement with stakeholders in the Special Economic Zones sector.

She said the government was working to update the regulatory framework governing the zones in response to changes in business models and investment patterns.

Government Moves to Reform Free Zones

According to the minister, the proposed reforms are intended to strengthen the effectiveness and competitiveness of Nigeria’s free-zone system while improving accountability.

One of the issues identified by the government is the movement of goods produced within free zones into the Nigerian Customs Territory while benefiting from incentives originally designed to support export-oriented businesses.

Under the proposed framework, the government intends to clarify the existing 75 per cent export and 25 per cent domestic-sales structure and ensure that domestic sales comply with applicable Nigerian tax laws.

The reforms will also clarify the responsibilities of agencies involved in the administration of the zones. NEPZA and the Oil and Gas Free Zones Authority will continue to oversee licensing and operations, while the Nigeria Revenue Service will be responsible for tax administration and the Nigeria Customs Service will retain its customs-control functions.

Digital Free Zones to Support Technology Businesses

A major element of the proposed changes is the introduction of Digital Free Zones and Digital Special Economic Zones.

The government says the new framework is designed to accommodate businesses that may not need a conventional physical location, particularly technology and digital-service companies.

Under the proposed system, new licence categories, including an Innovator Licence, are expected to cater to businesses operating in emerging areas where regulatory frameworks are still developing. Reporting and fee requirements are also expected to reflect the business models of digital enterprises.

The Federal Government has said the digital initiative is intended to help Nigeria attract more technology businesses, investment and employment while expanding the country’s participation in the global digital economy.

Investors Seek Protection During Transition

While operators have welcomed the planned reforms, stakeholders have urged the government to ensure that existing investors are protected as the new framework is introduced.

The Executive Secretary of NEPZA, Toyin Elegbede, said operators supported the development of a transparent and properly regulated system but stressed the importance of avoiding uncertainty for businesses that made investments under the existing rules.

NEPZA Chairman Hadi Mutallab similarly called for a clear and predictable transition process that would safeguard legitimate investments while ensuring that incentives provided to free-zone operators achieve their intended objectives.

Focus on Non-Oil Exports

The Federal Government said it intends to use the reforms to strengthen Nigeria’s non-oil export capacity and make the country’s free zones more effective engines of investment, production and employment.

The administration has also linked the development of the zones to its broader economic objectives, including efforts to attract investment and support the long-term goal of building a $1 trillion Nigerian economy by 2030.

The regulatory review is currently progressing through the drafting stage, with government agencies and stakeholders continuing consultations before the revised framework is finalised.

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