How much does the world really know about Nigeria? The coastal West African nation is the largest oil producer in the continent with a resource-rich economy and a young and vibrant demography.
Nigeria is also the Africa’s largest country by population and by GDP (gross domestic product). Its GDP has been showing a consistent annual growth of 5% over the last two decades. It is also one of the few emerging economies which has witnessed 4x growth in the per capita GDP over the course of the same period.
Unfortunately, Nigeria's economic potential has been constrained by structural issues, including inadequate infrastructure, tariff and non-tariff barriers to trade, and the perceived barriers to foreign direct investment.
The affirmation of the African Continental Free Trade Area (AfCFTA) on New Year's Day 2021 is an ambitious economic union that purports to bring the whole of Africa under a single market ecosystem. Over time, all the 54 countries under the African Union that have ratified the AfCFTA, pledge to eliminate import tariffs on 97% of goods traded between African states. The new AfCFTA era will increase trade between African countries - which will, in turn, boost manufacturing and create jobs, bringing more prosperity and social equality to those on the continent.
It is, therefore, an opportune time for international investors looking for new growth frontiers to re-look at their Africa growth plans in this light. If one looks more closely at the ecosystem of free trade zones (FTZs) operating in Nigeria, Nigeria's free zones offers one of the most stable and attractive regulatory framework for international manufacturers keen on serving African markets.
A wide range of enterprises operate in Nigeria's Free Trade Zones - oil and gas companies, manufacturing industries, car assembling industries, steel rolling mills, pharmaceutical industries, food processing industries, and new upcoming Industrial Parks. Between them, the FTZs have attracted FDI with a combined net worth of over $200 billion from the world’s top multinationals.
The most unique of these free zones, in light of its deep-sea port based location, is Lagos Free Zone(LFZ), an 850-hectare industrial development, located in Lagos, the state that contributes more than 10% of Nigeria’s GDP and is often hailed as the commercial centre of West-Africa.
Promoted by the Singapore-headquartered enterprise, Tolaram - one of Africa's most accomplished industrial conglomerates with more than four decades of experience in Nigeria, Lagos Free Zone (LFZ) is a unique and award-winning free zone with over USD 2 billion committed FDI projects to date. LFZ has a fast-growing tenant base and is already serving global brands like Kellogg’s, Colgate-Palmolive, Arla, BASF, Dufil, Lekki Port among others.
The biggest locational advantage of LFZ is its unique integration with Nigeria’s deepest sea port, the 90-hectare Lekki Port, which is scheduled for commissioning by Q4-22. Therefore, LFZ offers its tenants the most cost-efficient access to domestic, regional, and international markets.
As recently as in October last year, LFZ was honoured with the fDi Highly Commended Award in the Regional (Africa) category of the Global Free Zones of the Year 2021 awards. These awards, which highlighted the best practices of some of the world's most successful free zones, were given by fDi Intelligence, the Financial Times division which monitors foreign direct investment in infrastructure projects throughout the world.
In a nutshell, LFZ is redefining the ease of doing business in Nigeria. Seeing that the world move towards shorter supply chains during the pandemic, the Zone management reprioritised its priority industry sub-sectors, giving greater importance to pharmaceuticals and medical consumables. The Zone today has 23 business entities in operation and has also launched a drive to attract further foreign investment from across the world.
Lagos Free Zone’s vision is to become the preferred industrial and logistics hub in West Africa by offering world-class infrastructure, facilities and services that would encourage ambitious businesses to expand their horizons to reach over 350 million people in the high-growth markets in West Africa.
It has been surmised that, if Nigeria plays its cards right, it could well become Africa's superpower. Through projects like Lagos Free Zone and Lekki Port, Tolaram is playing an active role in supporting the international manufacturers ideally position themselves for this next era of growth in Nigeria.