Special Economic Zone

Building Africa's First Digital Free Zone: Luqman Edu, CEO Itana, on the Charter Cities Institute Podcast

March 1, 2024

"What would it take to create the ideal jurisdiction for global tech companies to be able to grow and scale in Africa?"

Luqman Edu, co-founder and CEO of Itana, joined Jeffrey Mason on the Charter Cities Institute podcast to share some behind-the-scenes stories of building Africa's first Digital Free Zone.

This podcast episode was originally published on the CCI Website

Episode References

Join the Itana 100

Luqman Edu on LinkedIn

The Itana website

Charter Cities Institute



Kurtis Lockhart: Welcome to the Charter Cities Podcast. I’m Kurtis Lockhart. On each episode, we invite a leading expert to discuss key trends in global development in the world of cities, including the role of charter cities and innovative governance will play in humanity’s new urban age. For more information, please follow us on social media, or visit chartercitiesinstitute.org.


Jeffrey Mason: I’m Jeffrey Mason, head of research at the Charter Cities Institute. Joining me on the podcast today is Luqman Edu, cofounder and CEO of Itana, Nigeria’s first digital free zone. We chat about Itana’s ambitious plan to become the Delaware of Africa, where the leading entry point for entrepreneurs, and companies in tech and financial services to do business in Nigeria and across Africa. We discussed what Itana is doing in terms of community building, policymaking, and infrastructure to realize that goal. For those interested in doing business in Itana, you can find a link to Itana 100, a special offer for Itana’s first 100 companies in the show notes. I hope you enjoyed today’s episode.

Hi, Luqman. Thanks for coming on the podcast. Good to have you.

Luqman Edu: Yeah, thanks for having me.

Jeffrey Mason: So you are the cofounder and CEO of Itana. What is Itana?

Luqman Edu: Yes. Itana, what we’re trying to do is that we’re trying to create the ideal jurisdiction for global tech and international companies, or service-oriented companies to be able to scale into Africa. At the same time, also enable Nigerian startups and service companies to be able to scale across Africa. We are making ease of business, and creating an ideal jurisdiction that tackles taxation, banking, immigration, and even an ease of incorporation. Also ease of access to community, for anyone seeking to set up and operate in Africa, but starting with Nigeria.

Jeffrey Mason: Even on some of the topics, could you speak more to some of the challenges the startups and other companies face when trying to do business in Nigeria or in Africa, more generally?

Luqman Edu: I think the initial start right is their perception of risk. I think that the opportunity in Africa is not something I need to go into. I think it’s quite obvious that Africa is the right the market, for new business to come in. But I think that it starts with even understanding how to work in Africa, where the risk that is perceived in working in Africa. After you get through that hurdle, the next day, is even just setting up your business, and all the licenses, and all the red tape that is there to set up and operate in Nigeria and Africa as a whole. We start with some of the policy issues, some of the infrastructure issues. So not just policy wise do we have challenges, but even lack of infrastructure. It’s a lack of information to operate in Africa.

I think those are the big buckets of challenges that we hear when companies are interested in coming to Africa. I think it’s partly why many companies don’t set up and operate in Africa. That is essentially what we are trying to solve for, that anyone around the world that isn’t in the sector, which is I said digital, financial, and service businesses to be able to go on to computer, incorporate your business as a free zone business, a free zone entity. What that means is that they have these own separate laws when it comes to tax, banking, immigration, and such to set up a business, be able to open up a bank account, be able to stay compliant to the Nigerian laws that applies to them. At the same time, have the information to set up to operate your business. Whether it’s access to talent, access to infrastructure, and such. I think that’s where I’ll stop for now.

Jeffrey Mason: You mentioned how Itana as being organized as a free zone. Now, folks who might be familiar with free zones in Nigeria will know that the free zone laws that have sort of been on the books for a number of years. They’re geared towards an industrial park, export processing zone sort of model. In becoming Nigeria’s first digital free zone, as opposed to sort of more traditional free zone, what are some of the steps you’ve had to take from a policy legal perspective to make Itana a proper digital free zone?

