5 February 2018

Nigeria: Siting Modular Refineries in Oil, Gas Free Zones Will Aid Investment - Nigerian Exporters

Siting modular refineries in the oil and gas free zones would cut investment cost, the Association of Nigerian Exporters, ANE, has suggested.

The president of ANE, Sunny Udoh, gave the suggestion in Abuja during his meeting with the managing director of the Oil and Gas Free Zones Authority, OGFZA, Okon Umana.

Mr. Udoh explained that in view of the regime of incentives that exempts free zone enterprises from import duties and other forms of taxation, establishing modular refineries in the country's oil and gas free zones would cut the cost of investment significantly.

He said the modular refineries proposal should go with the establishment of oil and gas free zones in all oil producing states as a means of diversifying the country's economy.

Besides, he said, the federal government should allow the OGFZA to lead the effort to establish the modular refineries in the oil producing areas to replace the "illegal refineries" in the region.

He said such refineries should be modelled after the U.S. export-oriented refineries to produce special products such as aviation fuel and industrial raw materials.

To allow the OGFZA benefit from the revenue it generates from its operations, the exporter also asked the federal government to allow the agency share in the seven per cent import surcharge fund set aside for port-based agencies of government.

The association's head equally called on the federal government to set up a "dedicated statutory fund" for OGFZA to finance infrastructure development in the free zones.

Mr. Udoh recalled that the presidency in 2006 approved the inclusion of OGFZA in the sharing of the import surcharge fund following the recommendation of the National Council on Commerce, pointing out that the income would enable OGFZA to provide facilities in the free zones to enhance the ease of doing business.

He commended the federal government on the policy that allows goods manufactured in the free zones to be exported into the 'Nigerian Customs Territory', irrespective of whether such goods are on the import prohibition list or not.

The ANE president urged OGFZA to sustain the positive changes in the free zones, particularly the review of excessive tariffs, licensing of a new oil and gas free zone developer, drive to facilitate the birth of new free zones to generate more jobs and collaboration between OGFZA and the Nigerian Content Development and Monitoring Board.

He said sustaining these achievement would ensure higher level of value addition in free zone manufacturing processes in the country.

Meanwhile, Mr. Umana, expressed appreciation to ANE for the support of the programmes and policies of the federal government to attract foreign direct investments, FDI, which he said is at the core of the mandate of OGFZA.

Mr. Umana said his management decided to review charges in the free zones to, "prevent erosion of incentives provided by law for investors, and to provide a level-playing field for all licensees in the free zones."

He said similar intentions informed the support of his management for the amendment of the principal law of the Authority to remove areas of ambiguity that tended to promote confusion and conflicts with sister agencies and reduce its effectiveness as a regulator.

The managing director said ANE's call for a fund dedicated to infrastructure development in the free zones was a welcome one.

"We should provide amenities that investors would benefit from when they come to the free zone," Mr. Umana said.

He lauded the group for its support of government efforts to restructure the economy and generate more exports.

Nigeria

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