Oil & Gas Free Zone, Developing Opportunities For Job Creation

In this presentation we will cover the following topics: Importance Of The Maritime Sector To Oil Export How OGFZA Benefits Nigeria’s Maritime Industry Impact Of OGFZA Activities On Maritime Industry Job Creation The Need To Replicate OGFZA’s Success Lessons For Low Performing Free Zones

Introduction The maritime is a key sector that facilitates international trade, serves as major source of revenue for many countries like Republic of Benin and others. Over 70% of the world’s oil and gas are produced in regions where total consumption of oil produced is not possible. Statistics shows that 80% of global oil is transported from producing countries to user countries by ship. Nigeria has become the natural hub of shipping activities in Africa being both an oil producing and exporting country, as well as a consumer nation.

Importance Of The Maritime Sector To Oil Export The Oil & Gas sector is the main stay of the Nigerian economy, accounting for about 35% of its GDP and over 80% of total export revenue. Nigeria is the sixth largest producer of crude oil in the world with expansive gas reserves, which is exported to international markets by sea where they are sold to finance the country’s development An efficient and virile maritime industry is therefore very important for the growth and sustainable development of the Nigerian economy.

HOW OGFZA BENEFITS NIGERIA’S MARITIME INDUSTRY About The Oil & Gas Free Zone Authority Nigeria The Oil & Gas Free Zone Authority, OGFZA is the National Regulatory Agency established by the Federal Government of Nigeria through Section 2 of the Oil and Gas Export Free Zones (OGEFZ) Act, No 8 of 29th March 1996 to regulate and manage Nigeria’s oil and gas export free zones. OGFZA works to facilitate public private partnership (PPP) investments in the nation’s oil and gas free zones as a vehicle for promoting accelerated growth and sustainable development.

Onne Oil & Gas Free Zone, Rivers State HOW OGFZA BENEFITS NIGERIA’S MARITIME INDUSTRY Onne Oil and Gas Free Zone, under the regulatory control of OGFZA, is the biggest Free Zone in Africa, completely dedicated to the Oil and Gas industry. It commenced operations as a distribution hub and supply centre from where major oil and gas projects are serviced but it has grown to accommodate manufacturing, stockists etc. Onne Oil & Gas Free Zone, Rivers State

HOW OGFZA BENEFITS NIGERIA’S MARITIME INDUSTRY OGFZA has built the capacity to cater to the peculiar and highly specialized needs of the industry with strategic policies below put in place: One-stop shop concept 24 hours service Stevedoring Shipbuilding and repairs Quay Size and Draft

IMPACT OF OGFZA ACTIVITIES ON MARITIME INDUSTRY Ship traffic in and out of Oil & Gas Free Zones Ports of Onne and Warri accounted for 23.66% of gross total ship tonnage for the entire country. The Free Zone recorded 89.53%, 89.65% and 85.34% of Nigeria’s outward cargo through put in the first, second and third quarters of 2016 respectively.

IMPACT OF OGFZA ACTIVITIES ON MARITIME INDUSTRY Success of Oil & Gas Free Zones managed by OGFZA has positioned Nigeria as a leading heavy weight of the Oil and Gas sector in Sub Saharan Africa by helping to: Create jobs Assist in skills transfer Reduce cost of projects Attract international companies Add growth in investment inflow Generate revenue

Job Creation The Oil and Gas Free Zone has created over 100,000 direct and indirect jobs since it’s establishment. Nigeria’s unemployment rate stands at 14.2% - Nigerian Bureau of Statistics The Oil & Gas Free Zone Authority is helping to create employment opportunities in Nigeria in the following ways: Attraction of companies Skills Transfer Expansion of Zone Corporate Social responsibility Review of The Oil and Gas Free Trade Zones Act

Job Creation Attraction of Companies The growing number of companies attracted to the Free Zone creates many satellite business and work places, which creates more employment. The vast amount of people being employed can be attributed to the companies setting up offices in the areas and creating a need for contributory labor.

Job Creation Skills Transfer OGFZA has established a Training Fund to provide funds for the promotion of and encouragement of skills acquisition in Nigeria with a view to having enough indigenous trained manpower to meet the needs of industries for the growth of the economy while providing jobs and creating wealth. A benefit of the creation of establishing the free zone is the transfer of skills to locals, which in turn empowers the local community, makes the indigenes more employable and works to tackle the high levels of insurgency in the country.

Job Creation Zone Expansion & Corporate Social Responsibility The expansion and commencement of new oil and gas free zones will attract more foreign investment which will lead to the creation of more job opportunities for Nigerians. Companies regulated under the Oil and Gas Free Trade Zones are required to carry out Corporate Social Responsibilities (CSR) thereby empowering indigenes, building capacity in the local communities and creating indirect jobs.

Job Creation Review of The Oil and Gas Free Trade Zones Act The Oil and Gas Free Trade Zones Act, which is currently under review could open a window for more employment share for Nigerians when passed. The new law could see a greater share of Nigerians at the management level of Licensed Companies. It could see the current employment level for Nigerians in Free Zone Companies tripled.

THE NEED TO REPLICATE OGFZA’S SUCCESS OGFZA has been one of Nigeria’s successful contingency plan – established to quickly diversify its export revenue base from crude oil extraction and export to local processing and manufacturing of oil and gas products and processed goods. The success of OGFZA can be achieved in other sectors of Nigeria economy if properly planned and implemented. Nigeria can establish free zones in other sectors to help diversify its economy. The Nigerian Government can have specific sector serviced zones with industry tailored incentives This can attract investments, generate revenue, create jobs, improve technological and managerial know-how and more.

LESSONS FOR LOW PERFORMING FREE ZONES Proper understanding of the concept and adoption of best practices. Focused and consistent implementation Avoidance of bureaucratic bottleneck by ensuring timely effective and efficient management. Specialization on a sector; this has helped OGFZA to develop tailored incentives and guidelines. Good supervision and implementation of Free Zone Policy guidelines that ensures compliance of the law by licensed companies. Protection of the companies from harassment from local councils and community taxation schemes Provision of standard Infrastructure Adequate Security administration.

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Contact Details HEADQUARTERS ABUJA OFFICE Marble House Federal Ocean Terminal (FOT) P.M.B 5474 Onne Port Complex, Rivers State Nigeria ABUJA OFFICE 4 Pope John Paul II Street, Off Gana Street, Maitama Abuja, Nigeria +234 (0) 909 111 1184, +234 (0) 909 111 1185 www.ogfza.gov.ng contact@ogzfa.gov.ng