17 September 2017, Sweetcrude, Lagos — WITH growing allegations of trade malpractices against corporate organisations inside Export Processing Zones, the Federal Government may clampdown on their operations to restore sanity to the facility designed to boost exports.
Free Trade Zones, as EPZs are also called, are special economic zones where goods may land, be handled, manufactured and re-exported without being subjected to Customs formalities. Import duties and other taxes are usually not applied to the zones as companies operating there are expected to export most of the products manufactured inside the zones.
The latest warning came from the Comptroller General, Nigeria Customs Service, Col. Hameed Ali, (rtd) who alleged that some operators would go to the zone, establish something small and then use that as a base for massive importation.
Ali said the perpetrators took advantage of the various EPZ incentives to import 98 percent of what they were supposed to produce while producing only two percent in Nigeria.
Addressing members of the Manufacturers Association of Nigeria’s Annual General Meeting in an interactive session in Lagos, the Customs boss said in addition to the fight he and his men had at the borders, the FTZs were posing challenges to the service as well.
Companies set up in the FTZs are usually given tax breaks as an incentive to enhance foreign exchange earnings, develop export-oriented industries, and create employment opportunities. Experts consider the benefits of the FTZs desirable, especially for developing countries that need foreign investment to boost growth.
“At a time, we saw over 300 truckloads of rice heading towards one of the FTZs and I was wondering what value addition rice was supposed to offer to the operators in the zone.”
“The Central Bank of Nigeria has not issued import licence for rice in the last one year but we still see this rice in departmental stores all over the nation. But you as manufacturers know your products,” Ali noted warning that steps will soon be taken to evaluate and ascertain the true status of all EPZs in the country and the companies operating in them.
Admitting that it was a herculean task for his men to man the over 4,070 kilometres of borders that Nigeria shares with other nations, the Customs CGC called for synergy between manufacturers and Customs to identify smuggled goods especially rice, in stores.
Some of the functional FTZs in Nigeria are the Calabar Free Trade Zone, Kano Free Trade Zone, Tinapa Free Zone and Resort, Lekki Free Zone, and the Lagos Free Trade Zone.
Within these zones, trade barriers and Customs duties, which prevail in the rest of the country, are minimal or non-functional.