Digital Free Zones promote innovation and economic growth by utilizing advanced digital technologies like AI and Edge Computing, coupled with a favorable regulatory framework.
To enhance the business environment for global digital, finance, knowledge, and services-oriented enterprises in Nigeria, the Federal Government has established a steering committee under the leadership of President Bola Ahmed Tinubu GCFR. This committee is tasked with promoting and establishing a digital free zone in Nigeria, tailored to meet the unique requirements of innovative digital trade and service enterprises.
The committee is chaired by His Excellency the President, with the Honourable Minister of Finance and the Coordinating Minister of the Economy serving as Vice Chairman. Additional members include the Honourable Attorney General of the Federation and Minister of Justice, the Honourable Ministers of Industry, Trade and Investment, Communications, Innovation and Digital Economy, and Interior, as well as heads of pertinent Government Agencies and Committees.
The Initiative for the Promotion of Digital Free Zones in Nigeria (DiFZIN) represents private-sector stakeholders and serves as technical advisers. DiFZIN is a non-profit organization dedicated to advocacy and policy research, supported by a consortium of institutions focused on private sector development, including Africa Finance Corporation, PwC Nigeria, Charter Cities Institute, Future Africa, and Itana. The organization aims to ensure that Nigeria’s free zones ecosystem reaches its full potential as a leading hub for global technology and service enterprises in Africa.
This Committee will engage in collaborative efforts with pertinent government agencies and private stakeholders to assess and harmonize Nigeria’s free zone policies, technologies, and processes with international standards. Subsequently, it will formulate and disseminate policy and operational frameworks that will facilitate both global and local technology and service enterprises in establishing Pan-African or global operations from Nigeria.
Enterprises that leverage the advantages of the free zone will enjoy competitive business incentives offered by updated free zone regulations, which include tax benefits, immigration and banking incentives, streamlined government compliance procedures, transparent and predictable business regulations, and a supportive business environment.
In alignment with the Federal Government’s strategic growth objectives, the initiative seeks to enhance foreign direct investment, generate employment opportunities, and promote capital inflow into Nigeria’s economy through an innovative and forward-thinking approach to the free zones ecosystem.
The HMF/CME emphasized that “the crucial role of free zones in catalyzing and sustaining economic growth in an emerging market like Nigeria is of utmost importance. In this digital era, their implementation must extend beyond manufacturing activities to include the essential contribution of technology-driven businesses in attracting investments and showcasing our domestic talents to global markets under a flexible regulatory framework. These objectives and more are what the Government intends to achieve through the digital free zones.”
Dr. Olufemi Ogunyemi, the Managing Director and Chief Executive Officer of the Nigeria Export Processing Zones Authority (NEPZA), underscored the Authority's dedication to embracing digital transformation. He pointed out the significance of the e-NEPZA platform, which is designed to enhance government services and align with the Federal Government's policy aimed at improving the ease of doing business.
Dr. Ogunyemi further emphasized the critical nature of data privacy, ensuring that information is stored on local servers, while also facilitating small businesses' access to international markets. He addressed the necessity for robust digital infrastructure, such as fiber optics. "We anticipate collaborating with DiFZIN to enhance our digital initiatives," he remarked. NEPZA's endorsement of Digital Free Zones represents a strategic shift towards a digitally-oriented economy, creating new prospects for both small and medium-sized enterprises and larger corporations in Nigeria.
Mr. Luqman Edu, the Executive Director of DiFZIN and CEO of Itana, along with the DiFZIN consortium, is focused on assisting the Federal Government in establishing Nigeria as a central hub for regional growth throughout Africa. These initiatives are intended to bolster Nigeria's GDP, increase government revenue, enhance capital importation, and improve foreign exchange availability, all while generating employment opportunities for the rapidly growing youth demographic in Nigeria.
“DiFZIN is committed to driving the agenda for reforms to the regulatory frameworks for taxation, banking, immigration, and ease of doing business, among others, within the free zones ecosystem,” said Mr Edu. “Our goal is to create a conducive environment for global technology and services-based businesses to thrive, facilitating remote operations and banking from Nigeria for Africa, thereby positioning Nigeria as a hub for Africa, akin to what Delaware is for the US, and Dubai is for Asia.”
Regarding the collaboration with DiFZIN, Banji Fehintola, AFC's Head of Financial Services, stated: “AFC’s advisory team is uniquely skilled in providing tailored financial and technical advice to public and private sector players across Africa. We look forward to collaborating with DiFZIN and all other partners to modernize Nigeria’s free trade zones, attract much-needed investment, create local jobs, and boost trade and commerce in Nigeria and Africa.”
Digital Free Zones foster innovation and economic prosperity by leveraging cutting-edge digital technologies, such as artificial intelligence and edge computing, coupled with a conducive regulatory framework. These environments serve as catalysts for creativity, providing businesses with a solid platform to accelerate their growth and gain a competitive advantage. Moreover, the supportive regulatory landscape encourages experimentation, collaboration, and the seamless integration of emerging technologies into standard business operations.