Reacting to a leaked draft proposal by the Federal Ministry of Trade and Industry to transfer the supervision of Free Trade Zones from the Nigerian Export Processing Zones Authority (NEPZA) to the Oil and Gas Free Trade Zones (OGFZA) leading investors in the Zones have threatened to commence divestment from the zones if the planned transfer is sustained.
This is contained in a statement signed on behalf of the investors by the Director of Snake island Integrated Free Zone, Yusufu Abdullahi, which was made available to the media on Saturday.
The investors claimed that the former Vice-President Atiku Abubakar’s company-INTELS- owns major shares in OGFZA and alleged that the proposed reform is “a ploy to destroy multi-million naira private investment in the free zones”.
“The Governing Board of NEPZA should meet with the Stakeholders to listen to our concerns on this issue and collate coordinated views and inform FMITI before going to FEC with a memo. The course of action is to prevent possible disinvestment in the Free Zone Scheme because the affected Zones are all Private Sector Direct Investment without a single government grant.
“For the report to be genuine it should be processed through NEPZA and Free Zone Developers cum-Zone Sponsors, Zone Management and selected Free Zone Enterprises under the Regulatory Authority of NEPZA, they constitute Stakeholders.
The reason is to prevent divestment in the Free Zone Sector because the affected Zones are all Private Direct Investment without a single Government grants”, the statement noted
Explaining the root cause of the crisis, the statement said: “The genesis of the Evaluation of FTZ Licensees was NEPZA’s refusal to comply with FMITI letter Ref. No T/FAL/1164/210 dated 30th April, 2020 directing the transfer of selected free zones regulated by NEPZA to OGEFZA whose primary focus was oil and gas activities and were affected by the interpretation of the Hon. Min. of Justice and Attorney General on Section 5 and 25 of OGEFZA Act, in 2008.
“It was NEPZA’s refusal to comply with the FMITI letter Ref. No T/FAL/1164/210 dated 30th April, 2020 directing the Authority to transfer ‘the free zones currently regulated by NEPZA whose primary focus was oil and gas activities and were affected by the interpretation of the Hon. Min. of Justice and Attorney General on Section 5 and 25 of OGEFZA Act, in 2008 and that the following Private Direct Investments in Free Zone development and Zone Management should be transferred to OGEFZA to regulate viz: Dangote Industries Free Zone, LADOL Free Zone, Snake Island Integrated Free Zone, Tomato Industrial Park, Olokola Oil and Gas Free Trade Zone.
“NEPZA replied to FMITI vide its letter Ref. NEPZA/LS/SF/22/IV dated 20th May, 2020 notifying the Hon. Minister that the announcement and directive of Mr, President that Steve Oronsanye Presidential Committee Report on Rationalisation of the Government Agencies which recommended that “the Onne Oil and Gas Export Free Trade Zone (OGEFZA) be reverted to the Nigeria Export Processing Zones Authority (NEPZA) should be executed.
“NEPZA also drew the attention of the Hon. Minister on the pending Court Case on the same interpretation the FMITI was relying upon was before Federal High Court instituted by a Private Zone Operator against OGEFZA, Ministry of Justice and FMITI which seeks judicial determination of the regulatory powers of OGEFZA over SIIFZ, the later having been licensed to operate under NEPZA Act.
“NEPZA further told the Hon. Minister the solemn fact that, at the time the promoters of all the listed Free Zones commenced the process of setting up their businesses in the country, they were aware of the existence of OGEFZA, yet in recognizing the limitation in scope of approved activities and geographical constraints (Onne/Ikpokiri Area of River State) under OGEFTZA Act, they chose to register under NEPZA, the Authority with statutory powers to regulate ALL activities across ALL parts of Nigeria”, the investors noted.
The statement which called on NEPZA Board to collate and coordinate all views and inform the FMITI by the Board before going to FEC with a memo, accordingly, concluding as follows:
“It is not possible for private sector investment to be transferred into an unknown unlegislated institution “OGFZA”. White Paper cannot be substituted to National Assembly constitutional powersand authority to legislation. The only recognized Free Zones Authority legally recognized is NEPZA. However the report intends to execute the failed effort of the Hon. Min., FMITI in his letter Ref. No T/FAL/1164/210 dated 30th April, 2020 directing NEPZA to transfer five zones being regulated by it to OGEFZA which they declined to do from legal point of views.
“In conclusion, Membership of the Committee are Political Office Holders and Public Servants who do not have investment in the free trade zone but are willing to frustrate and destroy billions of dollars of private investment collaboration in the scheme. It is self-interest composed Committee that is not ready to advance Nigeria’s progress and development but advance personal interest.