Volume 03 Issue 09-2023
6
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
ISSUE
09
P
AGES
:
6-10
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
ABSTRACT
This research paper conducts a comprehensive strategic evaluation of Free Trade Zones (FTZs) in Nigeria, with a critical
examination of both their successes and challenges. FTZs have emerged as a pivotal component of Nigeria's economic
development strategy, attracting investments, fostering trade, and creating employment opportunities. However,
this study delves into the multifaceted factors that have contributed to both the achievements and setbacks of these
zones. By analyzing the strategic implications, policy dynamics, and economic outcomes, this paper aims to provide
valuable insights into Nigeria's FTZ experience and its broader implications for economic growth and development.
KEYWORDS
Free Trade Zones (FTZs), Nigeria, Strategic Evaluation, Economic Development, Investment, Trade, Employment
Opportunities.
INTRODUCTION
Free Trade Zones (FTZs) have emerged as vital
instruments in the global economic landscape,
fostering international trade, attracting investments,
and promoting economic growth. In Nigeria, these
zones have been strategically positioned as key drivers
of economic development, playing a pivotal role in the
Research Article
FREE TRADE ZONES IN NIGERIA: A STRATEGIC EVALUATION OF SUCCESS
AND CHALLENGES
Submission Date:
Aug 27, 2023,
Accepted Date:
Sep 01, 2023,
Published Date:
Sep 06, 2023
Crossref doi:
https://doi.org/10.37547/ijmef/Volume03Issue09-02
Ikenna Betty Ukemenam
Department of Banking and Finance, University of Nigeria, Enugu Campus, Nigeria
Journal
Website:
https://theusajournals.
com/index.php/ijmef
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Volume 03 Issue 09-2023
7
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
ISSUE
09
P
AGES
:
6-10
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
government's efforts to diversify the economy and
reduce dependence on oil revenue. While FTZs in
Nigeria have witnessed notable successes, they have
also faced substantial challenges. This paper embarks
on a comprehensive journey to strategically evaluate
the experiences of FTZs in Nigeria, shedding light on
both their successes and setbacks.
Nigeria, as the most populous country in Africa and one
of the largest economies on the continent, has
recognized the potential of FTZs in boosting
industrialization, trade competitiveness, and job
creation. FTZs encompass various types, including
Export Processing Zones (EPZs) and Special Economic
Zones (SEZs), each with distinct objectives and policy
frameworks. These zones have attracted investments
from diverse sectors, including manufacturing,
logistics, and technology, with the promise of offering
investors a conducive business environment.
However, the road to success for FTZs in Nigeria has
been intertwined with numerous challenges. These
challenges range from infrastructure deficits and
bureaucratic bottlenecks to policy inconsistencies and
security concerns. Understanding the dynamics of
these challenges and successes is essential to
formulating informed policies and strategies that can
optimize the potential of FTZs in Nigeria.
This research paper embarks on a strategic evaluation,
scrutinizing the multifaceted factors contributing to
the achievements and setbacks of FTZs in Nigeria. By
conducting an in-depth analysis of their strategic
implications,
policy
dynamics,
and
economic
outcomes, this study aims to provide valuable insights
into the Nigerian FTZ experience and its broader
implications for economic growth and development. In
doing so, we hope to offer a comprehensive
understanding of the intricate journey of FTZs in
Nigeria, offering policymakers, investors, and
stakeholders a roadmap for further enhancing their
contribution to Nigeria's economic advancement.
METHOD
The strategic evaluation of Free Trade Zones (FTZs) in
Nigeria, including an assessment of their successes and
challenges,
requires
a
multidimensional
and
comprehensive research approach. This method
encompasses both qualitative and quantitative data
collection and analysis, as well as an examination of
policy frameworks and stakeholder perspectives.
Below are the key components of the research
method:
Literature Review:
Conduct an extensive review of existing literature on
FTZs in Nigeria, global FTZ best practices, economic
development, and industrialization. This will provide a
theoretical foundation and identify gaps in knowledge.
Data Collection:
Gather quantitative data from various sources,
including government reports, FTZ management
authorities, and relevant economic indicators. This
Volume 03 Issue 09-2023
8
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
ISSUE
09
P
AGES
:
6-10
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
data should encompass metrics such as investment
inflow, job creation, export volumes, and economic
growth within FTZs.
Qualitative Data:
Conduct in-depth interviews and surveys with key
stakeholders, including government officials, FTZ
management authorities, investors, and industry
experts. Qualitative data will provide insights into
policy dynamics, operational challenges, and strategic
successes.
Policy Analysis:
Analyze the policy frameworks governing FTZs in
Nigeria, examining the legal and regulatory
environment, incentives offered to investors, and
government support mechanisms. This analysis will
identify the strengths and weaknesses of current
policies.
Case Studies:
Select representative FTZs in Nigeria for in-depth case
studies. These case studies
will involve a
comprehensive analysis of the zones' establishment,
investment profiles, operational challenges, and
economic impact.
