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Experts Predict Nigeria’s Free Trade Zones Could Generate More Than N11.11tn

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Economic experts are optimistic about the potential of Nigeria’s Free Trade Zones (FTZs) to boost the nation’s economy significantly.

According to recent analysis, these zones could generate more than the N11.11 trillion they have already remitted to the Federation Account as of October 2023.

The Director of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, said the FTZs will help facilitate forex.

“Nigeria’s urgent need for foreign exchange necessitates leveraging our free zones to enhance non-oil export revenue and reduce dependency on crude oil earnings,” Yusuf stated.

He pointed out the success stories of other countries, notably Dubai, which has effectively utilized its free zones to generate foreign exchange and attract significant investments.

“Our free zones must strive to do more, as we are still heavily reliant on oil and gas for our foreign exchange earnings. Increased investment in these areas is crucial,” he added.

Supporting this perspective, the Managing Director of the Nigeria Export Processing Zones Authority (NEPZA), Olufemi Ogunyemi, recently highlighted the economic contributions of the FTZs while addressing the Senate Committee on Industry, Trade, and Investment.

Ogunyemi noted that these zones have created substantial wealth for the states hosting them and generated significant revenue for various agencies.

“Agencies such as the Nigeria Customs Service, the Immigration Services, and the Nigerian Ports Authority have seen revenues of N59.38 billion, N828.7 million, and N8.738 billion, respectively, while states have received N998 million in Pay As You Earn (PAYE) remittances,” Ogunyemi reported.

He also highlighted the broader impact of the FTZs, noting that as of the end of 2023, the 46 licensed zones had provided 38,429 direct jobs and an additional 172,930 indirect jobs.

Foreign direct investment (FDI) worth $491.8 million and local direct investment amounting to N1.15 trillion have flowed into these zones, with N1.62 trillion worth of cargo imported from 2019 to 2023, saving scarce foreign exchange.

David Adonri, Vice President of Highcap Securities Limited, praised NEPZA’s achievements, suggesting that the government use these successes to encourage more Nigerians to start manufacturing businesses within the FTZs.

“The remittances from the free trade zones are commendable and should be a marketing tool to attract more investments,” Adonri said.

However, some experts believe there is room for improvement. Professor Olusegun Ajibola of Babcock University argued that while the remittances are noteworthy, they are not yet at a level worth celebrating.

“The government needs to intensify efforts in revenue generation from these zones as they were established at a significant cost to the host states,” Ajibola remarked.

He called for a review of the 32-year-old NEPZA Act to address any challenges and enhance the performance of the FTZs.

As Nigeria continues to seek ways to diversify its economy and reduce reliance on oil, the FTZs present a promising avenue. With strategic investments and robust management, these zones could indeed surpass their current contributions, fostering economic growth and stability for the nation.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Goya Foods Takes Legal Action to Assert ‘Goya Olive Oil’ Trademark Ownership

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“Goya Olive Oil” trademark in Nigeria, Goya Foods Incorporated has initiated legal proceedings against the Registrar of Trademarks under the Federal Ministry of Trade and Investment.

The case, numbered FHC/ABJ/CS/883/2023, was brought before the Federal High Court in Abuja.

Goya Foods, a prominent producer and distributor of foods and beverages across the United States, Spanish-speaking countries, and Nigeria, seeks to enforce a longstanding consent judgment issued by the court in December 2006.

The judgment directed the Registrar to rectify the Trademarks Register to reflect Goya Foods Incorporated as the rightful owner of the “Goya Olive Oil” trademark, without any further formalities.

The lawsuit, exclusively revealed to sources, underscores Goya Foods’ determination to safeguard its intellectual property against alleged infringements.

According to court documents, Goya Foods obtained the consent judgment against Chikason Industries Limited, which was accused of marketing “Goya Olive Oil” in Nigeria, thus infringing on Goya Foods’ registered trademark.

Legal counsel for Goya Foods, Ade Adedeji, SAN, emphasized the necessity of rectifying the Trademarks Register to protect their trademark interests effectively.

