Ibaka Oil and Gas Free Zone Act, Salary and Recruitment (2022/23 Update)

The Ibaka Oil and Gas free zone was recently approved by the Nigerian government and is located at Ibaka, Mbo, Akwa Ibom state. It is posed to create employment opportunities for over 5,000 persons. It is nicknamed the Liberty oil and Gas Free Zone or West Africa’s biggest free zone. It has a land area of over 500 square kilometers, extending to neighboring towns like Onna, Mkpat Enin, Ibeono and Eastern Obolo. The project is a joint venture of the Nigerian Petroleum Corporation (NNPC), an American investment firm, Black Rhino Group and the Akwa Ibom State government.

Here’s what you should know about the Ibaka Oil & Gas Free Zone Act, Salary & Recruitment.

 

 

What is a Free Zone?

A free zone is also known as export processing zones (EPZs). It is an area where business and trade laws are distinct and may differ from the rest of the country. Wikipedia describes this place as a special economic zone. Businesses and industries in a free zone may be exempted from customs duty and some specific taxation schemes. Free trade zones are usually geographically located around seaports, airports or boundaries. This will tremendously boost trade and enterprises in this sector.

Are there Free Trade Zones in Nigeria?

Yes, there are more than 15 free trade zones in Nigeria in which any Nigerian company or business can choose to provide their service or business. Here is the list of free trade zones in Nigeria:

• Aluminum Smelter Company Free Trade Zone

• Border Free Trade

• Calabar Free Trade Zone

• Centenary Economic City

• Onne Oil and Gas Free Trade Zone

• Enugu Industrial Park (Free Zone Status)

• Kano Free Trade Zone

• Ibom Science & Technology Park Free Zone

• Lekki Free Trade Zone

• Maigatari Border Free Trade Zone

• Nigeria International Commerce city

• Ogun-Guangdong Free Trade Zone

• Illela International Border Market

• LADOL Free Zone

• Lagos Free Trade Zone

• Snake Island Free Trade Zone

• Tinapa Resort & Leisure Free Trade Zone

Oil & Gas Free Zone Act

The oil and gas free zone authority is empowered by the Nigerian law to regulate and supervise the business activities and operation of all oil and gas free trade zones in Nigeria. It was created through Section 2 of the Oil and Gas Export Free Zone Act No. 8 of 1996. The Authority started supervising the business and industrial activities in Onne, Rivers State, in 2001.

Ibaka Oil & Gas Free Zone

In 2013, the oil and gas free zone authority began consultation with the Akwa Ibom state government regarding the creation of an Oil and Gas Free Zone in Ibaka. A memorandum of understanding was signed, and 2400 hectares of land were allocated to the project.

President Buhari approved the Ibaka Oil & Gas Free Zone in August 2020. It is an ambitious project with mega infrastructures like Ibaka Super Highway and the Ibom Deep Seaport.

Who Can Operate in Ibaka Oil & Gas Free Zone?

In the Ibaka Oil & Gas Free Zone, public, private, or a merger of public and private companies may trade under the Authority’s oversight and permission. In other words, before a business may actually function in an Ibaka Oil & Gas Free Zone, it must first register with the Authority and get a license to operate. This grants such a company the designation of “an Approved Enterprise,” i.e., a company that has registered with an Authority and been granted permission to conduct an authorized activity in the Ibaka Oil & Gas Free Zone. As a result, only Approved Enterprises are permitted to conduct business in the Ibaka Oil & Gas Free Zone.

What was the Policy Rationale for creating the Ibaka Oil & Gas Free Zone?

Some of the policy rationales for the establishment of the Ibaka Oil & Gas Free Zone include: Help draw foreign investors, generate jobs, improve trade and industrial growth, increase exports, increase export earnings, promote the acquisition of technical expertise to Nigerians, and play a role in Nigeria’s industrial progress and growth.

What activities are authorized in the Ibaka Oil & Gas Free Zone?

Processing of export products, inventory control, logistics services, and cargo handling, packing of duty-free goods (supply chain, categorizing, branding, labeling, and so forth), financial services, brokerage firm, and other investment management businesses, insurance and reinsurance, importing goods for specific services, expos and press coverage, International Commercial Arbitration Services

Is it legal to conduct retail trade in the Ibaka Oil & Gas Free Zone?

No retail business shall be permitted within the Ibaka Oil & Gas Free Zone without the Authority’s explicit permission. Such retail business may be restricted to such terms of service as the Authority may prescribe from now and then.

Is it possible for a foreign investor to operate in the Ibaka Oil & Gas Free Zone?

Foreign investors are free to conduct business in FTZs, and Approved Enterprises can have 100 percent foreign shareholding. When a foreign investor registers as a business in Ibaka Oil & Gas Free Zone, the licenses given by NEPZA are exclusively effective within Ibaka Oil & Gas Free Zone, and bearers of such licenses who wish to conduct business must follow the relevant laws.

 

Benefits of Ibaka Free Trade Zone

Apart from spurring economic and industrial activities, and promoting trade and employment opportunities, here are the specific benefits of the free trade zone:

• Businesses in the free trade zone will not be subjected to any taxes, foreign exchange regulations, levies and duties in the country.
• Profits and dividends earned by foreign investors can be quickly remitted back to investors.
• Companies in the free trade zone will not need any import or export license.
• Foreign-owned businesses are allowed to operate.
• Rents are paid to NEPZA, eliminating the likelihood of multiple taxations.
• Access to the seaport, highway and airport.

How to Set Up a Company in the Ibaka Free Trade Zone

To set up your company in the Ibaka Free zone, there are a lot of steps you need to take, which are uniform in all free trade zones in Nigeria.

• Register by downloading the registration form here. You can also visit any free zone administration office in Nigeria.
• Submit the form to the free trade zone administration office or the Nigeria Export Processing Zone Authority office with your project plan/ feasibility study. After review, which takes five days, you will get a response, whether your application is accepted or rejected.
• Once your application is approved, you will receive an operating license, which will indicate where space is reserved for you after prior discussion.
• You will be given a certificate of importation, and you can start building your warehouse and office there.

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