Umana: Nigeria’s Oil and Gas Free Trade Zones are Globally Competitive


Managing Director, Oil and Gas Free Zones Authority, Umana Okon Umana, in this interview with Chineme Okafor, stated that though there are challenges affecting free trade zones in the country, they can still compete favourably with other establishments across the world. Excerpts:

You have been on the saddle since September 2016. What did you meet, and how have you moved on from there?

Yes, truly, I took over as the Managing Director of the Oil and Gas Free Zones Authority (OGFTA) in September last year, and I hit the ground running immediately and dealt with some foundational issues, which I addressed by first setting a management retreat from which a roadmap for the authority was initiated.

Within the roadmap are issues on how to promote and sustain Foreign Direct Investments (FDIs) within our zones and providing the right environment in terms of ensuring that existing incentives in the zones are known to investors.
We were able to do that and have also produced a brochure to help potential investors have documented records of what we offer and their obligations.

I want to state that the incentives we offer compete well with that offered by other free trade zones globally, and since I took over, we have taken steps to look at operational deficiencies such as the period it takes to renew licenses.

What was the process of licence renewal like before you took over?

Before I took over, the period was about 14 days, but we have reduced that to three days and if all our investors meet the requirements for the renewal of licences, which include payment of renewal fees, submission of annual returns and meeting all other obligations to the authority, they will have their licenses renewed within 48 hours and I believe that also keys into the Ease of Doing Business policy of the federal government.

You talked about foundational issues you met on ground. What are they really?

They had to do with capacity of staff to deliver on our core mandate of attracting FDIs and promote economic development. We had to address that and this was through the management retreat which set the goals and vison of the authority as well as its values which would drive performance.

After that, we had a stakeholders meeting with all the other agencies of government that operate within the zone – customs, immigration, the Nigerian Port Authority (NPA), and then of course, the investors. We had a roundtable discussion and made our commitments to improve on service delivery and assured that it would no longer be business as usual because we needed to improve on the Ease of Doing Business in Nigeria.

I also discovered when I took over that the authority didn’t have operational presence even in Nigeria. It was barely visible and when it is not known even by Nigerians, how do you expect investors to know of its existence. We have now made it known to Nigerians and its values to fast-track development because Nigerians will benefit from increase in employment and transfer of technology going forward.

Do you have a specific target of FDI you hope to attract?

Yes, in our roadmap, we clearly stated that our target over the next four years is to grow our FDI by over 40 per cent, and that is the target that is clearly spelt out.
We are also looking to upscale the strength and capacity of the authority to play its role as a regulator because I discovered that many of the players in the free zone do not understand our role as a regulator, we are looking at that to ensure that the regulations are enforced and all the operators abide with extant laws and regulations.

Are there plans to set up new zones?

We are also looking at how to establish new zones in partnership with the private sector. Onne is a good example of a Public Private Partnership (PPP) that has worked and I had presented it at global events as one of the free trade zones that are based on the PPP model that has worked. It is also based on a cluster model because its activities are centered on oil and gas and it has given the federal government through the NPA over $2 billion in revenue between 2010 and 2016.

The tool of the free zones as a strategy to drive investment and development is not in doubt, it has been used successfully in Dubai and Malaysia and I am happy the government is paying attention to free zones. There is a budget of N43 billion in 2017 for six special economic zones and this goes to underscore the importance that the government is according the free zones now as economic tool.

We are partnering state governments like Delta and Akwa Ibom, and currently looking at Ondo state to establish a new free trade zone dedicated to oil and gas activities. Work is also being done on our legal framework to help us deliver on our mandate appropriately.

Are there specific challenges that you have had with investors since you assumed office?

The economic downturn and recession have impacted on activities in the zones. Naturally you will expect that to be the case because the activities revolve around oil and gas, and you have the downturn in the price of oil globally.
We have had a reduction in the number of companies in the zones arising from this and the recession but we know that things will pick up again very soon. The prospects are bright that things will pick up.

How serious is the threat from neighbouring countries like Mozambique, which is creating incentives for oil and gas investments, to your operations?

To be honest, the threats are real. The attraction of investment is not a domestic affair; it is an international one because investors have options to choose from. Nigeria is just one of the options, that is why we are trying to work hard to put our free trade zones before the world with good incentives because if people don’t know about what you have they won’t come around.

We are trying to market our free trade zones as we recently did at the last World Free Trade Zones Convention in Doha, and we explained the reforms that are ongoing in the country today, as well as measures to improve our Ease of Doing Business. Nigeria has a very strong market and the numbers confirm this because as a country with our market and population, we must be taken serious as a destination for investors who are looking at free trade zones around the world.