Reps probe Export Free Zone operations, query utilisation of N.3bn accrued revenue

The House of Representatives on Thursday resolved to investigate the operations and management of the Export Free Zones Authorities in Nigeria.

The resolution was passed sequel to the adoption of a motion sponsored by Hon. Ntufam Eta Mbora.

According to the sponsor of the motion, the regulatory agency failed to account for the revenues accruing to the operating registered companies in the designated free trade zones estimated at N300 million and failed to ensure proper monitoring, maintenance of proper transfer pricing audit documentation resulting in shortchanging the country.

He said: “The House notes that the Calabar Free Trade Zone (CFTZ) formerly known as Calabar Export Processing Zone (CEPZ) came into existence in 1992, modified and rebranded as Calabar Free Trade Zone in 2001 whereas the Oil and Gas Free Trade Zone (OGFTZ) Onne, Port Harcourt was established in 1996 but began operation in 2001 as the first two established free zones followed by the establishment of Lekki Free Trade Zone in 2006, while the Warri port complex was upgraded to free trade zone in 2011.

“The House also notes that the aims of establishing free trade zones are for the provisions of foreign exchange earnings, job creations, revenue generation, attract direct foreign investment to enhance knowledge, technology transfer, grants, requisite permits and licenses to conduct approved enterprises within the free trade zones, and to regulate, supervise, manage, control and coordinate the activities of free trade zones in the country.

“The House further notes that series of the country’s growth and economic indices have continually slowed down because of over-reliance on the oil sector and deliberate abandonment of the non-oil sectors by successive governments and negligence of trade and commerce which remains a veritable sector to sustain the economy particularly in the face of dwindling revenue from the oil sector and the Coronavirus pandemic.

“The House is aware that billions of naira have been expended into the Free Trade Zones and Oil and Gas Free Trade Zone on their establishment and huge budgetary allocations have been provided in the past fifteen years without commensurate result in terms of infrastructural development and achieving the aims for which they were established.

“The House is worried that since the inception of these Free Trade Zones, given the volume of investments by the Federal Government of Nigeria and the enormous revenues accruing to the operating registered companies in the designated free trade zones which is in the neighbourhood of N300 million without proper monitoring, maintenance of proper transfer pricing audit documentation resulting in shortchanging the country.

“The House observes that inconsistencies and concerted collaborations at the Oil and Gas Free Trade Zones have resulted in numerous shortages and leakages on effective and correct revenue collection, diversion, and non-remittance to appropriate Federal Government agencies.”

To this end, the House mandated its Committee on Commerce to investigate the activities of the Free Trade Zones, the Oil and the Gas Free Trade Zones to determine revenue leakages and carry out an analytical overview of the operations of the Nigerian Exporting Processing Free Zone Authority (NEPZA) and Oil and Gas Free Trade Zone Authority (OGFTZA) and report back within six weeks for further legislative action.

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