In this article, Uwem Ankak sheds more light on the designation of Onne, Warri and Calabar Ports as the only points where oil and gas cargoes could be loaded and discharged and the furore over the concession of the ports to Intels Nigeria by the Nigerian Ports Authority
On March 7, 2017, the Snake Island Integrated Free Zone (SIFZ), Lagos Deep Offshore Logistics (LADOL), and two other companies published an advertorial in a national newspaper wherein they listed what they termed as flaws in the current attempt by the Nigerian Senate to amend the existing laws covering the administration of the Oil and Gas Free Zone and strengthen its performance. In the advertorial, they tried to undermine the amendment process by insinuating, among other things, that the Bill, when amended, would make the Oil and Gas Free Zones (OGFZA) a monopoly; bring the two separate agencies in the free zones, The OGFZA and Nigeria Export Free Zone Authority (NEPZA) into conflict; and erroneously argued that such amendment would harm the Economic interest of Nigeria.
And, in a seeming response, the OGFZA has equally published a rejoinder in some national dailies where they have set the record straight by responding to the issues raised in the March 7 advertorial. In it, the Authority has elucidated on those contentious points and drew the attention of the Nigerian Senate and the entire Nigerians to the anomaly which had existed in the operation of the Oil and Gas Free Zones and the need to streamline them to be more beneficial to the Nigerian Economy. In fact the points were adequately marshalled during the public hearing called by the Senator Abubakar Gobir-led Committee on Trade and Investment where most stakeholders were present and made inputs.
For instance, the contentious issue of monopoly which LADOL and co are canvassing is misplaced. The position is that the initial Bill had designated Onne Port, Warri Port and Calabar Ports as the only points where oil and gas cargoes could be loaded and discharged. These are Ports which were concessioned to Intels Nig by Nigerian Ports Authority, and this arrangement is one of the points OGFZA is very opposed to, and it was one of the points in its memoranda to the Senate Committee on Trade and Investment, for the simple reason that it would harm competition, impede the ease of doing business and generally run counter to the ongoing economic reforms of government. It should be noted that other Stakeholders present at the public hearing equally agreed that the provision should be expunged from the Bill. So, by continuing to push the argument of monopoly by Ladol and co, is merely begging the issue.
Equally, the Stakeholders led by SIFZ, LADOL are also seeing conflict in the operation of OGFZA and the NEPZA Acts. What they have not told the reading public is that the Acts are also being reviewed by the National Assembly. The point is that the amendment is targeting the strengthening of both Acts to get rid of any imperfections and overlap that were noticed in the operations of the two agencies. For instance, the OGFZA is specifically mandated to regulate the operations of hydrocarbons (oil and gas) while the NEPZA has responsibilities to grow the free zones for non-hydrocarbon businesses for the overall interest of the national economy. The two enabling laws are to be amended to play their roles as effective and efficient agencies of government.
On the insinuations that the OGFZA Bill if passed would harm the Economic interest of Nigeria in the Nigeria Ports Authority, NEPZA, Consumer Protection Council, Local Development, etc, the claim cannot withstand serious scrutiny and any business logic, given the changes suggested by the OGFZA and other stakeholders at the public hearing. Even the NPA, the Association of Nigerian Exporters and others all came to the conclusion during the public hearing that amending the laws covering the operations of OGFZA in regulating and managing the oil and gas free zones would attract more investment, create more jobs and generate more revenues to government. It is the belief of most conscientious stakeholders that strengthening OGFZA would more than tripled its records of having created more than 200,000 direct and indirect jobs and attracting more than $20 billion in foreign direct investments from inception when the first oil and gas free zone opened for business at the Onne Port in the year 2000.
It is clear from the foregoing that the so-called flaws which publishers of the March 7, 2017 advertorial saw in the principal Act establishing the OGFZA are almost the same which the Nigerian Senate is working hard to correct. It is therefore ironical that the same people are the ones who are attacking the same law making organ of government to effect the necessary changes to strengthen the same law they are complaining about. It should be an opportunity for those who are concerned about the flaws in the law to send in their suggestions for correction or make representations to the Senate Committee on Trade and Investment who are handling the amendment.
It should equally be known that no law is perfect and subject to review from time to time. The Free Trade Zone is a latter day economic concept which many countries with comparative advantage in certain products and services, have employed to energies trade and investment with the concomitant benefits in creation of massive jobs and huge inflow of capital. These are success stories in countries like United Arab Emirate where Dubai has become the hub of free trade zone capturing the big businesses in the Middle East and beyond. It is the same in Malaysia, Singapore, China, among many others, where trade incentives and operational fluidity have turned those economies to high scale ones with serious impact on investment and employment opportunities for the citizens.
Most important, there is always remarkable transfer of skills to the citizens through manpower training. Nigeria, with unrivalled strategic position in West Africa, considered an ideal location from which to establish a distribution hub to service the oil and gas projects (on-shore and on-shore) throughout sub-Sahara Africa, is at an advantage to reap the bounteous benefit that accrue to it, in terms of Foreign Direct Investment (FDI). So far, the OGFZA has licensed over 200 companies to operate in the zones, including international energy companies representing 45 nationalities.
The OGFZA led by its new Managing Director, Obong Umana Okon Umana, a seasoned Economist and administrator, by seeking amendment to the old law which was enacted in 1996, wants to leverage on the benefit of having a vibrant free zone to unleased the economic benefits that accrue to oil and gas free zones. His reforms agenda, captured in the roadmap which has been released by the Authority has provisions to ensure that there is ease of doing business, a tax-free operation, 100% ownership and repatriation of profit and dividend, waivers on pre-shipment inspection of goods, faster clearance of goods and round- the-clock operations. These are lofty reforms initiatives that are capable of bringing vibrancy to the economic activities of the Zones.
Of equal importance is the fact that the Bill when amended, rather than impede the smooth operations at the free zones will, from the content of the amendment proposals sent to the National Assembly will correct the flaws that tends to slow the working of the OGFZA. Investors, it should be noted, are at liberty to invest their money where there is the promise of return on investment, and in a system that guarantees the safety of the investment as well as where the tariffs are right, where operations are automated, and where service delivery is fast. And, where the system is not perfected to give them business confidence to invest, there is the risk of their taking their money to a friendlier environment. That is what the amendment to the Act establishing the OGFZA, and the proactive reforms put in place by the new management seek to achieve.
It is therefore really inexplicable to begin to situate the divergent views expressed by stakeholders in the effort of the OGFZA and the National Assembly to strengthen the operation of the oil and gas free zones to bring in the massive benefit derivable therefrom. The laughable insinuation that such amendment would impugn on the integrity of the National Assembly or the fact that it will bring the operations of the two sister agencies at loggerheads can only be taken from the prism of the undisclosed intention of its proponents.
The complaining stakeholders, some who are nationals of structured business climes cannot, and should not be allowed to continue to dictate to how they want our businesses and more specifically our business regulatory environment be tailored. They should, instead of disrespecting our institutions in trying to bring our businesses up to date, should advice on how to strengthen laws for mutual benefit. Denigrating our National Assembly for trying to amend a law to make institutions of government more responsive to the yearning of the oil and gas sector is, to say the least, very disheartening.
