NEPZA, Free Trade Zone Operators Urge CBN to Fast-Track Offshore Banking Approval

The Nigeria Export Processing Zone Authority (NEPZA) and operators of the country’s Free Trade Zones (FTZs) have called on the Central Bank of Nigeria (CBN) to quicken the process for granting approval for the operation of offshore banking across the zones to further aid the ease of doing business among others.  

They told newsmen that the offshore banking model, which is popular in other parts of the world, will help resolve current difficulties their businesses face in accessing foreign exchange in the country.

Specifically, they said the initiative would further ease pressure of the Naira. 
The stakeholders in the FTZs also maintained that offshore banking would provide businesses with a more stable financial environment to thrive.

They made their desires known when NEPZA embarked on a media tour to some of the zones in Lagos, with a view to ascertaining their state of operation, providing visibility and their challenges as well as allow journalists to assess the level of investments in the zones.

Speaking during a visit to the Lagos Free Zone (LFZ), the Zone Administrator, NEPZA, Mr. Garba Hayatu, called on the central bank to address grey areas that had slow down the process of approving the take-off of offshore banking to attract more investments and boost the development of the zones.

Hayatu said, “Currently, Free Zones in Nigeria cannot access forex directly from the Central Bank of Nigeria. Offshore banking can solve this problem.

“Operators in the Free Zone are often affected by currency volatility, and the inability to access dollars directly adds to their challenges.

“Offshore banking would provide businesses with a more stable financial environment.”
He pointed out that there had been ongoing discussions with CBN, and hoped the knotty issues would be resolved as soon as possible, adding that its actualisation would mean a “major win for free zone operators”.

Similarly, operators of the Lekki Free Zone Development Company (LFZDC), said currency fluctuation had made it harder for Nigerian investors to buy land for investment as the former is priced in dollars.

Deputy Manageing Director of LFZDC, Mrs. Bolatilo Ajibode, while also supporting the operation of offshore banking in the zones, said, “With the current exchange rate, it’s tough for many”, adding however, that “we have flexible payment options to ease the burden”.

it was further gathered that the notion of offshore banking has increasingly gained popularity among the economic zones operators because of its ability to simplify banking transactions and increase access to foreign currency to facilitate business operations.

Often established in financial hubs or jurisdictions with favourable regulatory, tax, and privacy laws, offshore banks offer various benefits including asset protection, currency diversification, tax efficiency, and confidentiality.

FTZs are designated areas with favourable trade regulations aimed at promoting international trade, manufacturing, and foreign investment, and offshore banking model remains critical in the zones to boost ease of international transactions, enhance access to financing and investment as well as provide a secure place to hold assets, protecting them from domestic financial risks or regulatory actions.

Essentially, offshore banking in FTZs helps businesses optimise their operations, streamline financial management, and maximise profitability while benefiting from a flexible and globalised financial environment.

James Emejo

Follow us on: