ABSTRACT
In this research project Export Processing Zone (EPZ) is defined as
zone designed and designated by the Government of a nation, to attract
local foreign investment towards industrial development of export
purposes. EPZ enterprises and developers enjoy a liberal operating
environment with range of incentive provided by the EPZ Act (such as
long period of tax holiday, high quality infrastructural at the zone
etc) which enterprises outside the zone do not enjoy at the same rate.
Enterprises and projects to be operated within EZP are usually
assessed based on the job creation, non-traditional export product
development, technology transfer and training of workers, incremental
productive investment and backward linkage with the nation economy. EZP
Calabar is used in this project as a case study to appraise the impact
of EZP in economic integration of West African countries.
The dissertation has focused on making theoretical and practical
contribution to the impact of EZP not only in the West African sub
region but generally in countries of the world, this study has been
designed to weigh the costs relative to benefits of an EZP as a tool for
economic development.
Various relevant literature, on ideas, studies and write-ups were
used for this research topic, they were all blended together under
different headings in the study to shed light on the impact of export:
processing zones towards the economic development of a nation.
Specific; issues were dealt with such as re-statement of the research
questions, the research design, characteristics of the study
population, population and sampling, techniques of data collection,
questionnaire assumption, questionnaire administration concept of
reliability and procedure for processing and analyzing data.
Special analysis of the quest were made and the responses obtained in
view of the need to answer the research questions were developed in
chapter one of this study using percentage calculation as mat tools hr.
analysis.
Various findings, suggestions and recommendations of immense benefits were revealed in the last chapter of this dissertation.
This study is a worthwhile exercise, knowledge impact, having
theoretical and practical significance, which has provided insight on
the Calabar EZP as a tool in fostering economic integration among
countries of West African sub-region.
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND TO THE STUDY
This study is aimed at showing the impact of export processing zones on the economic integration of West African Countries.
Export Processing Zones have been given various terminologies, as
perceived and understood by various countries and institutions all over
the world (but with the same trade idea in mind). The traditional term
since nineteenth century is 'Free Trade Zone'. UNCTAD, USAID, and United
Arab Emirates call it Free Zone'. Harvard University World Export
Processing, Zone Association (WEPZA) and the World Bank call it Export
Processing Zone'. The Organization for Economic Co-operation and
Development (OECD) calls it Free Export Processing Zone.
Since the 1980s, EPZs have been promoted as a way of industrializing
through export processing EPZ countries (of which Nigeria is one) are
usually those with many people employed in agriculture, exporting low
value agricultural goods, with high unemployment, local production for
local markets, low levels of foreign investment and economic stagnation.
Embracing EPZ idea signal that a country is replacing in
inward-looking development strategy based on import substitution with an
outward oriented development path. The World Bank see EPZs as a first
step towards greater economic liberalization, to integrate protected
countries into world markets EPZs are thus one part of a broader program
of liberalizing economies to global competition and free trade.
In 1970, about 50000 workers were employed in EPZs worldwide. By
1990, their number was estimated to be up to 3.5 million (ILOIUNCT AD
Geneva 1988, SATUCC/TARSC, 1996). Differing figures are a result of
different EPZ definitions. Some consider only fenced off EPZs and others
such as that of the World Export Processing Zone Association (WEPZA)
include "all government authorized areas such as tree ports, free trade
zones, customs free zones, industrial free zones and foreign trade
zones".
Generally speaking, an Export Processing Zone is a trade zone
designed and designated by the government of a nation, to attract local
and foreign investment towards industrial development for export
purposes. EPZ enterprises and developers enjoy a liberal operating
environment with range- of incentives provided by the EPZ Act (such as
long period of tax holiday, high quality infrastructure at the zone,
etc) which an enterprise outside the zone does not enjoy at the same
rate.
Enterprises and projects to be operated within the EPZ are usually
assessed based on job creation, non-traditional export product
development, technology transfer and training of workers, incremental
productive investment and backward linkage with the nation's economy.
In view of the above background, this study is designed to use the
EPZ Calabar to measure the extent of' economic integration and
development of West African countries as a result of the zone.
1.1 HISORICAL BACKGROUND OF CALABAR EPZ
The implementation of Nigerian Export Zone Programme with the
enactment of the law, the Nigerian Export Processing Decree in 1991. The
provision of the regulatory and administrative framework permitted the
prompt commencement of the: construction of physical facilities at the
site of Nigeria first export processing zone, Calabar EPZ in River State
in the South-East of Nigeria.
Administration of the Nigeria EPZ program is vested by law in the
Nigeria Export Processing Zones Authority (NEPZA). NEPZA is empowered by
law to grant all requisite permits and approvals for operators in the
zones to the exclusion of another government agencies and bodies. The
Nigeria EPZs regulatory framework is liberal and provides a conducive
environment for profitable operations.
