How Ogun-Guangdong Free Trade Zone can attract FDI By Dirisu Yakubu

Sat Jul 13th, 2019 - Ogun

Nigeria’s efforts at growing the economy through export manufacturing by adopting the Chinese Free Trade Zone model is yielding tremendous result. If well harnessed, free trade zones could become a means of attracting the much craved Foreign Direct Investment, FDI into the country and also a means of boosting the revenue base of the nation.


The core objective of free trade zone worldwide generally is to stimulate economic growth through its unique platforms designed to attract foreign direct investors, generate employment opportunities and build human capacity for the optimum benefit of the host country.

Given the vision of the President Muhammadu Buhari-led government to draw attention to diversifying the productive base of the Nigeria economy through the promotion of non-oil exports, free trade zones in Nigeria can play a huge role in actualizing this dream.

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Statistics obtained from the Nigeria Export Processing Zones Authority, NEPZA, show that there are over 32 registered free zones in the country out of which 14 are operational while 18 are still under construction. Another eight are awaiting approval.

Among those fully operational, the Ogun-Guangdong Free Trade Zone, OGFTZ, located in the Igbesa, Ota Local Government Area of Ogun State stands out as one of the most successful in the land.

The OGFTZ, a joint venture between a Chinese consortium consisting of Guangdong Xinguang International Group, China-Africa Investment Ltd and the Ogun state government, came into being in 2008.

The success story of the zone has resulted in the completion of phase one of its projections and the establishment of over 30 zones which are fully operational, manufacturing diverse products for export and the domestic market after meeting relevant customs requirements. The activities of the zone has opened up economic opportunities in Ogun state especially settlements in its immediate area of operations, creating employment opportunities and boosting industrialization as a result.

The OGFTZ is reputed to have developed significant infrastructure within its premises such as independent power plant which makes it self-sufficient in its own power needs. With plans in top gear to bring in more investors to the zone, its management recently announced plans to double the existing 5 megawatts gas fired plant.

The OGFTZ was established as an implementation vehicle of China-Africa Summit Forum of 2006 which took place in Beijing. It was designed as part of the eight foreign cooperation zones of China in Nigeria aimed at promoting trade cooperation and strengthening the bilateral relations between Nigeria and China and to assist in the nation’s industrialization drive by harnessing the country’s huge human and natural resources.

Interestingly, OGFTZ has in a short space of time fulfilled all its projections and has become a reference on how a FTZ should be managed in providing a conducive environment for industries to thrive despite the nation’s development challenges.

According to Daniel Che, Deputy general manager of China-Africa Investment, in a recent chat with newsmen was upbeat about the future prospect of the zone if existing policy frameworks are improved upon and if government at both the state and federal levels pay more attention to some of the challenges being faced by the zones

“If only the government at both state and federal levels can pay a bit more attention to policy issues and carefully listen and implement some of our suggestions, I can assure you that the free trade zone model can catapult the industrial revolution of this country. It happened in China and it can be replicated here,” he stated.

He equally noted that a developing country like Nigeria needs jobs opportunities which only manufacturing plants can provide, saying, “OGFTZ alone provides employment to over 6,000 Nigerians. I am talking about direct employment here. You can begin to imagine the indirect employments we have been able to generate, including our long list of local suppliers of locally sourced raw materials that feeds the industries in the zone.

“There are about 30 companies that have set up in the zone and many more are in the offing and we continue to receive interest from our home country, China. When these companies set up here, they will contribute to the industrialization of the country. You can say that industrialization is one way the zone is helping the country to grow and make rapid steps towards development. We are committed to the industrialization of Nigeria. Already, the value of investment in OGFTZ is over $2 billion and I can assure Nigerians that this investment will double in no distant time. We have our plans to fully make use of the 2000 hectares site declared as a FTZ by the federal government.”

Che also noted that OGFTZ is contributing to the growth of Nigeria through revenue generation, stating that when goods manufacture within the Zone are slated for exports, appropriate duties are levied by the Nigerian Customs.

He also lauded the Zone in the area of skills acquisition, saying, “Transfer of technical and technological know-how is also a major benefit accruing to the country. With the number of local workers we have in the zone, we are already training a pool of workers who will tomorrow train others on technical knowledge that would make Nigeria self-sufficient in skills required in a modern economy and reduce the number of foreign experts coming into the country to take up employment.”

Saturday Vanguard gathered that some global brands are already operating within the zone, particularly Goodwill Ceramic, Hewang Packaging, Pannda Industry, China Glass and a host of others.

Goodwill Ceramic for instance, established its production facilities in the zone in 2011 and has contributed significantly in making Nigeria self-sufficient in its need for ceramic wares especially floor and wall tiles of all kinds. The company, according to findings, has invested over a USD 100 million in the Zone.

In the views of Mr. Chi “Goodwill Ceramics is unarguably the biggest ceramic products manufacturer in West Africa”.

Another prominent company operating in the Zone is Hewang Packaging and Printing company. The company opened in the zone in 2010 with an investment of over USD 50 million. The company specialises in the production of packaging materials especially carton and currently has a daily production of 600,000 pieces of carton and other packaging materials and.

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Pannda Industry is another company which was founded in 2015 and focuses on the manufacturing and marketing of all sorts of iron and steel products. Currently, the main production include steel strip coil, galvanized pipes and different sizes of custom made C-type steel which is meeting local demands and the export market.

There is also China Glass Nigeria which is also a multi-million dollar glass company. The parent company is one of the biggest in the world. The company has so far invested over USD 100 million in the zone and is set to meet the country’s need for all types of flat glass for the building industry and for other industrial and domestic use.

According to Daniel Chi, “What Nigerians should take cognizance of is the fact that these industries are sourcing most of their raw materials from Nigeria and like I said earlier this has galvanized the local economy because we now have a lot of local suppliers who are meeting the raw materials needs of these industries.”

Speaking on why Nigeria should pay more attention to the Free Trade Zone model, Che observed that starting from the 1980s and with the establishment of special economic zones (SEZ) in the south eastern coastal region of China, more than a hundred zones of various kinds have since been established throughout China, which he noted are largely responsible for the remarkable growth of China over the years.

“As a result of this successful Chinese model, there has been strong interest by many countries to emulate the model by adopting the Free Trade Zone as an economic policy.

“Free Trade Zone focuses on trade liberalization and export-led growth, attracting foreign investments and enhancing the competitiveness of the manufacturing sector to create employments, technological transfer and human capacity development among others, it is a win-win for both the Zone and the host country”.




source: Vanguard