The World Bank has called for a single Regulatory Authority for the operations of free zones in Nigeria.
The advice was given at the Public Hearing organised by the House of Representatives Committee on Commerce in respect of a proposed amendment to Oil and Gas Export Free Zone Authority (OGEFZA) Act.
In his presentation, Craig Raymond Giesze, Senior Operations Officer, Trade & Competitiveness Global Practice, World Bank Group stated that the institution had always advised countries seeking to attract investments into their economies through their free zones “to adopt the single regulatory authority regime for a number of reasons based on knowledge garnered over the years of what foreign investors look out for in an economy”.
He said: “Beyond the fact that a single regulatory authority is global best practice, the benefits include the fact that it reduces administrative costs; the approach creates investor confidence in an economy; investors abhor a confusing regulatory environment and consider such environment as too risky but prefer consistency in regulation because a single regulatory authority offers long-term stability that guarantees safety of investments. In that regard, the World Bank perspective would be that Nigeria should seriously consider the adoption of a single regulatory authority regime for its free zones”.
Chairman of the House Committee on Commerce, Sylvester Ogbaga, said the key objective of the public hearing was for invited stakeholders to make input that would assist the Committee in its legislative assignment of amending the proposed OGEFZA Act based on global best practice in order to increase the contribution of the free zones scheme to the national GDP.
The Managing Directors of OGEFZA and NEPZA stated that the supervising ministry of both agencies had stated that it would need time to review and harmonise their respective submissions. Further, they requested a postponement of the public hearing pending the review of the ministry and the submission of their memoranda.
General Counsel, Snake Island Integrated Free Zone (SIIFZ) Adewale Dosunmu advised the Committee to ensure fairness, equity and justice in the course of executing its assignment by ensuring that stakeholders are given an opportunity of publicly knowing and reacting to the submissions of Nigerian Export Processing Zones Authority (NEPZA) and Oil and Gas Export Free Zone Authority (OGEFZA) through a second public hearing by the Committee especially after harmonization of the positions of the two contending agencies by their supervising ministry the Federal Ministry of Industry, Trade and Investment.
Dosusmu pointed out to the Committee that four presidential and ministerial review committees set up by three previous administrations over the last two decades had recommended the merging of OGEFZA with NEPZA as best practice. This would remove confusion as to who regulates what and would bolster investor confidence in Nigeria. In addition, it would reduce the cost of governance by eliminating double expenses for two agencies who would ultimately be performing the same function.
Furthermore, he informed the Committee that a proper examination of the existing OGEFZA Act for which the amendment was being sought would reveal that the intentions of the framers of the OGEFZA Act and that of then Head of State, General Sani Abacha, was specifically to restrict OGEFZA operations to only Ikpokiri and Onne Zones. He contended that the activities of OGEFZA over the years had not been in compliance with the provisions of the extant Act and proposed amendment in its current form would ratify years of unlawful activities.