Special Economic Zones in the OIC Region:
Learning from Experience
148
Costs
Table 5-20 - Costs within Lekki Free Zone
Labour cost-
minimum wage
Electricity costs -
kWh
Rental rates
USD 50 / month113
Approved Zones are
required by law to pay
in line with global best
practices and not below
the FGN minimum
wage.
N45 per Kw/Hr114
- Warehouse Rental - USD50 per square meter per annum
- Standard Factory Rental: same as the rental for
warehouse
- Sublease fee for manufacturing - USD25 per square meter
for unprepared land
- Sublease fee for manufacturing - USD35 per square meter
for prepared land
- Sublease fee for Oil and Gas - USD200 per square meter115
- Sublease fee for Real Estate related investment- USD200
Source: Various – see footnotes
The factor costs in Nigeria, by international benchmark standards, differ by input. While labour
is fairly affordable by international benchmark standards, the cost of electricity and rent is not
as cheap as other countries in Africa. Nigeria has to a certain extent overcome these cost factors
through its good location and specific offerings, catering to Chinese investors in the Southwest
quadrant and catering to the Dangote Group’s requirements in the Southeast quadrant.
Market Focus
The Lekki Free Zone is a mixed-use zone and therefore focuses on investors that want to export
as well as target the local market.
Nigeria is a signatory to AGOA and therefore exporters have duty free access to the US market
for products stipulated under the agreement – including textiles and apparel.
The EU has initiated (but has yet to finalise) an Economic Partnership Agreement with 16 West
African states, in the Economic Community of West African States (ECOWAS) – which includes
Nigeria – and the West African Economic and Monetary Union (WAEMU). Once this agreement
is in place, Nigeria will have even better access to EU markets, across a range of products.
113 The new proposed minimum wage being considered in Nigeria at present is, however, over three times this amount at
about USD155/month at current (Aug 2017) exchange rates
114
115 Ibid