The Manufacturers Association of Nigeria (MAN) has called on the Federal Government to investigate the activities of certain Free Trade Zone (FTZ) operators across the country, alleging that some engage in practices that harm local manufacturers and undermine the Nigerian economy.

Prince Lekan Adewoye, Chairman of MAN’s Basic Metals, Iron, and Steel Manufacturers Group, highlighted that while the metals and steel sector has contributed significantly to economic diversification, import substitution, and MSME development under President Bola Tinubu’s administration, it continues to face daunting challenges, including high borrowing costs, energy expenses, smuggling, substandard products, inconsistent policy, and infrastructural deficits.

“While some operators within the FTZs are genuine, the majority have abused the system, destroying businesses of manufacturers operating in the customs territory,” Adewoye said.

He alleged that certain FTZ operators exploit loopholes to import finished or semi-finished goods under the guise of raw materials, selling them locally at unfairly low prices, undermining genuine domestic manufacturers. He cited a case in the Calabar FTZ, where a foreign company imported 6,000 metric tons of wire coil at a declared value of $67,000 ($11 per metric ton), compared to a global market price of $500 per metric ton.

Adewoye stressed that FTZ operators already enjoy zero import duty on inputs, while local manufacturers in the customs territory pay up to 25% duty, creating a severe competitive imbalance.

He called for:

• A comprehensive audit of FTZ operations in the metals and steel sector over the past 10 years
• Recovery of lost government revenue
• Prosecution of offenders engaged in under-invoicing or import diversion

Additionally, he proposed the establishment of a special task force including representatives from MAN, Customs, NEPZA, and the Ministry of Industry, Trade and Investment, to monitor FTZ operations and restore fairness in the sector.

Reacting to the concerns, Toyin Elegbede, Executive Secretary of the Nigeria Economic Zones Association (NEZA), assured that the association does not condone sabotage by member organizations and is committed to achieving FTZ objectives.

Enebi Onucheyo, Director of Product Certification at the Standards Organisation of Nigeria (SON), confirmed the rollout of the Special Economic Zones Conformity Assessment Programme (SEZCAP) since 2024. The initiative ensures that goods entering or leaving FTZs meet quality and safety standards before reaching the customs territory or international markets.

“SEZCAP is implemented through SON State Offices having jurisdiction over FTZs across the country, enhancing the quality, safety, and competitiveness of manufactured products,” Onucheyo stated.

MAN’s call for a probe underscores growing concerns that unregulated FTZ operations could erode the gains of local manufacturers unless stringent oversight, auditing, and regulatory enforcement are applied.