AN EVALUATION OF THE IMPLEMENTATION OF FREE TRADE ZONE POLICY IN NIGERIA

Abstract

The study evaluated the implementation of free trade zone policy in Nigeria. The policy was introduced to diversify the nation’s economy from oil and provided an enabling environment that is conducive for the growth and development of industries, inflow of investment and expansion of domestic production capacity, promoting rapid industrialisation through administration of fiscal and non-fiscal incentives to increase private sector participation in free zone businesses. The study covered a period of ten years (2012 -2021) and relied on documentary evidence to critically assess free trade zone policy in terms of foreign direct investment and local direct investment in the seven selected operational zones.  The study adopts endogenous growth theory as its framework. Finding from the study shows that free trade zone policy has attracted foreign direct investment and local direct investment in the selected operational zones in terms of investment and trade.  The study concludes that, the implementation of Free trade zones policy in Nigeria have attracted foreign and local direct investment. The policy has contributed to the economic development in the area of rapid industrialization, free zones have provided better opportunities for doing business which provides a mix of fiscal incentives and a one-stop-shop platform that reduces bureaucratic bottlenecks. The study recommended that NEPZA should improve the physical infrastructure within FTZs, including roads, ports, airports, telecommunication and utilities such as electricity and water supply. This will enhance the attractiveness of these zones and make them more competitive in attracting investments. The Authority should identify and develop industry-specific FTZs that cater for particular sectors where Nigeria has a comparative advantage or potential for growth.