Transcript OGFZA in Eleme

(Êsôn Eta Eleme)
Nnô B’Eta Eleme
Nnô b’ta Eleme
Nyime Eta r bai
Afiamuru bî nmasên Eleme
Oku nsênwinne
Bârâ oku Ekpo so, soo…
Naî mr dal’Eleme ebo.
Refrain
Dãmô Eleme chuî
Nne mpio, suêi ntito
Chui ajuri ad
Namai ntito Obari
Obari Kanee
Nyime ta Eleme
Afia, mûrû bî
Nmasê Eleme
Obari Kanee
Nyime ta Eleme
Afia, mûrû bî
Nmasê Eleme
A Presentation on
THE IMPACT OF OIL AND GAS
FREE ZONE ON ELEME
COMMUNITY.
Eld. John Abbey (HOD, Marketing & Media)
By
Introduction
 Free Zone Concept
 OGFZA Role and Achievements
 Variation of Free Zone
 Factors Influencing Success or Failure
 Free Zone as a Catalyst for Economic Growth
 Oil and Gas Free Zone as a Panacea for Nigeria
Immediate Problem.
 Vision/The Way Forward
 Conclusion
By definition, Free Zone is described
as a designated enclave or a
geographical territory within a country
which is administratively deemed to be
outside the custom area, within
which national regulations related to
trade, finance and other economic
activities may not be applicable or
partially applicable.
Formation of Oil and Gas Free Zone and
Oil and Gas Free Zone Authority
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Established by Act No. 8 of March 29, 1996,
establishing OGFZ and OGFZA at Onne/Ikpokiri
(Rivers State).
Responsible for all Oil and Gas functions as they
relate to free zone (section 5(2) OGFZA Act).
“The Authority shall have power to take over and perform
such other functions being hitherto performed by NEPZA as
they relate to the export of oil and gas from any of the NEPZA
established Free Trade Zones by the NEPZ Act 1992”
Government Objective for OGFZ
Attracting Foreign Direct Investment (FDI)
 Capital Growth
 Employment Opportunity
 Skill Acquisition
 Revenue Generation
 Increase Export
 Trade Facilitation and Support
 Industry Diversification (Primary Industry, attracts
secondary industries which supports its operations).
 Promote Foreign Exchange Earnings
 Acts as hub for sub-Saharan African Region

Ingredients of the Free Zone
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Incentive
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Use of Area of Comparative Advantage
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Strong Infrastructural Base
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Consistency of Policy/Strong Legal Framework
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Clear and unambiguous Government Intentions.
INCENTIVES
 Tax Breaks.
 100% repatriation of capital investment.
 100% remittance of profits & dividends.
 No import or export licenses required.
 100% of free zone goods can be sold in Nigeria.
 100% foreign ownership of business allowed.
 Duty free stock (equipment, spare parts, pipes).
 Immigration incentives
 75% duty rebate etc.
Use of Area of Comparative Advantage
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A country’s assets best represents their area of comparative advantage.
Most countries globally have capitalised on using their areas of
comparative advantage in setting up zones.
Examples include Nigeria focusing on oil and gas, South Africa, Mauritius
and Kenya with free zones focusing on Textiles – a primary agricultural
product: Kenya additionally has free zones focus on tourism etc.
Several counries including India, Ireland, Malaysia etc have applied the
Free Zone Concept to initiatives that take advantage of an available,
quality labour force.
Setting up any successful free zone initiative is a well thought out and
strategic process stating objectives and plan on how to achieve these
objectives.
 Power
 Telecommunications
 Roads
 Etc.
Consistency of Policy/Strong Legal
Frame Work.
Investor confidence is paramount in the
attraction of FDI, therefore consistency in policy
is important.
 Strong legal framework is a prerequisite for
consistency in policy.
 Therefore the role of legislation can not be
overemphasized.
 Clear and unambiguous government intention.

OGFZA Role
 Free Zone Management role in Free Zone growth
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Promotion/Marketing Investment Drive
Indentifying relevant industries/businesses in line with the Free
Zone objectives.
Opening negotiation in a bid to have them located at specified Free
Zone.
Administration
Ensure Free Zone advantage/priviledges reach each client in the
zone.
Interface between Free Zone clients and other government
agencies
Security
Resolution of disputes
Liaison between investors and community.
