5 countries that operate free port in Africa
A free port is a special customs area where normal tax and customs rules do not apply. It is normally designated by a government to encourage economic activities.
Businesses that are operating within a free port normally benefit from not paying taxes. They benefit by producing the goods and adding value to them and then exporting them.
Free ports are specifically designed to encourage businesses that import and then process the materials into finished goods.
ADVANTAGES OF FREE PORTS
- To begin with, one main advantage of a free port is that it creates a hub for job creation, development, innovation, and international investment in certain jurisdictions.
- Secondly, economic studies have shown that free ports encourage imports by lowering duties and paperwork.
- Also, free ports help in the generation of foreign exchange.
DISADVANTAGES OF FREE PORTS
- The main disadvantage of having a free port is that the revenue gotten by the government will be reduced due to the exemption of tax on goods.
- Also, the benefits of free ports to businesses that import or export do not make any difference to the economies running a free port.
- Lastly, free ports become a haven for illicit activities such as money laundering, tax evasion, and other criminal activities.
AFRICAN COUNTRIES THAT OPERATE A FREE PORT
1 . Firstly, Tanzania
Tanzania’s free port zone Mtwara Port was built by the British when they colonized them. The port was made a free zone in 2009. This was when stakeholders of Tanzania’s oil and gas were considering the most effective and efficient way to manage the operations of oil and gas.
2 . Libya
Libya’s free port zone is Misrata free port and it is the first free trade zone to be established in Libya. It was established under the Libyan law, Law No. 9/2000 to control free-trade activities, enhance the local performance of the economy, and provide employment opportunities to its citizens.
3 . Another country is, Liberia
Free Port of Monrovia is the main designated port in Liberia for commercial purposes. Port of Monrovia port was created artificially on Bushrod Island in 1948 by the United States Military.
4 . Morocco
Atlantic Free Zone Kenitra can be found at the center of the Rabat-Salé-Kénitra region, 8 km from the Kenitra. This port is mostly dedicated to the automotive sector.
5 . Eritrea
The Massawa free port used to be the main port of Ethiopia until a border war between Eritrea and Ethiopia in the year 1998 to 2000 brought an end to its use. The Massawa free zone gives one access to the international airports as well as access to the sea
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