¹ Decree No. 34 of 1991.

² Nigerian Export Processing Zones Decree No. 63 of 1992.

³ Oil and Gas Export Free Zone Decree No. 8 of 1996.

⁴ Although the infrastructural development of the Calabar EPZ has reached an advanced stage, economic activites are yet to take off there. Of the applications received from investors to set up in the EPZ, eight—mainly from South-East Asia and Nigeria—have been approved. Sec The Economist Intelligence Unit, Investing, Licensing and Trading Conditions Abroad: Nigeria, London, 1997, 22.Google Scholar

⁵ Phase I of the Onne-Ikpokiri OGEFZ was launched on 8 March, 1997. However, at the time the following oil and gas projects and facilities were already in existence or were being developed in the zone: Nigeria LNG Plant; Oso Field Development; Soku Gas Plant; Obite Gas Plant; Obiafu Gas Plant; Bonny Terminal; Qua Iboe Terminal; Bonny Export Terminal; Port Harcourt/Okrika Refinery, and Eleme Petrochemical Complex: The Guardian, 25 March, 1997.

⁶ Jao, Y. C. and Leung, C. K., China's Special Economic Zones: Policies, Problems and Prospects, Hong Kong, 1986;Google ScholarPow, and Moser, M. J., “Law and investment in China's special investment areas” in Moser, M. J. (ed.), Foreign Trade and Investment Laws of The People's Republic of China, Hong Kong, 1987, 199; Regulations on Special Economic Zones in Guangdon province, 26 August, 1990.Google Scholar

⁷ Pow and Moser, op. cit.

⁸ Decree No. 63, 1992.

⁹ S. 1(2), the Decree.

¹⁰ S. 2.

¹¹ S. 1(2).

¹² S. 4(a).

¹³ See ss. 9 and 10.

¹⁴ S. 6.

¹⁵ S. 4(c).

¹⁶ S. 9(4).

¹⁷ S. 10(4).

¹⁸ S. 16, the Decree. These activities are manufacturing of goods for export; warehousing; freight forwarding and customs clearance; handling of duty-free goods (trans-shipment, sorting, marketing, packaging, etc.); banking, stock exchange and other financial services; insurance and re-insurance; import of goods for special services; exhibitions and publicity; international commercial arbitration services; and activities relating to integrated zones.

¹⁹ S. 6(3).

²⁰ S. 9.

²¹ S. 10; see also The Economist Intelligence Unit, op. cit. 12.

²² See for example ch. 2 of the Regulations for the Implementation of the Law of The People's Republic of China for Joint Ventures using Chinese and Foreign Investment, 20 September, 1983.

²³ The NEPZA recently published a pamphlet entitled “Facts about Nigeria EPZ”. Part VI (p. 16) of the pamphlet lists “Types of industries permissible in Nigeria's export processing zones”. This list does not include some of the businesses contained in Schedule 3 of the Decree, reflecting only manufacturing as opposed to service businesses. This pamphlet also discloses that only enterprises prepared to spend a minimum investment capital of US$500,000 or its Naira equivalent may be licensed to operate in an EPZ (p. 16). This pamphlet obviously does not constitute subsidiary legislation, but it could constitute a source of bureaucratic abuse of power.

²⁴ See e.g., art. 19, The People's Republic of China, Administration of Technology Import Contracts Regulations Implementing Rules, 20 January, 1988. This article provides that where the approval authorities fail to communicate to an applicant their decision approving or refusing to register a contract within the specified time, such a contract shall be deemed to have been approved.

²⁵ See, for example, Kehinde v. Registrar of Companies (1979) 3 LRN 213.

²⁶ Companies and Allied Matters Decree No. 1 of 1990. (Also in Cap. 59, Laws of the Federation of Nigeria, 1990 as Companies and Allied Matters Act.)