Luqman Edu: I’ll say that this is always something that is going to be ongoing. I wouldn’t say that we’re at the final finish line yet. But I can talk about what we’ve been able to do so far and maybe touch on some of the things we’re also looking at, or also engaging the federal government on. The first thing that we’re able to do is actually be able to take the law that managers free zones, to enable what Nigeria call virtual free zones to be able to exist. As you have already touched on that the laws that before we came on board, free zones were considered to be co-spaces. So for oil and gas businesses, for manufacturing and such, so they ended up in food industries.

In the 21st century, we’re seeing more remote work, we’re seeing more companies being able to operate in a new area without physical presence. This is all due to the expansion of the Internet. The first thing we’re able to do was to get the law passed to allow the agency that manages free zones to be able to allow private sector setup digital free zones. They call it virtual free zones. That was the first law that we worked on. To go into more detail, [inaudible 0:05:50] management companies, but I don’t think that’s necessary. I don’t need to go into the nitty gritties of that.

That was the first thing that we’re able to achieve, that was done a while ago, maybe a year and a half to two years ago. Since then, but also successfully been licensed as the first virtual city zone management company. It enables us to essentially license businesses to operate from our zone. That was done sometime last year. The benefits that we have been able to secure now, and I said, this is always going to be an ongoing process. But the benefits I’ve been able to secure now is that we’re unable to incorporate businesses at the fraction to what typical businesses in the free zone would have to pay. I think that right now, typical businesses, and free zones pay upwards to $10,000, $20,000, which is an annual fee to operate in a free zone, while we would be offering our free zone business license at about $1,500. So almost 1/10th of the cost to have a business license in the free zone.

The second part that we’ve been able to do is that law, it says that, again, because the way the law is written, it expects you to invest in physical land, in a free zone. That’s a second layer of investment that is required to operate a free zone in Nigeria. Being a virtual free zone, obviously then, also takes that away. So the cost factor of setting up, again, this is specifically for businesses in our sector, which is obviously digital financial service-oriented businesses. On the cost factor is the first data we’ve been able to achieve by creating this lower cost product.

This, at the same time, obviously then doesn’t expect you to import and export goods. We’re only playing in the service space. With that license, businesses are enabled to operate as a free zone in Nigeria, with the application of the African trade union laws, also operate with this vehicle across Africa. What that means is that, you have tax incentives on corporate income tax, on VAT, on tax on dividends. You don’t have expatriate quarters, and special visas for people that want to immigrate into Nigeria. There’s special benefits you get in banking, which also gives incentives and makes it easier for capital repatriation out of Nigeria. So sending your money back out.

Again, you can also operate in international currencies, which is illegal in the customs here in Nigeria. So that helps with the fluctuation of prices and the volatility when it comes to currency, that as a free zone, and propriety, you can actually operate with using dollars. Which obviously, right now, is something that is very much in the news when it comes to the challenges we’re having in Nigeria with [inaudible 0:08:46].

Jeffrey Mason: Beyond, obviously, the licensing fee, if it’s a foreign business, are there any other requirements for being able to operate in Itana?

Luqman Edu: As I said that, there will be checks to ensure that you are in the right sector. Apart from that, what we’ve done is that we’ve also, obviously, part of the Itana product is to create that one stop shop that is integrated with the government services that you can. It’s the typical things you would require to set up a business anywhere where you’d have to fill out all the different forms to set up a new business in the zone. Obviously, there would be a level of KYC that will be required. There are other challenges that I guess that will be faced that we’re still working on, so it’s still allowed. So as we are trying to make other processes easier when it comes to things like banking and stuff like that. But as of now, I want to say that there are further hurdles that you would be required to share that you would expect in setting up a business anywhere else. But then, obviously they will require some more information to ensure that people aren’t taking advantage of this, and working in industries that are not allowed in our zone.