Comparative Analysis:
Compare the performance of Nigerian FTZs with
successful FTZ models from other countries. This
comparative analysis will highlight areas where Nigeria
can learn from international best practices.
Data Analysis:
Employ statistical tools and econometric analysis to
evaluate the quantitative data collected, examining
the relationships between FTZ performance indicators
and various factors such as policy, infrastructure, and
sectoral composition.
Thematic Analysis:
Apply qualitative data analysis techniques such as
thematic coding to categorize and analyze the
qualitative data obtained from interviews and surveys.
This will help identify recurring themes and key issues.
Stakeholder Workshops:
Organize stakeholder workshops to validate research
findings, gather additional insights, and engage in
collaborative problem-solving with policymakers,
investors, and other stakeholders.
Implications and Recommendations:
Based on the findings, draw conclusions regarding the
successes and challenges of FTZs in Nigeria. Formulate
practical
recommendations
for
policymakers,
investors, and FTZ management authorities to enhance
the role and impact of FTZs in the country's economic
development.
By employing this comprehensive research method,
the study aims to provide a holistic and evidence-based
assessment of the strategic dynamics surrounding
FTZs in Nigeria, offering insights that can guide future
policies and strategies.
RESULTS
Volume 03 Issue 09-2023
9
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
ISSUE
09
P
AGES
:
6-10
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
The strategic evaluation of Free Trade Zones (FTZs) in
Nigeria has yielded valuable insights into their
successes and challenges:
Successes:
Economic Growth: FTZs have contributed to economic
growth by attracting foreign direct investment (FDI),
fostering
industrialization,
and
generating
employment opportunities.
Export Promotion: FTZs have facilitated exports,
particularly in sectors such as manufacturing and
agriculture, thus improving Nigeria's trade balance.
Infrastructure Development: In some cases, FTZs have
seen investments in infrastructure development,
including roads, utilities, and logistics, which benefit
the broader region.
Challenges:
Infrastructure Deficits: Many FTZs still face challenges
related to inadequate infrastructure, including
transportation, energy, and utilities, which hamper
operational efficiency.
Policy Inconsistencies: Inconsistent policies and
regulatory bottlenecks have hindered the growth and
operation of some FTZs, leading to uncertainties for
investors.
Security Concerns: Security issues, especially in certain
regions, have raised concerns for investors and
negatively impacted FTZ operations.
Bureaucracy: Cumbersome bureaucratic processes and
red tape have slowed down investment approvals and
hindered the ease of doing business in FTZs.
DISCUSSION
The successes of FTZs in Nigeria underscore their
potential as engines of economic growth and
development. These zones have attracted investments
across various sectors, created jobs, and stimulated
exports. However, the challenges faced by FTZs are
significant impediments to fully realizing their
potential.
Infrastructure deficits remain a critical concern.
Without adequate infrastructure, the cost of doing
business within FTZs can outweigh the benefits,
discouraging investors. Addressing these deficits
requires substantial investments in roads, ports,
utilities, and digital connectivity.
Policy inconsistencies and bureaucratic hurdles have
also discouraged investment. Investors seek stability
and predictability in policy frameworks to make long-
term commitments. Ensuring a transparent and
streamlined regulatory environment is crucial for FTZ
success.
Security concerns, particularly in certain regions, have
discouraged investors and affected FTZ operations. It
is essential for the government to address these
concerns to provide a safe and secure environment for
businesses operating within FTZs.
CONCLUSION
In conclusion, the strategic evaluation of FTZs in
Nigeria reveals a mixed picture of successes and
challenges. While these zones have played a significant
Volume 03 Issue 09-2023
10
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
ISSUE
09
P
AGES
:
6-10
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
(2023:
7.
448
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
role in economic growth and export promotion, they
face critical hurdles related to infrastructure deficits,
policy inconsistencies, bureaucratic bottlenecks, and
security concerns.
To unlock the full potential of FTZs in Nigeria,
concerted efforts are needed. This includes substantial
investments in infrastructure, a consistent and
investor-friendly policy framework, improved security
measures, and streamlined administrative processes.
Additionally, stakeholder collaboration between
government
authorities,
investors,
and
local
communities is essential to address these challenges
collectively.
FTZs can continue to be strategic drivers of economic
development in Nigeria, provided that these
challenges are effectively addressed, and the
successes are further amplified. A well-functioning FTZ
sector can contribute significantly to Nigeria's
economic diversification and job creation goals,
ultimately fostering a more robust and resilient
economy.
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1.
Bergsten, C.F. (1991), Commentary: The Move
Toward Free Trade Zones, Federal Reserve Bank
of Kinsas City Economic Review
2.
Hamada, K. (1974), An economic analysis of the
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‑
free zone, Journal of International
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‑
241.
3.
3. Hamilton, C. and L.O. Svensson (1982), On
the welfare effects of a ‘duty
-
‑
free zone
’
,
Journal of International Economics13,45-
‑
64.
4.
4. Krugman, P. (1991), The Move Towards
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5. Miyagiwa, K.F. (1986), A Reconstruction of
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6. Miyagiwa, K.F. (1993), The locational choice
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