²⁷ Perhaps a more troubling question is whether the requirement for “re-incorporation” of a company already registered or incorporated overseas is not an unnecessary burden. The requirement of re-incorporation of foreign companies in Nigeria has been criticized as giving an impression of a restrictive investment climate and as expensive and unnecessary: see Ogowewo, , “The shift to the classical theory of foreign investment: opening up the Nigerian market”, (1995) 44 I.C.L.Q. 915, 924. It should be sufficient for the foreign company to file certain returns with NEPZA as notification of intention to establish a branch office or business in an EPZ, subject to NEPZ approval. In this context, the procedure becomes merely one of licensing as a n EPZ enterprise. Establishment in the EPZ would then enable an enterprise to transact business in other parts of Nigeria.CrossRefGoogle Scholar

²⁸ The extent to which tax rebates and holidays are effective in attracting foreign investments remains a controversial point: see Yelpaala, , “In search of effective policies for foreign direct investment: alternatives to tax incentive policies”, (1985) Northwestern Journal of International Law and Business, 7, 208;Google ScholarKanyip, , “Taxation issues in foreign investment”, presented at the Workshop on Foreign Investment Policy and Practice, Nigerian Institute of Advanced Legal, Studies, 24–26 March, 1997. But it seems that tax incentives do influence the level of foreign investment in Nigeria's up-stream petroleum sector: seeGoogle ScholarMitro, , “Investing upstream: the multinational experience”, (1993/1994) 1 Nigerian Oil and Gas Annual, 19. The fact that the tax rate is 85% in this sector could be an excepting factor. It seems, however, that where tax rates are normal, tax breaks may not have a decisive impact on foreign investment decisions.Google Scholar

²⁹ S. 24.

³⁰ Cap. 200, Laws of the Federation of Nigeria, 1990.

³¹ S. 18 (5).

³² S. 12.

³³ In law, the Minister cannot amend a Decree through this means. Not even the head of state can do that in the budget speech: Asheik v. Governor, Borno State (1994) 2 Nigerian Weekly Law Reports (hereafter N.W.L.R.) (part 326), 344 at 353. A change in a written law can only occur by way of a valid amendment. No such amendment has been made with regard to the Decree. It is also unlikely that the Minister's Speech, assuming it has the force of law, would affect the tax holidays granted under the OGEFZ Decree. It is however important to observe that s. 28 of the Companies Income Tax Act has been amended to grant 100% capital allowance in any year of assessment to a company which has incurred an expenditure in its qualifying building and plant equipment in an approved manufacturing activity in an EPZ. This amendment no doubt assumes the efficacy of the Minister's Speech with regard to the tax exemption granted under the Decree. This assumption, however, is misplaced.

³⁴ S. 8.

³⁵ With the repeal of the Exchange Control Act (see Exchange Control (Repeal) Decree No. 8 of 1995) and the promulgation of the Foreign Exchange Monitoring and Miscellaneous Provision Decree No. 17 of 1995, exchange control has long ceased to be a feature of Nigeria's monetary and trade policy. It is also possible to argue that the Minister's attempt to reduce the tax exemption in the Decree to a three-year tax break indicates the current official attitude towards the tax exemption provided in the Decree. This therefore tallies with tax incentives offered to exporting enterprises under the Industrial Development (Income Tax Relief) Act, Cap. 179, Laws of the Federation of Nigeria, 1990 and the relief granted by the 1996 Budget to export oriented enterprises: see Arthur, Andersen, “Export incentives and procedures”, (1996) 2 The Newsletter on Nigerian Business Issues, for an outline of export incentives in Nigeria.Google Scholar

³⁶ This incentive is offered by most state governments in Nigeria in their efforts to attract investment.

³⁷ Some of these incentives are: (i) repatriation of foreign capital investment in the zones at any time with capital appreciation of the investment; (ii) remittance of profits and dividends earned by foreign investors in the zones; (iii) non-requirement of import or export licences; (iv) allowance of up to 100% foreign ownership of business in the zones; and (v) foreign managers and qualified personnel may be employed by companies in the zones.