ACHIEVEMNTS SO FAR
 OGFZ has placed Nigeria as a leading player in oil and gas
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activities in the whole of sub-Saharan Africa.
From inception to date, the Free Zone has attracted more than
150 companies into Nigeria with investment portfolio of more
than $5billion.
It is on records that investment inflow into the free zones
represents about 60% of total investment into Nigeria within the
last 9 years.
The financial times of London Magazine on FDI regards the
OGFZ Onne as one of the most successful zones in Africa
The OGFZ at Onne has attracted all major oil companies in the
area and are now using the free zone as a hub for their activities
covering the whole Gulf of Guinea up to Angola and Southern
Africa.
ACHIEVEMNTS SO FAR (cont.)
 The attraction of these investment into the country has
created over 30,000 direct or indirect jobs.
 There has been transfer of technology to Nigerians, though
manpower training, particularly due to specialised nature of
their operations. For example Tenaris which is the largest pipe
producing company in the world has trained over seventy
Nigerians overseas on pipe technology and many more
companies do similar.
 The presence of the Free Zones has increased economic
activities in the area as the Onne Port is second highest port in
Nigeria after Apapa.
 As a result of the Free Zone at Onne, there has been an
increase in government revenue earning particularly for
Customs, Port Authority and Federal Inland Revenue Service.
Specific Impacts of the Free Zone on
Eleme Community.
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Employment Generation (both direct and indirect, Skilled and
Unskilled).
Wealth Creation via Contract Services/Supplies
Corporate Social Responsibility of Companies to Host
Community via Provision of Roads, Water, Light and
Environmental Friendly Activities.
Creation of social and economic relationship with nationals of
other Countries of the world in a global village effect.
Although there are no verifiable statistics on employment and
wealth creation but it is an established fact that the creation of
Oil and Gas Free Zone Onne has impacted more positively on
the economy and general life style of not only the people of
Eleme but other surrounding communities in Rivers State in
particular and Nigeria at large.
Variation of Free Zones
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Free Ports.
Special Economic Zones.
Export Processing Zones.
Single Factory Export Processing Zones.
Free Trade Zones.
Specialised Zones.
Government use any of the various schemes listed
above/precisely or mix of them, to attain the
objectives for economic growth and development
(considering the country’s area of comparative advantage).
FACTORS INFLUENCING SUCCESS OR
FAILURE OF FREE TRADE CONCEPT
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Leverage on the comparative advantage a nation
possesses within the global economy when setting
up any free zone initiative.
Policy and legal framework
o
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a strong, sound legal and regulatory frame work is
crucial.
Consistency in policy required for investor confidence
as Free Zone projects are typically long term.
FACTORS INFLUENCING SUCCESS OR
FAILURE OF FREE TRADE CONCEPT (cont)
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Government support for the project.
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Host Community Stability
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Ease of doing business
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Availability of quality infrastructure.
Free Zone as a Catalyst for Economic
Growth and Development
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Investments provide jobs and contribute
significantly to economic growth and
development.
Provides a needed platform for industrialisation
Technology transfer, skill acquisition, capital
growth, use of local raw materials.
Government meeting all your demands for job
opportunities is a myth.
Every Nation need investments to grow and
prosper.
The most developed Nations are always in
competition to ensure inward investment flow.
Nations that have employed Free
Zone Concepts for Economic
Growth
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Republic of Ireland
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Singapore
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Turkey
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UAE (Dubai)
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Malaysia
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China
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India
Republic of Ireland
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Population
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4,460,000
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GDP 2008
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$226 billion
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GDP per capita
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$51,128
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Total Land Area
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27,133 sqkm.
Singapore
Economic Growth
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Population
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4.49 million
(2009 Statistics)
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GDP 2008
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$239 billion
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GDP per capita
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$209,128
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Total Land Area
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2006 $51,226
(Highest in the World)
India:
Economic Growth
 Trillion
dollar economy
 Stable currency – Rupee becoming stronger
 9.4 % GDP growth
 Per capita Income Rs. 29382
 Life expectancy - 65 years
 Foreign exchange reserves – over $ 200 billion
 Literacy rate - > 67%
 25% growth on IT Sector exports
 Potential R & D hub
 Fastest growing outsourcing Industry
Malaysia:
Economic Growth
Independence
Natural resources
rubber, palm oil.
