The Federal Government has begun overhauling regulations governing Nigeria’s Special Economic Zones (SEZs) to curb the diversion of free-zone goods into the domestic market while preserving incentives for export-oriented investments.
Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, said the reforms were prompted by concerns that some goods produced in free zones were entering the Nigerian Customs Territory while still benefiting from fiscal incentives designed primarily to support exports.
Speaking at the Special Economic Zones Stakeholders Meeting, Oduwole said the practice created an uneven playing field for manufacturers operating within the Customs Territory, who remain subject to the full domestic tax regime.
She said the reforms were being pursued through a “whole-of-Ministry” and whole-of-government approach involving relevant agencies and private-sector stakeholders.
The process led to the February 2026 inauguration of the Special Economic Zones Legislative and Regulatory Reform Committee, comprising officials of the ministry, the Nigeria Export Processing Zones Authority (NEPZA), the Oil and Gas Free Zones Authority (OGFZA) and other relevant teams.
Three regulatory instruments are central to the reforms, including the Nigeria Export Processing Zones Authority Regulations and Operational Guidelines for Free Zones in Nigeria, 2025, the Nigeria Export Processing Zones (Domestic Sales, Fiscal Alignment and Customs Treatment) Regulations, 2026, and the Oil and Gas Export Free Zones (Domestic Sales, Fiscal Alignment and Customs Treatment) Regulations, 2026.
Oduwole said the new framework would clarify the legal and fiscal treatment of free-zone operations while retaining incentives needed to attract investment.
The reforms will reinforce the export orientation of the scheme through a 75 per cent export and 25 per cent domestic-sales framework, with goods sold into the domestic market subject to the appropriate tax treatment under Nigerian law.
The minister warned operators against diversion of goods, mispricing of related-party transactions, under-declaration of domestic sales and using the free-zone framework to disguise businesses effectively operating within the Customs Territory.
She also stressed that administrative circulars could not amend Acts of Parliament, saying historical concessions or practices inconsistent with primary legislation could no longer guide investment or regulatory decisions.
Despite the tighter regulatory framework, Oduwole highlighted investments attracted by the zones, including Health Textiles Nigeria FZE, a Vestergaard subsidiary that began production at the Lagos Free Zone in August 2026.
The facility produces dual active-ingredient insecticide-treated mosquito nets and is expected to manufacture about 10 million nets annually and employ more than 600 Nigerians at full capacity.
She also cited the Dangote Industries Free Zone at Lekki, which hosts the Dangote refinery and Africa’s largest granulated urea complex, as well as an equity investment of up to $50 million by the International Finance Corporation in the Lagos Free Zone.
According to Oduwole, Nigeria’s free-zone scheme currently accounts for more than $200 billion in foreign investment, over N900 billion in domestic investment and more than 100,000 direct jobs, with an estimated 500,000 additional jobs linked to supply chains, logistics networks and host communities.
She said the government’s goal was to protect legitimate investments and preserve the export and employment benefits of free zones while strengthening compliance and ensuring fair competition across the economy.
