Nigeria to Earn $200bn from Lekki Seaport as FG Earmarks N90bn for Economic Zones

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Eromosele Abiodun

President Muhammadu Buhari has expressed commitment to a conducive business environment that would aid investments in the country even as it emerged that Nigeria is expected to rake in over $200 billion from the operations of the Lekki Deep seaport in Lagos State.

Speaking at the official commencement of the construction of the Lekki Deep seaport in Lagos yesterday, Buhari said the project is in line with the Economic Recovery and Growth Plan (ERGP) whose aim is to support game-changing infrastructure projects.
The president, who was represented by Vice President Yemi Osinbajo, said when completed, the project would generate up to 170,000 direct and indirect jobs in the economy.
According to him, “The promoters of this project are targeting about 1.5 million 20-foot equivalent units container capacity annually, which we expect to grow to about 2.7 million and 4.7 million TEUs when the project operations commence. With this, the Lekki Deep seaport will become one of the largest deep water ports in our region and serve as a hub for port operations in West Africa.

“The promoters also planned to dredge the port channel to about 16 metres draft, which is not currently obtainable in any port in the country. This is an indication that ships of larger capacity, Panamax, Post Panamax ships and very large crude carriers will now be able to visit the port, and greater efficiency and economies of scale will generate significant revenue for Nigeria’s economy.”

Osinbajo, however, noted that the federal government had in the past two budgets provided an aggregate of N90 billion for the development of special economic zones, adding that the deep seaport project is in line with the objectives of creating such economic zones.

In his speech, the Minister of Transportation, Rotimi Amaechi, commended the Nigerian Ports Authority (NPA), Tolaram Engineering Company and China Harbour for the development of the landmark project.
“This will be the first deep seaport in Nigeria. What we have had are river ports. This will help to improve the capacity of Nigerian ports with modern procedure,” Amaechi said.

He added that the ports concession agreement cover 45 years on a build, own, operate and transfer basis.
On her part, the Managing Director, Nigerian Ports Authority, (NPA), Hadiza Bala-Usman, stated that the NPA is committed to port development in Nigeria.

“Funding for the Lekki Deep Sea Port project is structured at equity and debt ratio of 20:80 respectively. And in line with the commitment of the federal government to promote private sector investment, the NPA has a fully paid five per cent minimal investment, which is enough to give it a stake; to give the investors comfort and enable it perform its oversight technical regulatory functions without being unduly hindered by commercial considerations.
“The other 95 per cent interest is owned in 18: 8 ratio by the Lagos State Government and the Tolaram Group respectively. Of the 75 per cent owned by the Tolaram Group, however, the federal government holds a further 15 per cent shareholding to the value of $107.78 million converted into shares from a pre-2002 government grant to promoters of Tolaram Group toward financing the Viva Methanol Project,” she said.

Usman said the vision of the NPA is to provide the enabling environment for Nigeria to have the best ports in Africa, “and the event here today gratefully moves us closer to that reality.

“As statutory regulators of ports in the country, the NPA is committed to providing the technical support and regulatory environment that would see to the timely completion of construction work and ensure efficient operations and management of the port upon commissioning.

“We will work with all stakeholders to see the Lekki Deep Sea Port becomes a world class facility and an enviable edifice that can stand the test of time, become an institution that will be the pride of all stakeholders as well as encourage more of such investments in the country.

“As we work toward revamping the decaying port infrastructure we inherited and encouraging new investments in the sector, we are confident that projects such as this foretell the renewal possible in our port infrastructure, the resurgence of our economy through the gateways that our ports are and the creation of a modern, agile, technically competent and competitive workforce that will make our country proud,” she said.

The Managing Director of Tolaram, Haresh Aswani, promised that the project would be completed within three years, and it woul generate over $200 billion revenue for Lagos state and federal government.
He said the project would support and enhance the growth of various free zones in the area.

Upon completion, the port facility will have three container berths, one dry bulk berth, three liquid berths, 16.5-metres draught, 600 metres turning cycle and a 2.7 million Twenty Foot Equivalent Unit (TEUs) per year.
Built over 90 hectares of land in the heart of the Lagos Free Trade Zone, Lekki Port is situated just 65 kilometres east of Lagos city, and slated to be completed in 2020.

Lekki Deep Sea Port will have significant positive impact estimated at $361 billion over the term of concession. It is expected to contribute more than $200 billion to the government exchequer and create close to 170,000 new jobs.