Resolving OGFZA, Operators Impasse

For some time now, the media has been awash with reports of a seeming imbroglio between the Oil and Gas Free Zone Authority (OGFZA) and some companies operating in the Onne Oil and Gas Free Trade Zone (Onne FTZ) in Rivers State.
According to some of these reports, about 16 firms operating in the Onne FTZ had already indicated their intentions to exit the zone if nothing is done urgently to check what they consider as unnecessary politicisation of the free zone’s operation. In fact, they are said to be particularly peeved by the suspected political vendetta against one of the major licensed players in the zone, Intels Nigeria Limited, by OGFZA and another government agency.
Established by Section 2 of the Oil and Gas Export Free Zone Act No. 8 of 1996, OGFZA has the mandate to regulate the operation of oil and gas free trade zones in Nigeria. The first of such zones to be set up anywhere in the country was the Onne FTZ in 2001. Its concept, as obtains elsewhere across the world, is essentially to attract foreign direct investments, create employments and aid technology transfer to the indigenous workers. Such free trade zones were said to have played a key role in building the robust economies being witnessed by the Asian Tigers.
In order to attract and retain free zone investors, the Federal Government had rolled out some incentives to companies operating in the free zones; these include unhindered repatriation of capital investment, remittance of profits and dividends, special immigration quota regime, exemption from Customs duties, indefinite cargo storage, tax exemptions, rebates and other waivers.
From serving as a base for operators providing logistics support to the international oil and gas companies (IOCs), the Onne FTZ has since grown to accommodate fabrication firms, shipyards, pipe-coating enterprises, and petrochemical and fertilizer plants.
The OGFZA, under its present management, was said to have applied these incentives in the breach. What’s more, some stakeholders had even accused the authority of selective imposition of extraneous levies, including land charges at the Onne and Warri Free Trade Zones.
At the peak of its operation a few years ago, the Onne FTZ was said to have attracted over $20 billion investment from inception with about 200 firms and 24,000 employees operating in the zone. These figures have now been seriously decimated by the current economic meltdown in the country occasioned mainly by a free fall in the global crude oil and gas prices.
The Tide urges the Federal Government to quickly call the OGFZA to order as not to sabotage the good intentions of setting up the authority. The issues raised by the concerned parties should be handled with seriousness with a view to ensuring an amicable resolution of the present impasse. We say so because any failure to check the deteriorating business climate in Onne FTZ could have a spiraling negative effect on the nation’s economy and consequently torpedo government’s drive to attract more foreign direct investments to the country. The government cannot be wooing investors on the one hand while some of its agencies are busy scaring them way.
We charge the Ministers of Transportation; Industry, Trade and Investment; and Interior to quickly intervene to resolve any disagreements between the authority and operators of the free trade zone.
We also urge the National Assembly (NASS) committees with oversight powers on the OGFZA to join in a concerted effort to restore investors’ confidence in the economy and ensure that more foreign investors not only come to invest, but also create more jobs for the teeming unemployed youth, especially those from the oil-rich Niger Delta.