What May Nigeria-Binance Digital Free Zone Partnership Imply? – Techpoint Africa

The central theses:

  • Nigeria has partnered with Binance and Talent City to create West Africa’s first virtual free zone. However, there is very little information about a virtual free trade zone and how the partnership will work.
  • So far, statements from Binance and the Nigeria Export Processing Zones Authority only point to the goal of the partnership, which is to promote economic development.

The news

On Saturday, September 3, 2022, the Nigeria Export Processing Zones Authority (NEPZA) announced that it is seeking a partnership with Binance and Talent City for Nigeria to host the first virtual free trade zone in West Africa.

NEPZA chief executive Adesoji Adesugba said in a statement that the partnership would be similar to Dubai Virtual Free Zone.

He also said that the partnership aims to create “thriving virtual free zones to take advantage of a nearly trillion-dollar virtual economy in blockchains and the digital economy.”

When I contacted Adesugba to share more details about the proposed virtual free trade zone, I received no response. Due to the limited information in the statement, it will not be easy to paint a clear picture of what to expect with the partnership.

What is a Virtual Free Trade Zone?

Although NEPZA did not provide any definitions, we can conclude that virtual free zones are digital versions of free trade zones (FTZ). Free trade zones are an area where goods can land, be manufactured or exported without customs interference.

Virtual Free Trade Zones can therefore be described as an online marketplace – metaverse, mobile app or web app – where digital or virtual products can be traded without the intervention of the body that regulates such products.

What does Binance say?

Like NEPZA, Binance has not made it clear what a virtual free trade zone is or what the proposed partnership with Nigeria might look like.

When I contacted the crypto exchange, she said, “Binance is keen to work with the Nigeria Export Processing Zones Authority to establish a virtual free trade zone to generate long-term economic growth through digital innovation. We look forward to sharing details when this is planned to be completed.”

For more information on what the partnership and the Virtual Free Zone could entail, I also reached out to a blockchain expert who chose to remain anonymous. The expert said that the news that NEPZA is looking to partner with Binance could be something exciting or just an attempt by the government agency to gain some media visibility.

Let’s take a look at Binance’s previous partnerships

According to NEPZA, the Virtual Free Zone would be similar to the Dubai Virtual Free Zone. After searching the internet for a Dubai Virtual Free Zone and not finding any, I discovered that Binance had agreements with Dubai, but it had nothing to do with a Virtual Free Zone.

One of these is an agreement with the Dubai World Trade Center Authority to set up a global virtual assets industrial hub.

According to Binance’s official announcement, the aim of the agreement was to “support crypto exchanges, companies offering blockchain and distributed ledger technology (DLT) services, as well as a wide range of digital currencies and assets to be licensed in Dubai.” .

While this could be the NEPZA and Binance partnership, the question remains how to create a place to trade virtual products or assets that are available to anyone anywhere on the internet.

Combine blockchain with shipping?

Source: PwC

Crypto trading is not the only application of blockchain technology; It has applications in other sectors such as identity verification, governance, and logistics.

According to PwC, interest in blockchain-powered supply chain and logistics is increasing. Blockchain can help create digital records that can track goods at every stage of the supply chain. These digital records, just like crypto transactions, will be open and immutable to all.

While the participation between NEPZA and Binance sounds interesting, only time will tell if this is a media stunt or something to look forward to.


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