How FG can leverage benefits of Free Trade Zones at Airports–Expert



Posted by Sade Williams


The decision by the Federal Government to designate five international airports , namely: Murtala Muhammed International Airport Lagos, Nnamdi Azikiwe International Airport Abuja, Aminu Kano International Airport Kano, Akanu Ibiam International Airport Enugu and Portharcourt International Airport Omagwa for Free Trade Zones (FTZ), has been described as a laudable idea by aviation analysts.

This according to them, shows that the government realises  that the FTZs are veritable  platforms to attract investments and grow economies, adding that though, there is need to maximise such benefits.

The Minister of Aviation, Senator Hadi Sirka, who made the announcement said it was a deliberate plan to support the implementation of both the African Continental Free Trade Area (AfCFTA) and the Single African Air Transport Market (SAATM) agreements.

A former General Manager, Business Development, Federal Airports Authority of Nigeria (FAAN) and now Managing Partner, TMSS Logistics, Nuhu Adam, who spoke with The Travelport on the development said it was not only a welcome development but a commendable bold move by the government.

According to him, the Nigeria aviation logistics hub is about to experience a game changer if the Free Trade zone is well coordinated and implemented and private sector driven.

He said the free trade zone would offer a huge potential for continental aviation given the potentials of Nigeria dominant market in the West and Central Africa.

Aside the increase in the dynamics of economic activities, Adam said it will also encourage the advancement of Foreign Direct Investments (FDI) in aviation value chain – Original Equipment Manufacturers (OEM) supply chain, Fixed-base operator (FBO), capacity building and generation of new entrepreneurial opportunities in e – commerce fulfilment, adding that this is in addition to the likely changes in the real estate market in the airport and its environs among other services.

While citing further advantages, he said, ‘Of the five airports, Port – Harcourt airport has the advantage of a complimentary existing Onne Oil and Gas Free Zone. The logistics hub of this zone should take advantage and set the ball rolling immediately to sustain the gains for Oil and Gas cargo, while building capacity at the airport for agro allied export and others using the aviation logistics hub.

According to him, benefits accruable to a company operating within a Free Zone cannot be overemphasised.

“No pre-shipment inspection and issuance of Bank Form M required prior to shipment of material from the country of origin. Customers with Bank Bonds executed with the Customs can take their goods into the Nigerian territory after examination and within a very short time.

“While importing cargo the traditional way, you’re subject to clear your material and equipment and pay Customs Duty within 30 days. In the Free zone you are enjoying unlimited time to custom clear your consignment.”, he said.

Apart from the fact that it makes for increased shipments and cargo movements, Adam said there is ‘better cash flow management – Customs Duty Scheduling System. With a Bank Bond/Guarantee in place, you will be able to obtain Customs release of cargo required in the Customs territory. Payment of duty/perfection of Customs entries is then scheduled to be  completed within 14 days after delivery – thus deferring Customs Duty payment and obtaining a better cash flow’.

Adam noted further that ‘this further translates into increased revenue and earnings in the associated private sector (airlines, clearing/forwarding agencies, banking/finance, services and supplies), increased government revenue and earnings (for Nigerian Customs, Nigerian Civil Aviation Authority, Federal Airports Authority of Nigeria, Cargo Handling Companies, Federal Inland Revenue Service, among others) apart from creation of job opportunities and entrepreneurial development of budding investors.

“Technology transfer and enhancement of local content participation in the nation’s Aviation industry, no VAT and withholding tax chargeable on Free Zone storage facilities, services and activities, no corporate and personal income tax payable.

He added that there will be easy facilitation of expatriate employees working in the Free Zone as no expatriate quota and residence permit are required for the expatriate staff working and domiciled within the area delineated as the Free Zone territory.

“More importantly for me, aside the cargo volumes increase is a Maintenance, Repair and Overhaul (MRO) being championed within a Free Zone to turn Nigeria into the Hub for maintenance, repairs and overhaul of Aircraft in West and Central Africa, while also attracting business from the rest of the aviation and aerospace world will be a catalyst for the new phase of aviation in the region.

“The MROs in FTZ will result in cost savings to Airlines based in Nigeria and reduce the demand for foreign currency required for Aircraft maintenance.”, he added.


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