By Lucy Ogalue
Abuja, Dec. 16, 2025
In a decisive move to protect Nigeria’s economic growth engines, the Nigeria Economic Zones Association (NEZA) has formally endorsed calls for a substantial 10-year transition period before applying the National Tax Policy to the country’s Free Zones. This position, articulated by NEZA’s Executive Secretary, Mr. Isaac Elegbede, underscores a critical juncture for Nigerian industrial policy, where the balance between revenue generation and investment attraction is being tested.
Elegbede commended the proactive advocacy of the Managing Directors of the Nigeria Export Processing Zones Authority (NEPZA) and the Oil and Gas Free Zones Authority (OGFZA), who have championed the moratorium. He described their stance as “timely and strategic,” serving as a necessary buffer against a policy shift that could destabilize a key pillar of Nigeria’s foreign direct investment (FDI) strategy.
The Core Argument: Why a Decade-Long Transition is Essential
NEZA’s warning against an abrupt rollout is not merely procedural; it strikes at the heart of investor psychology. Free Zones globally compete on the basis of regulatory stability and fiscal predictability. An immediate imposition of new tax rules, Elegbede argues, would be perceived as a retroactive change to the investment contract, severely undermining the confidence of both existing operators and prospective entrants. This aligns with concerns NEZA first raised in a September press release, highlighting a consistent fear of capital flight and a chilling effect on new investments.
The proposed 10-year window is framed as a period for deliberate and constructive policy evolution. It would allow for:
- Policy Harmonisation: Reconciling the objectives of the National Tax Policy with the foundational incentives that made Free Zones successful. This requires deep analysis to avoid unintended consequences.
- Sustained Investor Engagement: Moving from announcement to dialogue. A transition allows for structured consultations with businesses to design a framework that is both fair and competitive.
- Regulatory Clarity: Drafting precise legislation and guidelines to eliminate ambiguity, which is often more damaging to business than the tax rate itself.
- Development of a New Incentives Framework: Crafting a modern, targeted suite of incentives that can replace blanket tax holidays, ensuring Nigeria remains attractive in a global race for industrial investment.
The Bigger Picture: Free Zones as Catalysts, Not Tax Havens
This debate transcends tax collection. Nigeria’s Free Zones are designed to be integrated economic catalysts. They generate employment, foster technology transfer, develop infrastructure, and create robust export supply chains. The primary value of a zone is not the foregone tax revenue during its growth phase, but the broader economic activity and diversification it stimulates. A poorly managed transition risks sacrificing these long-term strategic gains for short-term fiscal fixes.
Elegbede urged NEPZA and OGFZA to continue their collaborative advocacy, emphasizing that “stability and predictability were critical to its long-term success.” He reaffirmed NEZA’s readiness to work with government authorities to ensure that tax reforms ultimately “strengthen, rather than weaken the competitiveness and sustainability of Nigeria’s Free Zones.”
The outcome of this advocacy will signal Nigeria’s broader commitment to a rules-based, predictable business environment. It presents an opportunity to demonstrate that policy evolution can be managed thoughtfully, protecting existing investments while designing a sustainable future model.
(NAN) (www.nannews.ng)
LCN/BRM
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Edited by Bashir Rabe Mani
