Through Zika Bobby
ashishi Kemka, Chief Financial Officer and Operations Manager Lagos Free Zone, spoke about the uniqueness of the LFTZ project and its great potential for the Nigerian economy.
Give us an overview of the Lagos Free Zone and its uniqueness
If you talk about the free zone, you know that it is fairly new in the country at the moment, although Nigeria was one of the first in the world to create the free zone movement and environment in Africa itself.
The history of the Nigerian Free Zone dates back to 1992 when the Nigerian Export Processing Zone Authority (NEPZA) Act was passed. But over the past 30 years, the country has not been able to take full advantage of the free trade zones.
Countries like Dubai and China have exploded from it, and even smaller countries like Ethiopia. Neighboring countries have been able to take advantage of the free trade zones, but the reason Nigeria has not been able to do so is due to poor coordination and understanding.
Also, not many people know about the benefits of free zones. As we speak, there are almost 42 free zones in the country, not all of them are operational. Lagos Free Zone was the first private one to be established in 2002 and it has grown over the years as it started with 200 hectares of land but has grown to 850 hectares.
It is a unique free zone because it is the first private one and serves many purposes for industry. This will be the country’s first free zone to be embedded in the deep sea port. And as we speak, the port is almost 96 percent complete and is due to be completed by the end of September this year, and operations will begin late this year or early next year. The port will solve many problems we face in this country.
The Lagos Free Zone is privately developed and managed by Tolaram, a conglomerate that has operated in Nigeria for 45 years.
As part of the Free Zone, we develop various support infrastructures because we believe in the culture of “live, work and play” so that you can live, work and enjoy your life here.
We have divided the zone into three: industry, logistics and mixed-use park. We have already invited multinational companies such as Salim Group from Indonesia and Kellogs from USA, Colgate from USA, the largest chemical company of BASF, Arla from Denmark and we have also developed facilities such as warehouses and standard industrial plants as well as a fire station and a police station for security .
Aside from these features, what other things will the Lagos Free Zone have that aren’t in the 40+ other zones?
Other unique features include private management and connectivity to the port, as I mentioned earlier. You get the trade facilitation and the kind of infrastructure that we develop. Another advantage we have is our holistic approach and the technology used to make this a smart free zone. When we are an intelligent free zone, I mean that our setup is fully automated. These things are what makes us unique.
Speaking of Smart Free Zone and automation, how does it work and How will this affect trading?
It’s diverse, a paperless transaction that’s faster, and the simplicity of operations and doing business comes into the picture because it’s digitized. People can easily follow the process. Once they know this end-to-end process, it is easier to plan and accelerate business processes.
Are you still automating, are you doing it alone, or do you have connections to companies that know about automation? Who does that for you?
We have an internal team working on it and helping with the implementation of the processes. For example, like yesterday, we had a truck park within the Free Zone that was successfully automated as the users of the truck park, a US company, remain in the Free Zone.
They entered the truck details that are expected; it is in the system and when the truck enters the zone, the information is entered into the system at the entry point, the truck parking lot entrance gate will open automatically for the truck to enter. As soon as it enters, the company receives the information about the trucks that are parked for the company on a daily basis. Even if they want to call the truck back to their facility for loading or unloading, they can do so through the system or app. And an announcement is made in the truck parking lot.
So is there an app?
Yes, there is an app for the LFTZ for easy tracking. On the other hand, we get a lot of support from government agencies, especially from Customs and NEPZA.
NEPZA is our regulatory body that regulates all free zones in the country. We will soon start a pilot project from customs, because the advantage of the free zone is that you can import and export goods duty-free.
If you sell the goods manufactured in the free zone using imported raw materials, you will have to pay the corresponding duties on the imported raw materials used in the manufacture when selling the goods in the customs area.
All of these calculations and systems were done manually but with the help of Nigerian Customs and their technological arm we were able to develop a project and system which will soon be operated as a pilot where the imported raw materials are automatically recorded and when the goods are sold on duty paid on the imported raw material components.
It looks like a win-win situation for you, the workers, the government and other investors. Can you tell us what is to be achieved in the next 10 years?
As I said, the Lagos Free Zone is 850 hectares and it is expected to be developed over time as there is no point in developing the whole zone at once. So we develop it in phases; in phase 1 we have around 360 hectares of land that will be completed by the end of next year. As I speak, the zone has attracted over $2.5 billion worth of foreign direct investment (FDI) to the country and created more than 4,000 jobs within the zone. So the benefits of the zone are that over the next 10 years we expect to attract more than $5 billion in FDI and create more than 20,000 jobs in the country.
But the uniqueness of our free zone is that it was set up by the industrial port, which has neighbors like Lekki Free Zone, another free zone being developed by Lagos State Government and Chinese Government. We also share our borders with Dangote Fertilizers and Petrochemicals and other free zones that are expected to emerge. We expect that the entire Lekki Axis and its industrial corridor will contribute between 5 and 10 percent to the national GDP in the coming 10 years.
How many companies have you brought on board?
To date, the LFTZ has more than 20 registered companies and prospects for further growth.