Despite appeals to the Registrar, the requested rectification has not been implemented, prompting Goya Foods to escalate the matter through legal channels.

The case has been adjourned to September 27, 2024, for further proceedings, highlighting the complexity and significance of trademark disputes in the global marketplace.

Goya Foods remains committed to upholding its brand integrity and securing its proprietary interests amidst the evolving landscape of international trademark law.

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IOCs Accused of Blocking Direct Crude Sales to Dangote Refinery

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Dangote Industries Limited (DIL) has accused International Oil Companies (IOCs) of obstructing direct crude oil sales to its refinery and forcing the company to use costly middlemen.

This development comes after a statement by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) suggested a “willing buyer-willing seller” dynamic was in place as mandated by the Petroleum Industry Act (PIA).

Devakumar Edwin, Vice President of DIL, countered NUPRC CEO Gbenga Komolafe’s claims, stating that IOCs consistently make it difficult for local refiners by pushing sales through international trading arms, which inflate prices and bypass Nigerian laws.

“These middlemen earn unjustified margins on crude produced and consumed within Nigeria,” Edwin stated.

He noted that only one local producer, Sapetro, has sold directly to DIL, while others insist on using trading arms abroad.

Edwin detailed the financial impact, citing instances where DIL was charged a $2-$4 premium per barrel above the official price.

In April, DIL paid $96.23 per barrel for Bonga crude, which included significant premiums, compared to a much lower premium for West Texas Intermediate (WTI) crude.

While acknowledging NUPRC’s support in resolving some supply issues, Edwin urged the regulatory body to revisit pricing policies to ensure fair market practices.

“Market liquidity is essential for fair pricing. We hope NUPRC addresses these issues to prevent price gouging,” he stated.

This dispute highlights ongoing challenges in Nigeria’s oil sector, where domestic refiners struggle to secure local crude amidst complex market dynamics.

The outcome of these negotiations could significantly impact the refinery’s operations and broader industry practices.

The situation underscores the need for transparent and efficient crude supply systems to bolster Nigeria’s refining capacity and economic growth.

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Dangote’s $20 Billion Refinery to Begin Petrol Sales Next Month

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Aliko Dangote announced on Monday that his long-awaited $20 billion refinery complex will commence petrol sales starting next month.

The announcement came during a press briefing held at the refinery site in Lagos, where Aliko Dangote, Africa’s richest man, detailed the project’s progress and future plans.

“We are proud to announce that the Dangote Refinery will begin selling petrol from August,” Dangote stated confidently.

“This milestone marks the culmination of years of meticulous planning, construction, and overcoming numerous challenges.”

Dangote’s refinery, touted as the largest single-train refinery in the world, is designed to process 650,000 barrels of crude oil per day once fully operational.

The facility aims to not only meet Nigeria’s domestic demand for refined petroleum products but also contribute significantly to export markets across West Africa.

“We have entered the steady-state production phase earlier this year, and now we are ready to begin commercial sales,” Dangote explained. “Initially, we will focus on petrol production, with plans to expand our product range as we ramp up to full capacity.”

The refinery’s launch is expected to alleviate Nigeria’s longstanding dependence on imported refined products, thereby boosting the country’s energy security and reducing foreign exchange outflows associated with fuel imports.

Beyond petrol sales, Dangote revealed ambitious plans to list both the refinery and its associated fertilizer plant on the Nigerian Exchange Group (NGX) by the first quarter of 2025.

This move aims to attract broader investor participation and unlock additional value for shareholders.

“We are committed to transparency and accountability in our operations,” Dangote emphasized. “Listing these subsidiaries on the NGX will not only strengthen our corporate governance framework but also enhance the refinery’s financial sustainability.”

Challenges and Future Prospects

Despite celebrating the imminent commencement of petrol sales, Dangote acknowledged challenges encountered during the project’s execution, including delays in securing land for a petrochemical facility in Ogun State, which incurred substantial costs.

“We faced bureaucratic hurdles that resulted in significant delays and financial losses,” Dangote lamented. “Nevertheless, we remain steadfast in our commitment to advancing Nigeria’s industrial capabilities and contributing to economic growth.”

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