The incentives available to operators in Nigeria EPZ's compare
favorably with the most attractive in the world and are the best in
region. They include 100% foreign ownership of investments, "one stop"
approvals, no import or licenses, duty free import of raw materials,
unrestricted remittance of capital profits and dividends, tax holidays
and no strikes.
1.2 EPZ CHOICE OF CALABAR AS THE SITE OF NIGERIA'S PIONEER
Calabar, the site of Nigeria's pioneer Export Processing Zone (EPZ)
is an ancient and historic city with an enviable past, having served as
the capital of the southern protectorate of Nigerian and southern
protectorate in 1914.
This quite but beautiful city served as the centre of operations for
the Royal Niger Company during the days of the oil palm trade as well as
being an age long- centre of learning. Calabar presently the capital
of the Cross River State in the south-east Nigeria and is fondly
referred to as the "Canaan City" - "the biblical land of flowing with
milk and honey" although one is not likely to actually find milk and
honey flowing on the streets of this enchanting and alluring city, one
will definitely discover the warmth and hospitality of the people of
Calabar in abundance.
There are other attributes, which make the choice of Calabar as the
site of Nigerian pioneer of EPZ as excellent one. The city has good road
links with other parts of the country and us traversed by the
Trans-African Highway and major gateway to Cameroun and the countries of
central Africa. It modem seaport adjoining the EPZ is of special
advantage and will result in significant saving for shipping and haulage
services for investors in the zone. The city's national airport is less
than twenty minutes from the site of Calabar EPZ.
Calabar and its environs have a pool of skilled and trainable
manpower with significant industrial experience. Most significant
industrial activity in Calabar is currently in natural resources-based
industries such as oil palm, wood, limestone, rubber, cocoa and coffee.
However, the oil and the gas activities in nearby areas also had some
impact on industrial activity in the city.
The disposition of its people its rich history, culture and several
natural attractions make Calabar an ideal tourist location. Attractions
in calabar and within surrounding towns in Cross River State include the
Agbokim Water Falls, Qua Falls, the Gorilla Sanctuary in the Kanyang
National Park, the Obudu Ranch and the Calabar Museum which is housed in
the famous Old Residency. Of paramount interest to avoid golfer is the
well aid out Calabar Golf Course. For those with a keen interest in
culinary delights, Efik cuisine and all that it entails is a must for
all lovers of rich and delicious food.
Calabar has described as Calabar of delight, the Calabar EPZ promises
to make Calabar more delightful and profitable especially for investors
in the zone.
1.3 STATEMENT OF RESEARCH PROBLEM
The Calabar EPZ, like any other EPZs has its own reasons for being
set (Some of the issues that this study is designed to addressed are as
follows:
· Whether the Calabar EPZ is contributing the much anticipation volume of export and foreign exchange.
· Whether the Calabar EPZ is attracting the much anticipated industrial development in the zone.
1.4. PURPOSE OF THE STUDY
The purpose of the study therefore is;
· To describe recent trends in the development of free zones
· To analyze the potentials of free trade zones for enhancing economic growth and development.
· To assess the compatibility between the free trade zones system and international multilateral trade agreements.
· To draw linkages between the existence of an EPZ and the economic growth of the host nation.
1.5. RELEVANT RESEARCH QUESTIONS
In order to achieve the purpose of this study, the following research questions shall be answered:
· What is the extent of the contribution of Calabar EPZ to the overall non-oil export in Nigeria? '
· How much of trade exchanges between the West African countries has Calabar EPZ facilitated since inception?
· What is the extent of industrial development in the Calabar EPZ since inception?
· What linkage has Calabar EPZ with the general level of industrialization I in the country?
1.6. SIGNIFICANCE OF THE STUDY
A study of this kind is expected to make theoretical and "practical
contributions to the impact of EPZs in countries of the world. The study
will provide a basis to assess the costs and benefits of an EPZ as a
tool for economic development.
The study is also expected to guide investors regarding the general
operations at EFZs worldwide. Also the government, organizations and
individuals concerned with formulating, designing and implementing
policies regarding EFZs would benefit from this study.
1.7 SCOPE AND LIMITATION OF THE STUDY
The basic premise upon which this study will be based is that EPZs
are pose to have linkages with economic growth within national economy
and integration of economic activities between countries.
This study will concentrate on all aspects of EPZ. The study will be
limited to EPZ Calabar. Information sourcing shall be routed through the
Nigerian Export Processing Zone Authority Lagos office. This is due to
time and financial constraint for visiting all the companies operating
within the EPZ Calabar one by one,