Speaks
Free Trade Zones Association Vs Operational Challenges: A Strategic Approach to Problem–Solving in Free Trade Zones
Very often I wonder where the problem of Free Zone in Nigeria is coming from so as to proffer suggestions. Is it the Ministry? Is it the regulatory Authorities? Is it the investors themselves?
This is always difficult to decipher. The story below is my message to Free Zone Investors.
“A man Joe, visited his uncle and stayed with him till it was getting dark. The uncle suggested to Joe that he should start going home since it was getting dark. Joe replied, telling his uncle that light and darkness is the same to him since he is blind. The uncle insisted that going with little daylight will enable vehicles and cyclists see him and not run into him. He then agreed with his uncle and asked for a lamp since it was already dark, to enable other road users see him and avoid him on the road. The uncle then lit a lamp and handed it over to Joe and he left. On his way, a cyclist ran into him and they all fell down. He got up and shouted at the cyclist if he was also blind, that he could not see his lantern. The cyclist asked the blind Joe which lantern and Joe showed him the lamp he was holding, behold the lamp had gone off for lack of oil. The blind Joe did not know that the lamp he was carrying had gone off and was no longer serving its purpose“. The import of the story is for us all, stakeholders, to get up early to address our problems for the smooth operations of the scheme”.
The success of FTZs often hinges on the ability to navigate operational challenges, promote activities, and address bottlenecks caused by other government agencies. An organised Association of Operational FTZs, like the one chaired by Chief Nabil and Elegbede, can play a pivotal role in ensuring the smooth
operation and sustainable growth of FTZs by tackling these challenges strategically. “Strategy is the word here”. Strategy is very important in the growth of Free Trade Zones. It is the logic of actions. Peter Drucker sees it as an indication of an organisation’s positioning for the future. As we know, positioning for the
future is not a one–man action; it is not an action to be left for the government alone. It is a collective deal.
An association of this nature serves as a collective voice for all the FTZs, ensuring that their interests and concerns are presented effectively to policymakers and to the regulatory bodies. This is done by acting as a unified entity. A unified voice enhances bargaining power with government agencies on policy reforms that benefit businesses within the FTZs. The association can advocate for favourable policies, tax regimes, and simplified regulatory procedures like customs.
They engage with government agencies to resolve bottlenecks, this will be backed with good logic andb empirical evidence. Some of the Free Trade Zone enterprises are as old as Free Zones in Nigeria, and are more knowledgeable than the Minister and Permsec. An example is the CEO of combination Industry, NIK Murpuri. He is the first investor in Nigeria FTZ. A regular meeting of the Free Zones managers, of say quarterly, to discuss common interests and proffer solutions can go a long way. Those wearing shoes know where it pinches. We did this in Calabar FTZ when I was the general manager and it worked miracles. Such Meetings will discuss and exchange ideas, and come up with solutions. Even ensuring that Free
Zones are represented at national and international trade dialogues. FTZs often face challenges in gaining visibility and attracting investments due to limited awareness among stakeholders. The association can launch coordinated promotional campaigns to highlight the benefits and opportunities of FTZs to prospective investors, and the public. This important aspect of their mission will lead to organising trade fairs, seminars, and conferences to showcase the success stories and the potentials of FTZs.
In my last piece, I stated that the era of “build it and they will come” has gone. It has to be given adequate and strategic promotion. This can be discussed, agreed and executed effectively and efficiently.
The Association can develop educational materials and outreach programmes to enlighten businesses about the advantages of operating within FTZs. This is very important for reaching a targeted audience. Regulatory authorities cannot handle it alone, and it will be more expensive for zones to do it individually, but with collective efforts, it will be more effective and efficient.
Operational FTZs frequently encounter challenges posed by overlapping or conflicting mandates from various government agencies. These include delays in approvals, regulatory inconsistencies, and excessive bureaucratic procedures. The Association can act as a liaison between FTZ operators and government agencies to facilitate dialogue and effectively resolve issues. This is always better because the Association will engage knowledgeable members or consultants that will address an issue for them and get results.
They will advocate for the harmonization of regulations and the establishment of clear, consistent procedures to avoid conflicts. This will lead to training members of other government agencies for a better understanding of what the scheme is all about. The earlier officers trained by NEPZA & OGZA have all retired and the new officers who are not trained on free zone matters cannot understand why they would not act the way they are going about their jobs. E.g. The Association can work towards the establishment of single–window systems for approvals to streamline operations and reduce delays. I have severally stated that Capacity Building and Knowledge Sharing is the bane of free zone growth in Nigeria. You cannot be working with an ignorant personnel and expecting wonders.
FTZ operations require specialized knowledge of trade regulations, customs procedures, and international markets. The Association can provide training programmes and workshops to enhance the capacity of FTZ managers and operators. Jack Welch says that “the hero is the one with ideas”. Victor Hugo added that “An invasion of armies can be resisted, but not an invasion of ideas”. From our elementary Agric, we know that for the flower to blossom, you need the right soil, right seed, as well as constantly watering it. The same is true for cultivating good thinking for the growth of Free Zones.
The association should create a hub for research and development on trade policies, logistics, and industrial trends. The complexities of FTZ operations today demand a dedicated advocacy group with expertise in trade and economic development. Such a group, within the association, can conduct in–depth analysis and prepare position papers on critical issues affecting FTZs. They will offer technical guidance to policymakers on the implications of proposed regulations for FTZs, talk with the media and train journalists on the bits. Engage with international organizations, such as the World Trade Organization (WTO) and World Customs Organization (WCO), to align local practices with global standards. The Association would provide a platform for collaboration among FTZs, enabling them to: Share resources, such as marketing tools, infrastructure solutions, and logistics networks. Collaborate on joint projects, such as regional supply chain hubs or export clusters exchange lessons learned and collectively address common operational challenges.
Conclusion
I want to conclude that the establishment of an Association of Operational FTZs is a critical step in ensuring a sustained success of FTZs, Through advocacy, promotion, capacity building, and collaboration. The association can address operational problems, enlighten stakeholders, and mitigate the bottlenecks posed by government agencies. A knowledgeable and proactive advocacy group within the association will further strengthen its ability to influence policy and drive the growth of the FTZ ecosystem. By working collectively, operational FTZs can amplify their impact on national and regional economic development. Above all, a regular meeting of the CEOs has its immense social Milieu. It is a heinous crime for a FZ, CEO to have operated for 3–5 years in Nigeria without knowing colleagues in the industry. A stitch in time saves nine. We must cultivate the habit or practice of seeing the big picture. That “we will cross the bridge when we get there”, is undoubtedly a phrase coined by someone who has trouble seeing the big picture and tackling a supposed issue before it gets to you.
All hands must be on deck if we have to grow the Free Zones in Nigeria. We must not be pointing accusing fingers at the line Ministry and the regulatory bodies as the only solvers of Free Zones problems. We can do better to see a better scheme No sitting on the fence.
Chris Ndibe
MD/CEO, Carlcon