³⁸ a The Nigerian Investment Promotion Commission Decree No. 16 and the Foreign Exchange (Monitoring and Miscellaneous Provisions) Decree, both of 1995, allow free transfer of capital and returns on investment all over Nigeria. No law in Nigeria now requires import or export licence as a general requirement for engaging in export or import transactions. The Nigerian Investment Promotion Commission Decree also generally allows 100% foreign ownership of business enterprises in Nigeria. No law in Nigeria absolutely prohibits the employment of expatriate staff. To the extent that work permits are still necessary for the employment of expatriates in the zones, the incentive relating to employment of expatriates adds nothing to existing law on the subject. It is also necessary to observe that some incentives such as the Export Development Scheme, Export Adjustment Scheme and the Export Expansion Grant available under the Export (Incentives and Miscellaneous Provision) Decree No. 65 of 1992 are also available to enterprises operating outside the zones. The greatest incentive in the zones, however, remains in the power of the Minister responsible for the zones to insulate the zones from laws in force in Nigeria.

³⁹ S. 18(1) (h).

⁴⁰ S. 20.

⁴¹ S. 18(3).

⁴² A similar approach was adopted in the LNG Decrees: see Decree No. 39 of 1990 and Decree No. 113 of 1993. This suggestion does not overlook the debate over whether a government can validly and effectively bind itself to an unchanging state of laws: see Omorogbe, , “Law and investor protection in the Nigerian gas industry”, (1996) 14 Journal of Energy and Natural Resources Law 2 179, 188–190. Although the legal consequence of such an attempt is doubtful, its extra-legal significance may be relevant. A government which guarantees the stability of any body of laws, and goes ahead to change them without consultation with the relevant stakeholders, would be undermining its credibility: seeCrossRefGoogle ScholarOgunlade, Ayo (Honourable Minister for National Planning) on why the federal government does not want to reverse the policies introduced in the 1997 Budget despite abuses by some elements in the private sector, in The Guardian, 17 June, 1997. It is also possible that the stability of the Decree is made a term of licence granted to an enterprise to set up in an EPZ. A unilateral change in law would amount to a breach by the government so that even if the enterprise cannot obtain specific performance of that term, it may be able to obtain monetary compensation for any loss occasioned to it by the change in law. This seems to be one way of appreciating the case of Aminoil v. The Ruler of Kuwait (1988) L.A.R. 143.Google Scholar

⁴³ Ss. 18(1) (e), 11(1), the Decree.

⁴⁴ It was hoped that NEPZA would soon make regulations prescribing the criteria for the grant of approval. This seems to be the intention of the draftsman of the Decree.

⁴⁵ S. 13.

⁴⁶ This provision was perhaps copied out of context from a country such as China where the mobility of persons and labour is planned, regulated and monitored by the state.

⁴⁷ Chapter 4 of the Constitution of the Federal Republic of Nigeria guarantees individual freedom of movement in Nigeria.

⁴⁸ The limitation on the access of foreigners to the EPZs contemplated here relates only to the usual immigration procedure of ensuring that unfit aliens are not allowed into a country. We do not in any way suggest that the practice of work permits and expatriate quota requirements should be encouraged or has been rightly extended to EPZs. We do not see why an alien who shows that he has a genuine business or has an employment or a valid offer of employment in an EPZ should not be allowed entry.

⁴⁹ Although the practice of arbitration is fast gaining popularity in Nigeria, the arbitral process needs an efficient court system or judicial process to succeed. An inefficient judicial system can be employed to frustrate the process of arbitration. A way of avoiding this would be to attempt to insulate the arbitral process from the Nigerian judicial system, perhaps by choosing a foreign city as the seat of arbitration. This may not be exactly effective. Furthermore, not all suits emanating from activities in an EPZ may be amenable to arbitration. For example, some claims in tort, even if ordinarily arbitrable, may not be the subject of any arbitration agreement.

⁵⁰ S. 10, Decree No. 34 of 1991.

⁵¹ But the point must be made that subsidiary legislation cannot be deviate from or cover more ground in substance than the enabling statute: see Conac Optical (Nig.) Limited v. Akinyede (1995) N.W.L.R. (Pt 400), 212;Google ScholarGovernor, Oyo State v. Folayan (1995) 8 N.W.L.R. (Pt 413) 292. legislation can only provide details of the rules and principles enunciated in the enabling statute.Google Scholar