Jeffrey Mason: You also do have this clear digital first, I think strategy, but you do also have a physical campus, the lucky free zone outside of Lagos. What is the goal for the physical campus for Itana that you guys have?

Luqman Edu: I think that Itana, we’re kind of like taking a very holistic vision on this challenge that we’ve taken on, where we are not just from a digital perspective. We’re trying to enable ease of business in Nigeria and Africa. I think that for us to truly do that, we need to solve for all the problems that people face, trying to operate and scale. Also, how to set up globally competitive business from Africa. You’re correct, we are started off tackling the policy, tackling technology to create ease of business. But as businesses start to scale their operations in Africa, then more people will be required to be into jurisdiction. There’ll be some employees and stuff like that you would have to acquire.

Also, there’s a huge pool of talent in Africa that hasn’t been unlocked yet, that can provide value globally to tackle this problem of ease of business, and transfer of talent across borders. We can’t do that without solving for the problem of infrastructure. As a value add to Itana, what we’re doing is that we have gone into partnership to actually set up a physical district, where remote workers, entrepreneurs, backyard workers of major corporations. So people that can work remotely can work from making sure that we provide the ideal infrastructure and that space to enable that so that these companies aren’t handicaps when competing globally.

As I said, so we’re being very ambitious with the plan, and we’re building this ideal city for tech, and remote work in Nigeria. That’s like a free trade zone, which is about an hour from the Lagos City Center, is very strategic, where we’re about five minutes from the new international airports. There’s sea water and now air transportation to come to the district. We’re building this in [inaudible 0:12:01], and we’re just finalizing some of the agreements to unlock the financing for this project. But quite a bit of money has already been invested in so far. As I said, it will be a network built, a network district where it will be designed from scratch, designed to optimize for remote work, and tech work from Africa.

Seven hectares is going to cost somewhere around $500 million, so it’s quite ambitious. But as I said, we’re on the final stages of unlocking some of the financing to start this project.

Jeffrey Mason: That’s exciting.

Luqman Edu: Yes, and you will meet global expectations, when it comes to the sustainability factor, and the level of infrastructure when it comes to Internet, when it comes to power, when it comes to water that you would expect anywhere else in the world.

Jeffrey Mason: About how many residents would it be able to support in your plans.

Luqman Edu: I think that we’re working to be able to have at least 2,000 people to be able to live permanently on the site. Again, we’re starting with seven hectares. But this district can be scaled further. We are in a position where we’re able to acquire more land, and scale the project. We are expecting, again, because of how close we are to the Lagos City Center, we also expect a lot of short-term traffic visitors. I’m building a district to be able to operate at full capacity, to take up to 5,000 people or such. But then, we’re creating accommodation for about 2000 people at any one time.

Jeffrey Mason: Okay. Now, obviously, construction sounds like it’ll hopefully be starting soon. Looking back to the digital side, what can you say about progress to date in terms of companies licensed and operating within Itana?

Luqman Edu: Yes. We’ve launched our Itana 100. What we’re doing is we are enabling the first 100 companies to come into the zone now. This is like our pilot phase before we do our global launch somewhere in Q2. Right now, we have started the process of giving the first 100 companies their business license. You can check the Itana 100 page, hopefully would share the website to do that soon. Or we’ll find out how to share that to the people that are watching this podcast. We are accepting the first 100 companies. The first 100 companies will be able to get a business license and open up a bank account. With that, you can start operations in Nigeria with an MVP level of incentives and policies that we now have already. That’s where we are now, we’re live.

I think that we’re live now. Our tech app, I think will be launched sometime in Q2, where the actual portal will be available to people to even operate and get access to our vendor marketplace to get access to other services that are required to operate a business in Nigeria. This is regarding access to law firms, access to advisory firms, access to accounting firms, and such. Also, access to the community. Getting access to talent, getting access to other services, and other vendors that could enable your business to operate in Nigeria. Again, the awesome advantage. They can be sitting in New York, or Singapore, or wherever, and operate a full-scale service business in Nigeria, without having stepped foot into Nigeria and get access to the talent, which is also something we’re really excited about.

