Itana: Pioneering Nigeria’s Digital Free Trade Zone for the New Economy

After a prolonged period of instability, Nigeria’s currency began showing signs of steadiness in early 2025, sparking cautious optimism among investors and entrepreneurs. This newfound stability has been a pivotal factor for Itana, a privately operated digital special economic zone (SEZ) aimed at fostering innovation by attracting tech startups, service-oriented firms, and international investors.

Nkechi Oguchi, Itana’s Chief Community Officer, highlights a significant shift in investor behavior: “When investors and founders decide to visit Lagos in person, it signals genuine interest and confidence.” Over the past year, inquiries have evolved from mere curiosity to active on-the-ground assessments, aided by streamlined visa processes and a more transparent foreign exchange (FX) framework.

Reimagining Free Zones for the Digital Era

Nigeria hosts between 42 and 52 licensed free economic zones, yet only about 22 are operational. Many older zones, such as the Abuja Technology Village Free Zone (established 2007), Olokola Free Trade Zone (2004), and Centenary Economic City (2014), were conceived during periods of robust economic growth-when Nigeria’s GDP expanded at an average annual rate of 6-7%, sometimes even surpassing 10%. However, these zones have struggled with incomplete infrastructure, limited activity, and governance challenges.

Unlike these traditional zones, which primarily serve capital-intensive sectors like oil, gas, manufacturing, and logistics, Itana is tailored specifically for startups and service-based enterprises. Oguchi explains, “Itana is built intentionally to support businesses that thrive on agility, virtual operations, and scalable tech ecosystems.”

For example, Circular Energy, a sustainable energy startup specializing in Battery-as-a-Service, relocated to Itana in 2025. CEO Varun Giridhar notes, “While registered in the zone, we operate mainly from Lagos Island, which saves us significant commuting time and enhances operational efficiency.”

Itana operates under the Nigeria Export Processing Zones Authority (NEPZA) framework, a legal structure established over 35 years ago that provides regulatory stability across successive governments.

Drivers Behind Itana’s Rising Popularity

The zone’s appeal is fueled by three main groups: Nigerian diaspora entrepreneurs returning home, foreign founders and investors, and local startups seeking a more predictable business environment. Oguchi reveals that nearly 50% of companies in Itana are diaspora-owned, with about 25% led by foreign stakeholders.

“There’s a growing trend of returnees who see Nigeria’s improving stability and potential,” Oguchi says. Foreign investors appreciate Itana’s transparent FX policies, which allow for easier capital inflows and outflows. Giridhar adds, “The ability to repatriate funds and hold multicurrency accounts reduces investment risks and builds investor confidence.”

To further boost engagement, Itana organizes “Doing Business in Africa” tours, which offer curated experiences for investors to explore Lagos’s tech ecosystem. The inaugural tour hosted a single participant, but by October 2025, the event attracted 15 investors, with more planned for the coming months. These tours have already led to tangible outcomes, including a foreign investor hiring 80% Nigerian talent for his global team after witnessing the local workforce’s quality and cost-effectiveness.

Comprehensive Incentives Tailored for Digital Enterprises

Itana’s incentive package is designed to address common pain points for startups, especially regarding foreign exchange and taxation. Companies within the zone can maintain multicurrency accounts, invoice clients in any currency, retain earnings indefinitely, and repatriate 100% of their capital upon exit-an exceptional advantage in a market often constrained by FX shortages.

Oguchi emphasizes, “This flexibility makes companies more attractive to global investors.” Additionally, businesses benefit from exemptions on several federal and state taxes, including:

• Corporate Income Tax (CIT) of 30%
• Value Added Tax (VAT) at 7.5%, including on imports
• Withholding Tax (WHT) ranging from 2.5% to 10% on various payments
• Capital Gains Tax (CGT) at 10%
• Tertiary Education Tax at 3%

Duty-free importation of equipment and tools further reduces upfront costs, facilitating smoother scaling for early-stage companies.

Itana also simplifies regulatory compliance by acting as a single point of contact for multiple government agencies, including the Corporate Affairs Commission, Federal Inland Revenue Service, immigration authorities, and the Central Bank of Nigeria. This consolidation significantly reduces bureaucratic delays, especially for fintech firms that typically require multiple licenses.

Plans are underway to develop a dedicated physical district within Itana, equipped with reliable power, high-speed internet, security, and collaborative spaces-elements Oguchi compares to the foundational pillars of Silicon Valley’s success.

Evaluating Itana’s Potential Against Traditional Free Zones

Nigeria’s free zones have attracted over $30 billion (₦43.5 trillion) in investments and generated ₦650 billion ($448 million) in government revenue, primarily from manufacturing and oil-related sectors. However, some startup founders express skepticism about whether Itana’s digital-first model can replicate or surpass this success.

One anonymous founder remarks, “Free zones have historically favored capital-heavy industries, not startups reliant on talent and cloud infrastructure. The upcoming Lagos government transition in 2027 also adds uncertainty.”

Babatunde Akin-Moses, CEO of Sycamore, a peer-to-peer lending platform, concurs that free zones were originally designed to boost exports and may not fully align with the needs of digital enterprises. He questions the practical value of FX benefits, noting, “It’s still the same Central Bank of Nigeria policies, and unless your tax liability is substantial, the incentives may not be impactful.”

He also points out that many Nigerian tech professionals already work remotely for foreign companies without relying on free zone benefits, suggesting that the advantages for digital businesses remain unclear and under-communicated.

Conversely, Giridhar highlights Circular Energy’s capital-intensive operations, which benefit from Itana’s structure. “Being on the ground in Nigeria enables us to tailor solutions to local challenges, and the free zone framework facilitates international investment,” he explains.

Oguchi stresses that Itana’s success metrics focus on digital economy priorities: revenue growth, job creation, talent export, and improved startup survival rates. “Our goal is to make Itana the most conducive environment for startups to thrive, with easier access to funding, faster licensing, and stronger partnerships.”

She acknowledges commuting challenges but notes ongoing infrastructure upgrades aimed at reducing travel times and enhancing accessibility.

Managing Risks While Fostering Growth

Oguchi candidly admits that while Itana cannot eliminate all risks, it significantly mitigates many common challenges. Regulatory uncertainty is reduced through NEPZA’s longstanding legal framework and active government engagement. Infrastructure risks are addressed by the development of a dedicated district offering stable utilities and security. Currency exposure is minimized by allowing multicurrency operations and capital repatriation, while operational burdens are eased through Itana’s centralized compliance services.

Nonetheless, macroeconomic factors such as policy shifts, economic volatility, and global tech funding fluctuations remain external risks beyond Itana’s control.

Unlike traditional free zones that often functioned as isolated enclaves, Itana encourages integration with Nigeria’s broader economy. “There are no restrictions on doing business with entities outside the zone,” Oguchi affirms.

Ultimately, Itana’s impact will be measured by its ability to convert economic stability into sustainable company growth, increased foreign investment, job creation, and meaningful integration of digital enterprises within Nigeria’s economic fabric.