Agro Exports

LEVERAGING FREE TRADE ZONES TO SHORE UP FOOD SECURITY

The world over, countries are establishing free trade zones to facilitate growth through high-end manufacturing and processing. For experts, free trade zones can play a role in transforming food systems by providing an environment for producers to develop innovative products and services that are vital to addressing food security, writes.

Globally, countries are ramping up efforts to increase investment and incentivising activities in a range of industries by establishing free trade zones.

Incentives include supporting foreign companies looking to relocate with about 100 per cent ownership of their companies, flexible foreign workforce and visa processes, customs duty exemption on imports and corporate tax holidays for investors.

One area countries are trying to attract investors to is agriculture. Several special economic zones have been created to enable farmers and businesses to tap into the vast agro resources available within their countries.

At present, Nigeria has  special economic areas under industrial  and innovation zones that allow residents to take advantage of certain free trade benefits. The special economic zones provide tax preferences, reduced administrative barriers for commerce, as well as other incentives for trade and investment.

Stakeholders are canvassing special economic zones to promote agriculture and food production.

One of them is Chief Executive Officer Multimix Group, Dr. Obiora Madu.

Madu  said well-conceived special economic zones connect farms to warehouses to transportation to consumers. This, he explained, increases the concentration of food production and distribution.

He said such facilities showed models of an integrated economic development which comprises industrial areas, logistics services and processing plants.

He  said for Nigeria to strengthen its agricultural sector, the government must ensure the country became largely self-sufficient in food production. According to him, developing free trade zones is a significant and positive development for the agricultural sector’s strategic calculations.

To achieve economic growth, he said, the government has to work with the private sector to replace traditional farming with large-scale agro-industrial zones for food processing plants.

According to him, free trade zones are undoubtedly huge employment generators.

Recently, the Managing Director of the Nigeria Export Processing Zones Authority (NEPZA), Prof. Adesoji Adesugba, appealed to the Organised Private Sector (OPS) to patronise free trade zones to ward off widespread business uncertainty brought about by COVID-19 pandemic.

Adesugba argued that Nigeria’s industrialisation could be achieved faster if the government and the private sector worked together.

He made the call in Abuja when he visited the President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Saratu Aliyu, which was also attended by the Second Deputy President, NACCIMA, Dele Oye; and President, Abuja Chamber of Commerce and Industry (ACCI), Adetokunbo Kayode.

Adesugba, a former national legal adviser to NACCIMA, said: “NEPZA holds a double status as a facilitator and promoter of investments, free business environment, and a regulator that ensures compliance to standards’’.

He, therefore, urged the business community to consider patronising the 42 free trade zones to reduce the negative impact of the pandemic on their businesses.

“The supply chain management is going to be critical, as COVID-19 has changed business logistics, but if we can take advantage of the various incentives, which include tax holiday, absence of customs duty, and absence of several other multiple taxes charged outside of the zones then our businesses can stay afloat,” Adesugba said.

In line with this, the Federal Ministry of Agriculture and Rural Development (FMARD) recently announced plans to establish a network of special crop processing zones (SCPZs), with the aim of attracting private agricultural investment for processing plants.

They will be located within designated high-production areas  around the country. The government offered incentives, including tax breaks for imports of agricultural processing equipment, tax holidays for food processors in an SCPZ, and government-funded infrastructure such as quality roads, logistics, storage facilities, utilities, flood control, rail and air connectivity.

Under the ministry’s plan, each zone will link farmers to food manufacturing plants, with public funding anticipated at the state and federal levels. Some 14 SCPZs will be developed in phases, with the first phase covering six zones.

Experts said the project could boost agriculture and drive national industrialisation, modernisation They noted that the government  efforts would help to  ensure national food security and boost rural development.

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