The Sun News

OGFZA, NEPZA and enabling Act brouhaha

Sometimes I wonder if there is something wrong with Nigeria, as a nation. Or if there is a problem with the government. Is the problem in us, as a people, or in our stars? Here, we sometimes define things, but seldom follow it. In wanton display of arrogance and impunity, those appointed to offices do things that contravene the laid down rules. And nothing happens.

At present, there is a contention between the Oil and Gas Free Zones Authority (OGFZA) and the Nigeria Export  Processing Zone Authority (NEPZA) over amendment of enabling Act. These two agencies have their roles defined, which have not been followed, prompting an amendment to the Act. Nobody is looking at the merits of the proposed amendment. Only the politics of it is being highlighted.

Yes, the move to amend some sections in the Act establishing the OGFZA should, ordinarily, be a welcome development. The bill, currently before the  Senate, seeks to strengthen the agency, create an enabling environment for investors and investment, and improve the overall service delivery to clients, in line with global best practices. Nobody who wants things done properly would see anything wrong with this.

However, in recent weeks, and after the oil and gas sector stakeholders’ meeting, which was called to streamline issues that should form the crux of the bill seeking amendment of the Act, some people, mostly from private companies operating within the free zones, teamed up to condemn the move to amend the Act, averring that the proposed amendment, if effected, would, among other things, create a monopoly for the regulator, drive away foreign investors as well as duplicate the functions and operations of a sister agency, NEPZA. They also contended that the amendment would impugn on the integrity of not only the Senate Committee on Trade and Investment but also the entire  Senate.

Well, I have read the comments of the two sides. And I think it is important to understand the issues raised by both the protagonist and antagonist to the amendment of the Act, which was enacted in 1996. While the OGFZA wants the Act amended to allow it perform its statutory functions of regulating the operations of both the private companies and public organisations in the oil and gas, in the free zones, as well as ensuring ease of doing business, especially in granting all requisite permits and licences, supervising and coordinating the operations of related government agencies, like Customs, Nigerian Ports Authority (NPA), Immigration, monitoring board and resolving disputes, which may arise, the other stakeholders would rather want the powers of the OGFZA whittled so that it doesn’t become a “monopoly.” They would also want the OGFZA to remain only in Onne, Rivers State, and not spread to other zones as well as not usurp the functions of the NEPZA, which they believe would be duplicated by the activities and operations of the OGFZA.

The questions have been: Is the OGFZA justified in seeking the amendment of the Act? And, will the integrity of the Senate be impugned if the Act is amended? The answers to these questions can be critically analysed to see what benefits each of these proposals can bring to the table for Nigerians. To start with, The OGFZA feels that if the amendment is effected, it will bring massive investment to the country, ensure that the ease of doing business principle is applied and the concomitant benefit would be realised in both direct and indirect jobs for the citizens.

The OGFZA also contended that if the Act was amended,  it would be in a position to institute reforms that would encourage Foreign Direct Investment (FDI) inflow into the country. It cites models in countries, like Malaysia, United Arab Emirate (UAE), Singapore and China and other places, which have taken advantage of their free zones to attract massive investment into their economy. OGFZA also believes that if the grey areas in the Act are streamlined,  it would be difficult for investors to abandon a business environment that promises them tax-free operations, ensures 100 per cent ownership and repatriation of profit and dividend, and other incentives, which are captured in the roadmap, such as waivers on pre-shipment inspection of goods, faster clearance of goods and round-the-clock operations, which it recently launched.

It is apparent that the Act, when amended, rather than impede the smooth operations at the free zones,  will, from the content of the Bill sent to the National Assembly, correct the flaws that tend to slow down the working of the OGFZA. For instance, investors around the world have choices where to invest their money and if the system is not perfected to give them good business ambience to invest their money, then the country stands a chance of losing them to a more friendly business environment. Today’s investors are always looking for where tariffs are right, where business operations are automated and service delivery very fast. Those are the deliveries, I guess, the Umana Okon Umana management of OGFZA is promising Nigerians.

I really feel that the stakeholders opposed to the amendment of the Act, instead of dissipating energy and resources in hampering the passage of a Bill that seeks to improve service delivery, should rather support its quick passage. The argument that the  amendment would duplicate the functions of the NEPZA is not tenable because the law, especially Section 5(2) specifically states: “ The Authority (OGFZA) shall have the power to take over and perform the functions being hitherto performed by the Nigerian Export Processing Zone, as they relate to oil and gas.” From the name and definition, NEPZA should be an export processing authority, which should dwell on non-oil and gas business in the free zones. From this forgoing, therefore, OGFZA ought to take care of the oil and gas free zones, while NEPZA should concentrate on non-oil.

It does appear that OGFZA was designed as a hub to service the on-shore and off-shore needs of sub-Sahara Africa. This means that its operations ought not to end in Onne, where its office is, but spread to other places, where there is oil and gas business, on-shore and off-shore.  Therefore, Warri Oil and Gas free zone, designed to cover the western Delta, is also an arm of OGFZA, just like other zones in any part of the country, as long as they have something to do with oil and gas.  This is the case with the Nigerian Ports Authority (NPA), which, though based in Lagos, regulates the operations in all ports in the country. If OGFZA should man only Onne, because it is located there, it follows that the country ought to have autonomous NPAs in Apapa Wharf, Tin Can (Lagos), Calabar Port, Warri Port  and Port Harcourt Port. This is not the case and shouldn’t be.

All said, I do not see anything wrong with the proposed amendment of OGFZA Act. The amendment should bring  operations to modern trends, in the management of the free zones, increase investment and create  direct and indirect jobs. The complaining stakeholders, made up mainly, ironically, of non-Nigerian companies, should respect the way Nigerians want to do its business and, therefore, stay within the bounds of the laws governing business practices. If there is need to amend laws to make  businesses more investment friendly, there is nothing wrong. This is the dynamism of governance.


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June 2018
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