Nigeria’s Oil and Gas Free Zones have been important economic enablers over time. However, in the last two years following the reform initiatives being implemented by the current administration, the Oil and Gas Free Zones have proven to be key drivers of economic growth and development and have significantly enhanced the efficacy of the Federal Government’s economic programmes enunciated in the Economic Recovery and Growth Plan.
The reforms have helped to reposition the Oil and Gas Free Zones Authority (OGFZA), which is the free zones regulator, and used it to reinvent the free zones by turning them around to play their true role as efficient and effective hubs for investments and economic development.
Nigeria’s Oil and Gas Free Zones Authority (OGFZA) was created by section 2 of the Oil and Gas Free Zones Authority (OGFZA) Act number 8 of 1996 as the Regulatory Authority vested with the power to administer and manage Oil and Gas Free Zones in the country.
At present the Authority has regulatory control over four licensed and fully operating oil and gas free zones, namely, the Oil and Gas Free Zone at Onne in Rivers State; the Warri Oil and Gas Free Zone in Delta State; Notore Industrial City in Onne; and the Oil and Gas Free Zone (EKO Support Services) in Apapa, Lagos. The 5th oil and gas free zone, which is the Brass Oil and Gas City in Bayelsa State, has been licensed, but has not yet started full operation.
ECONOMIC RECOVERY AND GROWTH PLAN
The Federal Government has used the Oil and Gas Free Zones as one of the key drivers of its major development policy, the Economic Recovery and Growth Plan (ERGP). The main objectives of the ERGP are economic revival and the stimulation of growth through investment, economic diversification and job creation.
TURNAROUND OF THE FREE ZONES
One of the significant contributions of OGFZA to the EGRP is the turnaround of the Oil and Gas Free Zones. In terms of visibility, the free zones and the Regulatory Authority are better known brands now than they have ever been, witness the significant rise in the number of institutions and individuals at home and abroad that seek to engage with the Authority and the zones. The Authority and the free zones are equally more efficient and more customer-centric now than they were in the past, witness the 2018 ranking of OGFZA as the best out of 44 agencies of government in the Ease of Doing Business. The oil and gas free zones are making important contributions to the success of the ERGP.
In an address to chief executives of agencies and parastatals under the Federal Ministry of Industry, Trade and Investment (FMITI) in Makurdi, Benue State, last year, the Honourable Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah acknowledged that the Oil and Gas Free Zones have attracted investments worth $35 billion into the economy.
Over time the Oil and Gas Free Zones, particularly the one in Onne, Rivers State, have generated more than 100,000 direct and indirect jobs in the economy. New free zones being husbanded by OGFZA promise more opportunities for new investments, job creation and increased revenue to Government. The newly licensed Oil and Gas Free Zone, Notore Industrial City, is expected to attract more than $5 billion in new investments and has the potential to generate 15,000 jobs. The Brass Oil and Gas City located in Brass Island, Bayelsa State—already licensed and soon to start operation—has $3.5 billion investments committed to the project. Brass Oil and Gas City is designed to evolve into a world class export-oriented and gas processing hub with the potential to generate thousands of jobs.
Other good news: Indorama-Eleme Petrochemicals Limited manufactures 100 million metric tons of urea in its Onne plant in Rivers State annually, 70 per cent of which is exported through the company’s export terminal in the Oil and Gas Free Zone, Onne. Notore Chemical Industries Limited, which is the developer of the Notore Industrial City in Onne, Rivers State, similarly produces 500,000 metric tons of fertilizer annually from its plant in Onne. Both firms help significantly in boosting the nation’s strong agriculture production, job creation and revenue generation for government.
FOREIGN DIRECT INVESTMENTS: Reform-driven confidence in the economy has attracted more investments into the oil and gas sector. According to Dr Ibe Kachukwu, Minister of State in the Ministry of Petroleum Resources, investors have made commitments worth $35 billion in new projects in the sector over the next few years. The investments come with the concomitant employment generation and more revenue to government.
PACESETTER IN THE EASE OF DOING BUSINESS: The evidence of positive change in both OGFZA and the free zones is clear in the performance of the Authority in the implementation of the Ease of Doing Business policy. In the 2018 ranking of government agencies in the implementation of the policy, OGFZA raced five places ahead of other 43 agencies to clinch the top spot as the best agency of government in the implementation of the policy on the Ease of Doing Business.
TIMELINES FOR CONDUCT OF BUSINESS: The turnaround in the free zones has quickened the pace of business in the zones. The turnaround time for obtaining a new operating licence in the free zones has been reduced from 28 days to 14 days. It now takes three days to renew a licence, a significant cut from 14 days. Cargo clearance in the free zones takes 48 hours to conclude, in the spirit and letter of the Ease of Doing Business policy.
NOTORE INDUSTRIAL CITY: Under its new leadership, OGFZA has licensed a new free zone developer within the Onne-Ikpokri Free Zone. Notore Industrial City, which received its Free Zone Developer Licence in November 20017, has the potential to make Nigeria a continental hub in gas processing and petrochemicals. The new free zone is expected to attract $5 billion in new investments and generate 15,000 new jobs.
NEW DEVELOPMENTS: A number of new projects are coming up in free zone development. The most important of these is the Brass Oil and Gas City, located on Brass Island, Bayelsa State. The Brass Oil and Gas City is licensed and soon to start operation. More than $3.5 billion investments are already committed to the project. Brass Oil and Gas City is designed to evolve into a world class export-oriented and gas processing hub with the potential to generate thousands of jobs