Duty-Free Diplomatic Village Primed For Nigeria’s Economic Retention

On Tuesday February 14, 2023, The Federal Government officially unveiled the Diplomatic Duty -Free Village in Abuja in line with the United Nations Vienna Convention  on Diplomatic Relations 1961 which was domesticated by Nigeria through the Diplomatic Immunities and Privileges Act of December 1962.

This project is primarily a private- investment driven by Nigerians in the Diaspora, who have decided to come back home  to engage diplomats in the country. The project is  also a government policy because the Federal Government wants to abide by  the a global best practice  because all countries of the world have adopted the Vienna convention and the Nigerian version which exempt the diplomats from income tax, VAT or duty whether national, regional or municipal.

Minister of Finance Budget and National Planning, Zainab Ahmed in her remarks during the launch on Tuesday said “Specifically, the Diplomatic immunities and Privileges Act of 1962 empowers the Ministry of Finance to exempt diplomats from all taxes including duty free shopping facilities in several countries, such as South Africa, Ghana, Tanzania, Kenya, most of the EU countries and a few others, in line with government’s responsibilities to ensure the physical security of people much in our country.”

Ahmed noted that the facility is only for diplomats and members of their household, adding that the facility became important to ensure coordination of imports for the diplomats.

The village she said is for “strict control or cessation of individual requests for waivers on imported items by diplomats which presently, is largely uncoordinated. She also said that the duty -free facility will enable the government to maintain a database of products.

The Minister of State, Foreign Affairs, Amb. Zubairu Dada in his reaction, said the facility will help in reducing the level of shipment by various diplomats as the facility, which is a one-stop shopping village will take care of all the needs of the diplomats in Abuja.

He also assured members of the diplomatic community of their safety saying that the government will provide adequate security at the village.

He said, “No doubt the services provided by the duty -free facility will drastically reduce the volume of diplomatic shipments into the country.

“It is my hope that the services of the duty- free facility will further provide an additional platform and opportunity for members of the diplomatic community to enjoy this dividend in our country. I understand that the facility has different interesting and top notch sections ranging from shopping centre, recreational services, spa, eye centre, restaurants and others.

“The federal government of Nigeria has so far demonstrated its commitment towards ensuring the success of the duty free facility by giving the needed support for each operation, which will by no small measure contribute immensely to the economic growth of Nigeria,” Zubairu said.

The Managing Director of the Diplomatic Village, Uche Odozor said that the project which started in 2011 will meet the needs of the diplomats in accordance with the Vienna convention.

He said “We have within this facility a wellness and fitness centre comprising a spa for those who enjoy wellness and beauty. If you go around this country and this city, you will find nothing like these within these premises. “We also have a laundry service for persons who want to do yoga, and we also have, above all, our diplomatic village clinic.”

Taking journalists round various sections of the facility on Friday, February 17, Odozor noted that with the Diplomatic Village in place, it means that all the personal consumption of the diplomats resident in Nigeria including those that are visiting contingent of Commonwealth of Nations will not be taxed.

On the economic opportunities the Village  presents to Nigeria, Odozor noted that capital retention is the the most significant economic benefit because the diplomats will be encouraged to spend their income and allowances in the country and create opportunities for the the Nigerian youth to increase local production and fabrication of the products thereby enhancing their creative skills.

“ It will offer a huge economic benefit because before now many diplomats were bringing in items for their own consumption into this country. You know  Nigeria is where we have the largest contingents of diplomats  on the continent. So, that is why we started this Village. What it means is strict control of arbitrary importation by diplomats, which they have the right  to do but  rather than bring these items in for personal use the diplomats sometimes bring them in commercial quantity, which led to revenue losses for us. But the establishment of this Village is going to curb revenue losses highly and keeps the proper information that the government  needs.

“So, we will benefit as a country from capital retention because diplomats want to stay in our country and actually also spend in our country. They have allowances given to them, so, rather than have them fly out every weekend to neighboring countries simply because there is no duty- free shop for them, they can now come here,” he said.

The village appears to have also created opportunities for the Internally Displaced Persons(IDPs) which creative works of arts are accommodated and showcased to the diplomats for purchase and  the proceeds go to the the Displaced Persons.