Jeffrey Mason: This sounds great. The Q2 is coming up fast, it’d be really great to see once this launches in full. Itana is organized as a digital free zone. There are some comparable efforts in various places, maybe Estonia, Dubai, maybe come to mind. What are the examples that Itana is leaning most heavily from as you move forward, integration of Nigeria’s first digital free zone?

Luqman Edu: So I think that every jurisdiction is different. We have done a lot of research and picks things that make sense to us here in Africa. I wouldn’t point to just one zone, and say, “Hey, this is who we are, and this is the African version of this. But I’ll tell you, the main examples that has been pivotal when we were designing this idea, and we did a lot of research on the Estonia products. We did a lot of research on Prospero in Honduras. Also, obviously, a huge part of our market will be coming from America. We’ve also done some work on Delaware.

Tagline, when people ask us what we’re doing, and rather than giving them the five-minute, ten-minute version, sometimes, we just call ourselves Delaware for Africa. Even though, Jeff, if we’re talking truthfully, obviously, Delaware isn’t really a digital free zone, but it acts like one for most of the tech startups across the world. Tagline sometimes that we use as a Delaware for Africa. But I’ll also say that we have picked a lot of stuff from Prospero in Honduras. I think that the policy or the framework that we’ve taken is quite similar to the Prospero Approach, even though we have learned some things to optimize from there. But Estonia, and Delaware, are also good examples of places we’ve been able to learn from when we’re designing this out.

Jeffrey Mason: Having a background, I can see the blended elements there. I think as the continental free trade area in particular comes online, can especially see with the way Estonia is for the access to the EU. Itana can play that role for Africa. Now, I know that Itana is leading on a digital free zones’ initiative more generally, in Africa, that CCI, along with PWC, Africa Finance Corporation, and Future Africa are also involved. So beyond Itana itself, what does the future look like for digital free zones in Nigeria more generally.

Luqman Edu: In Nigeria, I think that for at least the short to mid-term, we will be the sandbox, or the go-to free zone for this ecosystem. But we also see, there are people across the continent. I think Kenya is trying to do something. I think Rwanda is trying to do something. Sorry if my information is incorrect. Apologies. That are not designed holistically a digital free zone, even though they’re built for similar sectors. We are seeing people, obviously, other countries picking on to the same idea, which is awesome, because this provides opportunities for collaborations and cross-border partnerships on digital free zones in Nigeria, and in those other countries in the continent.

I think that, one of the futures of digital free zones, I think that it always starts with regulations and policy. That there’s always more policy developments that could be approved or could be put into law that continuously optimize these free zones, to be globally competitive. We’re working very closely with the federal government, we do have a proactive federal government, which is great to continue to address some of the things. We’re continuously looking at optimization when it comes to taxation. We’re continuously looking for abilities for global banking to happen in Nigeria.

Enabling global banking in Nigeria, and global banks coming to Nigeria, especially in the digital free zone. We’re continuously looking at immigration challenges when it comes to processes, but also even visa policies to enable this. We’re continuously building digital infrastructure. Right now, we have successfully integrated for the business licensing, and we’re currently working on the banking side. But there’s so many other agencies and stuff that would make work easier if it’s all done in one platform. If we talk about the FinTech space, there’s certainly a lot of FinTech licenses and stuff that requires. Now, we’re talking locally. So being able to enable this stuff on one platform, and being able to manage your tax, and your licenses on all one platform is the future.

By a bigger picture of where the future goes is, again, back, I said, looking at the application of the AfCFTA, the Africa Trade Union Agreement laws, where businesses can incorporate once Itana, and use this vehicle to operate the businesses across Africa. So using the same vehicle to do business in Ghana, in South Africa, and Rwanda, in Morocco, or where across Africa. And it being recognized to be able to get local licenses, local immigration, abilities and such like that. I think that our approach is obviously, we want to get Nigeria right first. It makes sense, Nigeria being the biggest economy in Africa. But then bigger picture is to create that connection with other African continents.

