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The Nigerian Export Processing Zones Scheme

Posted by on 12/23/2003 1:23:38 PM | Views: 1491 |

The Nigerian Export Processing Zones Scheme

INTRODUCTION The enabling law for the establishment and lanagement of the Export Processing Zones (EPZ) scheme in Nigeria is the Nigerian Export Processing Zones Authority Decree No. 63 of 1992. By this decree, administration of the Nigerian EPZ programme is vested in the Nigerian Export Processing Zones Authority (NEPZA). NEPZA is thus, empowered to grant all requisite permits and approvals tor operators in EPZs to the exclusion of all other government agencies and bodies.

The regulatory regime tor EPZs in Nigeria is liberal and provides a conducive environment for profitable operations. The incentives available to operators in Nigeria's EPZs compare favourably with the most attractive elsewhere in the world and are the best in the region. They include one hun dred per cent foreign ownership of investments, "one stop" approvals, no import or export licenses, duty free import of raw materials, unrestricted remit tance of capital profits and dividends, tax holidays and no strikes. The country's pioneer EPZ is the Calabar Processing Zone.

CALABAR EXPORT PROCESSING ZONE

The Calabar EPZ provides investors with one of the most suitable sites for export manufacture in Africa. The Zone provides serviced industrial and administrative facilities at the most competitive rates obtainable for facilities of such standards in Africa. In addition to public supplies of such utilities as power, water and telecommunications, the zone has its own private back-up supply of these essen tial utilities and services.

Calabar, the city in which the EPZ is sited, is an ancient and historic city with an enviable past, hav ing served as the capital of the Southern Protectorate of Nigeria before the amalgamation of the Northern and Southern Protectorates in 1914.

The serene and beautiful city served as the centre of operations for the Royal Niger Company during the hey days of the oil palm trade as well as being an age-long centre of learning. It is present ly the capital of Cross River State in south-east Nigeria and is fondly referred to as the "Canaan City, the biblical land flowing with milk and honey." Although one is not likely to actually find milk and honey flowing on the streets of this clean, enchant ing and alluring city, one will definitely discover the warmth and hospitality of the people of Calabar in abundance.

There are other attributes which make the choice of Calabar as the site of Nigeria's pioneer EPZ an excellent one. The city has good road links with other parts of the country and is traversed by the Trans-African Highway, a major gateway to the Republic of Cameroun and other countries of Central Africa. Its modem seaport adjoining the EPZ is of special advantage and will result in signif icant savings for shipping and haulage services for investors in the Zone. The city's international air port is less than twenty minutes drive from the site of the Calabar EPZ.

Several airlines provide Calabar with interna tional and local air travel services. ADC Airlines the major operator from Calabar Airport - operates daily domestic flights to and from Lagos and Port Harcourt, with connecting international flights to destinations in Africa. The airline also operates flights to Ghana, Liberia, Sierra Leone and Guinea. Nigeria Airways flies to Calabar enroute to Equatorial Guinea and Cameroun. Another private airline, Skyline, offers daily services to and from Lagos and Enugu.

Calabar and its environs have a pool of skilled and trainable manpower with significant industrial experience. Such manpower is availably at very competitive rates, which rank among the lowest in the world. There are several institutions of higher learning in Calabar and its environs which provide university, technical and vocational education. If the need arises, these institutions can provide any special training needs and support services that producers in the Zone may need. Industrial activity in Calabar is largely in natural resource-based industries such as oil palm,wood, limestone, rubber, cocoa and coffee.

However, activities in the oil and gas industry, especially the Aluminium Smelting Plant in near-by Ikot Abasi and the activities of Mobil Producing Nigeria Unlimited, based in nearby Eket, offer prospects for linkages between manu facturers in the Calabar EPZ and these industries. Moreover, the disposition of its people, its rich history, culture and several natural attractions make Calabar an ideal tourist location. Attractions in Calabar and within surrounding towns in Cross River State include the Agbokim Water Falls, Qua Falls, the Gorilla Sanctuary in the Kanyang National FACILITIES WITHIN THE ZONE

Facilities available under the Calabar EPZ are as follows:

(a) Serviced plots; (b) Uninterrupted power and water supply; (c) Modern and efficient telecommunica tions system; (d) Excellent internal road network; (e) Built-up Factory space; (f) Modern catering and recreational facili ties; (g) Banking Services; and (h) Customs Services. INDUSTRIES PERMITTED WITHIN THE ZONE

Industries permitted within the Calabar EPZ are the following:

(a) Electrical and Electronic Products; (b) Textile Products; (c) Garments Production; (d) Wood Products and Handicrafts; (e) Leather Products; (f) Petroleum Products; (g) Rubber and Plastic Products; (h) Cosmetics and other Chemical Products; (i) Metal Products and Machinery; (i') Educational Materials and Sports Equipment; (k) Printing Materials, Communication and Office Equipment; (1) Medical Kits, Optical Instruments and Appliances; (m) Biscuits, Confectioneries and other Food Processing; and , (n) Pharmaceutical Products. Proposals for industries outside the above list ings will be considered on their individual merit.

SUMMARY OF INVESTMENT PROCEDURE

The following is a summary of procedures 7. which an investor will normally follow in establishing an industry under the Calabar EPZ:

1 Inquiries and obtaining Investment application g form

2.Inspection of built-up factory space and serv iced industrial plots 3.Submission of Investment application form 4.Processing of application form 5.Where application is approved, apply for com pany registration. 6.(a) Outright purchase of built-up stan dard factory: Payment for the purchase shall be made as follows:

- 10 per cent of the purchase price within 3 months of execu tion of purchase agreement. - The balance of 90 per cent, 5 months after.

(b) Rent of built-up factory space: Rent shall be paid as follows:

- One year rent upon execution of rental agreement. Thereafter, rent shall be payable annually.

(c)Lease of built-up standard factory: Rent for the lease shall be paid in 3 pay ments as follows:

- 40 per cent of the rent payable for the lease on or before execu tion of lease. - 30 per cent of the rent for the lease on or before the end of the 5th year of the lease. - 30 per cent of the rent payable for the lease on or before the end of the 10th year of the lease.

(d) Lease of service plots: Rent for the lease shall be paid as follows:

- 40 per cent of the rent payable for the lease on approval of fac tory construction. - 30 per cent of rent payable for the lease at the end of the 5th year of the lease. - 30 per cent of rent payable for the lease at the end of thelOth year of the lease. 7.Remittance of Investment Capital. 8.Assessment of Investment outlay. 9.Pre-production inspection of factory building,plant and machineries before commencement of production. 10. Obtain certificate to sell 25 per cent of produc tion in the domestic market. CONCLUSION In addition to all the above, Nigeria's continued commitment to the implementation of liberal eco nomic policies that will enhance the development and growth of the export sector coupled with the Naira's favourable exchange rate for exports pro vide an excellent opportunity for profitable export production from the Calabar EPZ.




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