If you’re up to date with news in the real estate market of Lagos, Nigeria, you’ll have heard of the Lekki Free Trade Zone. This so-called zone has been the major selling point for most realtors who are trying to sell land in Epe.
Just to mention, the Dangote refinery and Alaro City are both being developed in the Lekki Free Trade Zone. So what exactly is this Lekki Free Trade Zone? In this article, we’ll break down all the details concerning LFTZ and the benefits that can be derived from it as a state and country.
What is the Lekki Free Trade Zone?
Lekki Free Trade Zone is an economy formed by the Lagos State Government of Nigeria with the main purpose of eliminating custom’s duties when it comes to importing and exporting. This single step will attract investors and businesses that want to expand their market in Africa.
The latest report by the World Bank shows that the Lekki Free Trade Zone is the fastest-developing free trade zone in the world. That brings us to the question of what a free trade zone is.
What is a free-trade zone?
A free-trade zone is a zone that offers duty-free importing and exporting activities as well as making provision for warehousing, distribution facilities, storage facilities, shipments, and re-export operations.
You can also define a free-trade zone as an area of land dedicated to the serious production of goods, which involves the importation of raw products or materials and the exportation of finished products or factory products with minimal involvement of customs and provision for facilities and equipment needed to carry out such operations.
A free-trade zone is also called a foreign-trade zone, with the main purpose of providing an advantage over customs duties. Some people refer to it as a duty-free exporting zone or area. Other synonyms are “industrial free zone,” “exporting free zone,” “production free zone,” “free port zone,” and “special economic zone.”
So regardless of what you call it, just know that it is a zone that makes the expansion of a product possible in a country with near-zero involvement of customs and no duty fee while having access to the needed facilities for the product to be distributed.
How the Lekki Free Trade Zone operates
To effectively manage the Lekki Free Trade Zone, the government created two bodies to oversee two categories of products, which are NEPZA and OGFZA.
NEPZA stands for Nigeria Export Processing Zone Authority. This particular body is in charge of all the export-free zones in Nigeria.
OGFZA, on the other hand, means Oil and Gas Free Zone Authority. Just as the meaning implies, this body is in charge of the oil and gas-free trade zone in Nigeria.
Lekki Free Trade Zone is controlled by NEPZA. Lekki Free Trade Zone is located around Lekki Peninsula and in close proximity to Epe, with the Lekki Lagoon to the north and the Atlantic Ocean to the south.
The Lagos State Government allocated 16,500 hectares of land for the main purpose of developing the Lekki Free Trade Zone. So far, only 3000 to 4000 hectares of land have been allocated to the developers of the region.
Distribution of the Lekki Free Trade Zone
The partners of the Lekki Free Trade Zone are the Chinese Consortium, Rendeavour, Dangote Refinery, and Tolaram. The LFTZ is divided into four quadrants, the first being the southwest quadrant, and is co-owned by China Africa Lekki Investment, the Lagos State Government, and Lekki Worldwide Investment.
The second quadrant is allocated primarily to manage oil and gas production and exportation. This zone is also for petrochemical-related industries. This is the zone where the Dangote refinery is located. The Dangote refinery is owned by the richest man in Africa, Aliko Dangote. The refinery is expected to deliver 650,000 barrels of oil per day.
The third quadrant is a mixed economy called Alaro City, which will include space allocation for homes, schools, entertainment centers, hospitals, health care facilities, offices, businesses, and other major structural buildings needed to sustain the people living in this quadrant. This quadrant is being developed by Rendeavour.
Just like the third quadrant, the fourth quadrant is also a mixed economy and will be the major operation center of the Lekki Free Trade Zone that will oversee the operations of the other zones. This is where the Lekki Deep Sea Port is being developed alongside the proposed Lekki airport.
Other free trade zones in Nigeria
Aside from the Lekki Free Trade Zone being the second largest after the Nigeria International Commerce City (Eko Atlantic) in Nigeria and the fastest-developing in the world, there are other free trade zones that exist in the nation that are either owned by the government or privately owned.
Here is the list of other zones in Nigeria:
- Calarbar free zone
- Kano free zone
- Sebore Farms Export Processing Zone
- Newrest Airline Services and Logistics Free Zone – Abuja
- ALSCON Export Processing Zone
- Snake Island Integrated Free Zone
- Ladol Free Trade Zone
- Lekki Free Trade Zone (Lfzdc)
- Ogun-Guangdong Free Trade Zone
- Nigeria Aviation Handling Company’s (NAHCO) Free Trade Zone
- Nigeria International Commerce City (Eko Atlantic)
- Enugu Industrial Park Free Zone
- Newrest Airline Services and Logistics Free Zone – Lagos
- Quits Aviation Services
- Dangote Industries, Free Zone Development Company
- AHL Energy Free Trade Zone
- Bundu Free Zone
- Celplas Industries Free Zone
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FAQs
Who owns Lekki Free Zone?
The zone is owned by the Lagos state government in partnership with the Chinese Consortium, Rendeavour, Dangote Refinery, and Tolaram.
What is a free zone in Nigeria?
A free-trade zone in Nigeria is an area that allows the operation of industrial activities, which include importation and exportation, without any involvement of customs or the need to pay customs duties.
What is the meaning of the Lekki Free Zone?
The Lekki Free Zone is a zone that makes provision for the operations of product importation and exportation, which include warehousing, storage, and distribution facilities, as well as the removal of customs duties.
When was the Lekki Free Trade Zone created?
The Lekki Free Trade Zone was created in 2006 with a land allocation of 16,500 hectares. The current developments in the zone include Alaro City, Dangote Refinery, the Deep Sea Port, the proposed airport, etc.
