In a pivotal move to protect Nigeria’s substantial industrial investments, the Oil and Gas Free Zones Authority (OGFZA) has formally requested a critical 10-year tax exemption for operators within its purview. This appeal, made directly to the Federal Government, underscores a high-stakes debate at the intersection of fiscal policy, foreign investment, and long-term economic strategy.
OGFZA Managing Director, Mr. Bamanga Jada, presented the case during a strategic meeting in Rivers State with officials from the Federal Inland Revenue Service (FIRS) and zone licensees. He argued that the proposed grace period is not merely a concession but a necessary “transition period” for businesses to adapt to the evolving tax landscape introduced by the 2025 Finance Act.
The Scale of the Stake
The urgency of the appeal is rooted in the sheer magnitude of the investments at risk. Jada revealed that Nigeria’s Oil and Gas Free Zones have successfully attracted over $24 billion in cumulative investments. This capital supports more than 200 enterprises and is responsible for generating “hundreds of thousands” of direct and indirect jobs. The zones have also become export powerhouses, with shipments under the current administration reaching 496.5 million metric tonnes to global markets including Brazil, the United States, and India.
Beyond the Headline: The Investor Psychology of Long-Term Planning
The core of OGFZA’s argument hinges on a fundamental principle of large-scale industrial investment: certainty. Jada emphasized that investors in these capital-intensive sectors—such as petrochemicals, liquefied natural gas (LNG), and manufacturing—plan their operations and recoup costs over horizons of 10 to 25 years. Their original financial models were built on the specific regulatory and tax frameworks promised under the free zone statutes. A sudden, un-buffered change in the tax regime mid-stream can invalidate these models, erode profitability, and deter future investment. The requested 10-year exemption is framed as a bridge to maintain policy consistency, a non-negotiable element for sustaining confidence under the government’s Renewed Hope Agenda.
The FIRS Perspective: Modernization vs. Protection
Representing the FIRS, Executive Chairman Dr. Zacch Adedeji (through his Special Adviser, Dr. Cletus Adie) offered a complementary but distinct viewpoint. He described the 2025 reforms as a major step to modernize Nigeria’s fiscal framework, prioritizing transparency, accountability, and compliance over simply taxing profits in free zones.
For export processing zones, the FIRS’s stated emphasis is on strengthening compliance mechanisms to ensure these special economic areas contribute effectively to national development. This suggests a nuanced objective: the reforms may aim less at immediately increasing the tax burden on zone operators and more at ensuring proper reporting, preventing revenue leakage, and creating a fairer overall system. The challenge lies in implementing these new compliance structures without disrupting the very incentives that made the zones attractive.
A Unanimous Call from Stakeholders
The meeting concluded with a unified position. All stakeholders present advocated for the exemption of operators in special economic and free zones from the new tax law’s provisions. Their collective goal is to ensure a smooth adjustment period that safeguards existing investments and allows for collaborative fine-tuning of the reforms.
The Broader Implications
This dialogue represents a critical test case for Nigeria’s investment climate. The outcome will signal to the global business community how the country balances urgent revenue needs with the sanctity of long-term investment agreements. Granting the exemption could reinforce Nigeria’s reputation as a partner that honors the foundational terms of major projects. Conversely, a refusal risks chilling investor sentiment not just in oil and gas, but across all sectors reliant on stable, long-term policy frameworks. OGFZA’s reaffirmation of its readiness to collaborate with FIRS points to a path forward where regulatory modernization and investment protection are not mutually exclusive, but jointly pursued.
LCN/BRM
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Edited by Bashir Rabe Mani
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