- 1957
– oil, gas, tin, timber,
GDP growth
– 5.8%
Export of manufactured goods
total exports
– 76.7% of
Adopted a New Economic Policy utilizing Free
Zone concept in 1982.
Aspiring to be First World Nation by 2020.
China
Economic Growth
The growth of customs-supervised zones in China is the
significant part of China’s economic development.
 In 2006, the total import & export values accomplished
by free zones, export processing zones and bonded
logistics zones in China amounted to US$205.26 billion,
with per area import & export volumes touched US$2.57
billion. There are 724,800 personnel being employed.
They have grown to be the most active areas in terms of
foreign trade.
 One of the most successful SEZ – Shenzhen of China
(1980s) has developed from a small village into a city
with a population of over 10 million within 20 years.
 GDP annual growth rate exceeding 10%. In 2006, China’s
GDP ranked the fourth in the world, and the import &
export values reaching US$1760 billion, ranking the third
globally.
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United Arab Emirates
(Dubai): Economic Growth
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According to the International Monetary Fund (IMF) and the Bank for
International Settlements:
◦ the UAE economy now ranks the second largest economy in the Arab region,
larger than that of either Egypt or Algeria.
◦ Only the gross domestic product (GDP) of Saudi Arabia outweighs that of the
UAE.
Diversified economy to diminish reliance on oil revenue.
Has developed into region’s Premier International Business Centre.
Serves as the biggest re-exporting exporting centre in the Middle East.
Third largest export & re-export centre after Hong Kong & Singapore.
Three highly successful, specialized Free Zones of international distinction.
Success of Jabel Ali Free Zone (hosts largest man-made port) allowed the city to
replicate its model to develop clusters of new Free Zones.
In more recent years, they have become a major venue for a number of growing,
profitable industries & activities such as meetings, conferences, exhibitions,
tourism, banking, finance, Industrial Consultation, information & communication
technology, light & medium manufacturing.
GDP 2006: USD 46 billion
Economy built on the back of oil & gas but currently oil & gas accounts for less
than 3% of the Emirates revenue.
Increasingly developing as a hub for service industries such as IT & Finance with
the establishment of a new Dubai International Financial Centre (DIFC).
Government has set up industry specific free zones throughout the city including
Electronic Commerce & Media Free Zone Authority which houses IT firms such as
Oracle Corporation, Microsoft, IBM & Media firms such as CNN, Reuters, MBC.
Oil and Gas Free Zones as a Panacea for
Some of Nigeria’s Challenges.
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A visit to Oil and Gas Free Zone in Onne will convince
skeptics that the Free Zone can help resolve some of our
immediate problems.
Over 150 companies currently do business in Free Zone.
Over 30,000 people are employed directly and indirectly by
the activities of these companies.
It is the only Free Zone fully dedicated to oil and gas industry.
Combine the effectiveness of private sector with support of
the Federal Government.
It is designed to maximize the comparative advantage of
Nigeria to attract FDI in the oil and gas sector
It is also a launching pad for growth in other sectors of the
Economy.
Continued
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It is today recognised as key incubator of the Nigerian
content policy.
It is therefore a solution to some of the most pressing
problems of Nigeria today.
As a country of over 150million with institutions
graduating over 200,000 youths annually who are thrown
into job market it is important that measures are taken to
create jobs for these teaming youths.
The Free Zone concept as applied to oil and gas one of
these measures.

Ikpokiri Island as a Giant Industrial City
The State new industrial base.
A one-stop-shop location comprising industrial
and factories, offices, conference location/submit
centres.
Providing linkages from Oil and Gas to other
sectors of industry.
Support the thriving of small and medium sized
enterprises.
Hotel services.
 Residential Facilities
 Sports Centre
 Shopping Malls
 Offshore Banking
THE WAY FORWARD
Ikpokiri Island
THANK YOU FOR YOUR ATTENTION
(Êsôn Eta Eleme)
Nnô b’ta Eleme
Nyime Eta r bai
Afiamuru bî nmasên Eleme
Oku nsênwinne
Bârâ oku Ekpo so, soo…
Naî mr dal’Eleme ebo.
Dãmô Eleme chuî
Nne mpio, suêi ntito
Chui ajuri ad
Namai ntito Obari
Obari Kanee
Nyime ta Eleme
Afia, mûrû bî
Nmasê Eleme
Obari Kanee
Nyime ta Eleme
Afia, mûrû bî
Nmasê Eleme