Jeffrey Mason: Yes. When we’re talking about how Itana works with the government in Nigeria. You’re a private project, it’s not formally a PPP. But it seems like the working relationship is quite good. Most of the things that, the terms of policy and what you’re able to do, does most of that have to go through as you move forward through the legislative process? Or are you able to work with the zoning authority and other regulatory bodies to update what you’re able to do over time?

Luqman Edu: I think that we need to work with both. Everything we do, we create stability to give investors confidence, to ensure that all the policies that we get passed is applied into law into Nigeria. So that level of comfort to investors raise their stability in our zone. But then there’s some things that you’re right at. I think it’s the way the law is in Nigeria, it’s where some things are to do with free zone authority. Some things are to do with Nigeria as a whole. Right now, I think that that’s where that foundation stage Itana, a lot of the work we’re doing is with Nigeria as a whole, so the Nigerian federal government. And making sure laws are passed, regulations are passed that solidifies the existence of digital free zones in Nigeria.

I think that will always be an ongoing basis, because things like taxation, things like immigration are to do with the federal government, a lot of things that we can tackle [inaudible 0:22:09] level. It also, again, gives a stronger foundation to the existence and the continued existence of these business incentives.

Jeffrey Mason: You’ve previously worked in the gov tech sector. How does that experience having been at the private side, you’ve been to the public side? How does that experience, how does that shaped decisions you’re making and how you’re going about building a Itana?

Luqman Edu: Obviously, being on the other side, right now, we’re building the platform. Being on the side and being, say, a user of these policies and stuff. It has given me a stronger picture on what companies face when trying to operate in Nigeria. I think that our experience has been helpful in understanding the challenges we need to solve for when it comes to infrastructure and policy. Even getting – even just bureaucracy is trying to get some sort of licenses, and bank accounts, and such in Nigeria. I’m even local, so I can’t imagine with how it looks like for global firms try to do the same thing.

I think that’s a part of, obviously, the value that I bring is understanding and making government a partner in this project. As somebody wiser than me that was said, that the best way to make something sustainable, is to make sure everyone’s benefiting from it. I think that is one of the reasons why this has been very favorably accepted by the federal government, and solidifies the longevity or the long-term existence of this free zone. Is the way that partnership is set up, where the government clearly identifies why this is valuable to Nigeria. And why this is important to the economy of Nigeria, when it comes to enabling foreign direct investment into the country, enabling employment by enabling local talent to be employed by global firms. Enabling local startups to be able to grow and thrive across Africa. I think that my experience has been able to prepare me to be able to present this in a way to the federal government, which has then made them very proactive in ensuring that this project works for the sake of the country.

Jeffrey Mason: I think the focus on securing buy-in and the long-term, I think stability for being able to continue and build on Itana is particularly important. Because we’ve seen other projects, right. You mentioned Prospero for example, which is a really interesting novel approach what they’re doing. But it’s been messy for them with attempted repeal of sort of their operating law. I think it’s encouraging the steps you guys have taken to ensure that the government is supportive and sort of incentives I think are both aligned for the long term.

Luqman Edu: You’re making sound easy, the ideas.

Jeffrey Mason: Sure, of course. That’s actually an interesting point. Itana has now gone through one administration to the next. Same party, but still a change of administration. I think every everyone is still, “Let’s go. There’s no claw back or anything like that.” I think that’s a great first step, thinking about the long-term.

Luqman Edu: I’m impressed with your local, political knowledge of Nigerian politics, by the way.

Jeffrey Mason: Thank you. The Nigerian economy, of course, is heavily dependent on oil. But tech has become an increasingly important part of the economy. We’ve kind of explain how Itana can maybe bring in these companies. But what is the broader, I guess you can say, diffusion of Itana into the broader national economy? What does that look like, as tech becomes more and more important to the Nigerian economy?

