Assessing The Role Of Free Trade Zone In The Quest For Imo State Industrial Development

By  ISHIBUDE EMEKA ENYINNIA, Ph.D

One of the much talked about in the achievement of the Governor of Imo State, Senator Hope Uzodinma, CON, in his first tenure, is the approval of the Federal Government for the establishment of a  FREE TRADE ZONE ( FTZ) in Imo State.

Many citizens of the state have diligently inquired on the significance of  a FTZ and what is in it for Imo people.And to mystify it the more, there has been so much talk about dredging the urashi river  to the Atlantic Ocean. All these are milestones in the strides of this Government towards making imo a self sustaining industrial state. 

In this write up, I will try to assess the importance of FTZ. The issue of dredging the urashi river  will come up on another piece .

 A FREE TRADE ZONE ( FTZ) is an area mapped out and designated within a country or state where goods can be imported, stored, processed and re exported without being subject to customs duties, regulations or quotas.  FTZ is set up to promote economic growth and attract local industries and foreign investments by offering various business incentives to investors and providing favourable environment for businesses to operate and grow .

The main feature of a FTZ is the elimination or reduction of customs tarrifs, and quotas on imported and exported goods, thus allowing businesses in the Zone to bring raw materials and components at a lower cost, making their products  more cheaper both in local and international markets .

The implication of this is that customs procedures are streamlined, administrative burdens reduced, so that businesses within the zone enjoy faster processing time and lower costs.

Other characteristics of a FTZ include access to top notch infrastructure provisions, services, tax concessions and exceptions from certain regulations.

All these are designed to attract businesses to the Zone, encourage investments and aid economic growth, stimulate economic activity and create jobs and prosperity.

From the foregoing, we see that  a FTZ is primed to attract foreign Direct Investments which can help develop industrial and exports sectors of any economy and create new job opportunities .

Currently,  Imo State has the largest known deposit of natural gas and a substantial deposit of crude oil. A modular refinery is already operating in Ohaji Egbema .

The biggest gas facilities in Nigeria is already due for take off later this year 2024 in the same Ohaji Egbema area of Imo State. At completion, the Seplat and Shell gas project will generate electricity in excess of 3.6 GW  and provide the gas needs of South East and industrial  Ogun state.

It is envisaged that other refineries, power generation companies, petroleum industries,  chemical and allied industries will take up space in this FTZ. Not only will they enjoy nearness to supply of their raw materials, but also the best facilities  both super and infra structures the government can offer.

The huge investments from all these will surely catapult imo State to an industrial state, opening new jobs , increasing internally generated revenue (IGR), leading to greater prosperity.

FTZ also facilitate technology transfers through companies that invest in the area. These organizations bring in advanced technologies and know how which eventually will upgrade the skills and capabilities of our local work force . This will in turn boost productivity and efficiency.

For our local economy, FTZ will encourage the growth of related businesses especially in supply, distribution and service providers causing growth in entrepreneurial skills and enhancing economies of scale and competitiveness .

For an area like imo state, starved of Federal Government presence for so many years, a FTZ is one sure thing that will accelerate the Federal presence. It will quicken the resolve to dredge river urashi to the ocean as this will give access to light ships to send in raw materials to the zone and take out processed products out for exports.

There will be customs presence, immigration services and all apparatchik of security agencies will be visible. Our airport will get much needed traffic and economic activities will be on the up side 

The economic benefits of FTZ is enormous. The Governor of Imo State,  Senator Hope Uzodinma, CON, has shown a strong political will to drive the Ten year industrial master plan of imo State. It is believed that at the end of it all, imo state will be  better off, not only as an industrial enclave but also as one of the prosperous states in the federation. In the long run, Imo State will become an industrial centre, our youth will be  assured of jobs and employment, limiting the craze for migrations ( popularly called Japa) and preserving our indigenous population and structure.

The shared prosperity mantra of the current administration is definitely not a mouth serve. The establishment of  FTZ is an important tool for any government  seeking to accelerate industrialization and achieve sustainable economic growth. The ten year Imo State industrial master plan would have been an empty paper without a FREE TRADE ZONE 

ISHIBUDE EMEKA ENYINNIA, Ph.D

Is an Economist and Human Capital Development Consultant and Writes from Lagos