Luqman Edu: I’ll approach this question a little differently, not even approach, is looking at the success factors that we’ve seen from Nigeria when it comes to the tech ecosystem. We’ve seen unicorn, not many, or we’re starting to see unicorns from Nigeria, [inaudible 0:26:09]. I’ve seen the likes of flutterwave. I have seen the likes of Paystack, and Della, and such come from Africa. Those were certainly stories that we took on when we started to think about the reason, or the importance of Itana, is to be able to enable dozens of unicorns to be able to – dozens of startups to be able to reach that unicorn level. That comes with massive, massive effect to the economy, massive effect to employment, and such.

Folks, I can first talk about the benefit, or the purpose, or the reason why Itana is important from that perspective, is to see more success stories from Africa. More unicorns coming from the country, which we definitely have the talent to be able to do such. If we solve for the challenges, we do believe that this story of tech on the affected economy will be evident. So yes, now, touching a bit on the question you asked and the way you probably intended me to answer the service space. We are seeing success. We’ve seen the success, and almost this leapfrog approach when it comes to Nigeria and banking.

Nigeria have some of the strongest banks in the world as of now. When it comes to mobile infrastructure, with the developmental approach of fiber in the country, and how fast the Internet is growing in Africa and Nigeria, specifically. We are seeing the other factors and other industries, similar industries that have taken this very accelerated approach to growth. When it comes to the wider picture, yes, Nigeria like every other country is on this very intentional approach to trying to get away from the reliance on oil and gas. But then, that’s very, very fast growth when it comes to the service industry. I think that with things like Itana, we can see that growth even more accelerated.

Jeffrey Mason: One, maybe speed bump on that journey is, we’re not in the low interest rate world anymore. That’s hitting a lot of the service sector, globally, particularly hard. How has that to the extent that maybe it has or hasn’t, how has that impacted Itana or your strategy going forward?

Luqman Edu: I don’t think that we’re being impacted as much. Again, we are in the free zone, so we operate in dollars. Most of the companies we’re talking with are obviously companies global, setting up some kind of subsidiary, or whatever it is in Africa. I don’t think that, of course, interest rates is going to affect, especially on the infrastructure side, the cost of infrastructure when we get to that. But I don’t think that our project is severely exposed to interest rates and things like that in Nigeria.

Jeffrey Mason: That’s good to hear. One final question, looking ahead, say 10 years, or maybe even to say 2050. Looking back, what does success look like for Itana?

Luqman Edu: I think success for Itana looks like success for Africa, where we would see Nigeria and Africa, and digital and financial companies’ birth from Africa, set that place in the global world. So we see digital financial companies both from Africa, and competing globally. Yes, I think that is the ambitious, what success looks like for Africa and for Itana.

Jeffrey Mason: I can say that the Charter Cities Institute is happy to be a partner of Itana, and the digital free zones initiative. We’re going to do our best to help you guys make sure Itana gets there. We’re excited that everything that we’ve done so far. We’re very excited about continuing this partnership into the future. I’m super excited about the full launch coming later this year. So folks, stay tuned, because it’s going to be exciting.

Luqman Edu: Just to finish. If anyone interested in obviously joining the Itana 100, I found the website, www.itana.africa/100. I think that’s where you can find more information on Itana 100. Look forward to people joining us.

Jeffrey Mason: I hope we’ll be able to say at least a couple of the Itana 100 came because of this podcast.

Luqman Edu: Yes, I hope so.

Jeffrey Mason: Thanks for joining me today, Luqman. It was great chatting with you.

Luqman Edu: Thanks for having me.


Kurtis Lockhart: Thanks so much for listening. We love engaging with our listeners, so please always feel free to reach out. Contact information is listed in the show notes. To find out more about the work of the Charter Cities Institute, please follow us on social media, or visit chartercitiesinstitute.org.



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