ON THE ROAD
Nigeria's infrastructural deficit is difficult to calculate. The need for electricity, inadequate roads, crowded ports, and the absence of trains to transport goods have inspired the creation of PPPs to fund projects that will get the economy back on track.
As opposed to the highly liquid Arabian Gulf states and China, where governments have the hard cash to finance construction, many emerging economies have settled on concession-based and PPP models to fund infrastructural expansion. Before 2005, Nigeria had almost no concession-based or PPP projects. Two megaprojects in Lagos State are testing the waters in resplendent fashion through exclusive deals with the state government.
Eko Atlantic and the Lekki Free Zone (FTZ) are both joint ventures between private companies or state actors and the Lagos State government. In both cases, land has been given in long-term agreements in order to stimulate massive investment. Together they may change the face of Lagos.Eko Atlantic has been widely reported for the audacity of its vision and scale. It is being developed primarily by Ronald Chagoury, a longtime Nigerian-Lebanese businessman with close ties to successive governments in Nigeria. The vast new landscape created by the hundreds of thousands of tons of sand that have been deposited in what was only a few years ago part of the Lagos shipping channel is impressive, but perhaps equally so are the terms of the legal arrangement under which Eko Atlantic will exist. Eko Atlantic is classified as its own municipality, and will run on its own bureaucracy which, while overseen by that of Lagos State, will operate independently with an eye towards easing investor access. Eko Atlantic will also be an offshore banking zone (pending approval by the CBN) and allow free movement of capital by investors. Most significantly, the agreement between Lagos State and the Eko Development Company is essentially a concession, granting what was formerly water to the company in exchange for billions in investment.
Eko Atlantic's legal provisions certainly make exposure to Nigerian markets safer for multinationals, and could reform public opinion about Nigeria all over the world. It will also boast its own power, water, and security, ensuring that, at least for major companies who can afford to be located there, business can continue as usual and not be dependent on an ultimate solution of the nation's infrastructural problems. Although striking, Eko Atlantic will do little to promote industry in Nigeria as it is conceived as a residential area.
There is another project just over an hour outside Lagos, the Lekki Free Trade Zone that may, among other things, give Nigeria its first working steel mills. The zone offers similar protections to Eko Atlantic including tariff-free importation of materials for use within the zone, tax-free operation within an offshore banking zone (pending CBN approval), and on-site power, water, and security. The Lekki Free Trade Zone is a joint venture comprised of the Lagos State Government (20%), China Africa Lekki Investment Ltd (60%), and Lekki Worldwide Investment Ltd. (20%). The zone has been in process since the early 2000s, but the first phase of the zone's generating plant opened in mid-2015, attracting tens of millions of dollars in Chinese investments including a steel mill and other industrial projects. The zone's infrastructure, including its power plant, housing for tens of thousands of workers, roads, and much more is all financed by the Chinese government. The zone is part of the China's policy of creating conditions favorable to Chinese companies abroad, although in Nigeria there are still pieces of the agreement that have not been finalized. Officials in the CCECC suggest that once the terms are complete, there will be a major influx of investors. However, the LFTZ has already advanced the concession model in Nigeria.
Near the LFTZ there is the $1.65 billion Lekki Deepwater Port, where construction began in May of 2015. It will be the only post-panamax port in sub-Saharan Africa and its being developed by the Singapore-based Toloram Group, which has various interests in Nigeria. There is also the proposed Lekki-Epe International Airport, which will be constructed on a PPP basis. The airport has seen sincere interest from foreign and international investors interviewed for this publication, but at the time of press a binding agreement has yet to be signed.
ON THE ROAD
TABLE OF CONTENTS
Focus: PPPs and Concessions
On the Road
Nigeria's infrastructural deficit is difficult to calculate. The need for electricity, inadequate roads, crowded ports, and the absence of trains to transport goods have inspired the creation of PPPs to fund projects that will get the economy back on track.
read articleInterview
Otunba Olusegun Jawando, Chairman, Lekki Free Zone Development Company
TBY talks to Otunba Olusegun Jawando, Chairman of Lekki Free Zone Development Company, and Yonghua Ding, Managing Director of Lekki Free Zone Development Company, on the purpose of the new port and their expectations for the short term.
read articleInterview
Tunde Fowler, Chairman, Federal Internal Revenue Service (FIRS)
TBY talks to Tunde Fowler, Chairman of Federal Internal Revenue Service (FIRS), on collaboration among Nigeria's collection agencies, leveraging technology to increase efficiency, and aligning tax codes with an increasingly digital economy.
read articleInterview
Dr. Musa A. Musa, Group Managing Director & CEO , Abuja Investments Company Limited (AICL)
TBY talks to Dr. Musa A. Musa, Group Managing Director & CEO of Abuja Investments Company Limited (AICL), on developing Abuja, supporting foreign investors, and looking toward growth in the future.
read articleInterview
Chief Tunde J. Afolabi, Chairman & CEO , Amni International Petroleum Development Company
TBY talks with Chief Tunde J. Afolabi, Chairman & CEO of Amni International Petroleum Development Company, on oil prices and how the company works with local and international companies.
read articleInterview
Prof. Umar Garba Danbatta, Executive Vice Chairman & CEO, Nigerian Communications Commission (NCC)
TBY talks to Prof. Umar Garba Danbatta, Executive Vice Chairman & CEO of the Nigerian Communications Commission (NCC), on encouraging private sector investments in broadband, improving access to ICT services, and the government's vision for leveraging technology to drive growth.
read articleInterview
Peter Jack, Director General & CEO, National Information Technology Development Agency
TBY talks to Peter Jack, Director General & CEO of the National Information Technology Development Agency, on facilitating investment and partnering with private and public actors to promote IT development.
read articleInterview
Haruna Baba Jauro, Executive Director of Administration & Finance, Nigerian Maritime Administration & Safety Agency (NIMASA)
TBY talks to Haruna Baba Jauro, Executive Director of Administration & Finance for the Nigerian Maritime Administration & Safety Agency (NIMASA), on its role in the maritime industry, and renewed optimism in the sector.
read articleReview: Construction
Made in Nigeria
The construction industry's importance cannot be underestimated, given its rise in the past five years, in particular. Central to construction's success has been cement, and Nigeria is now Africa's number one cement producer, having surpassed Egypt in 1H2015.
read articleInterview
Onajite Okoloko, Managing Director & CEO, Notore Chemical Industries
TBY talks to Onajite Okoloko, Managing Director & CEO of Notore Chemical Industries, on the challenges facing the fertilizing industry and how the government and private sector can work together to resolve them.
read articleReview: Health
Access for All
Nigerian healthcare is focused on extending access, especially to the 70% or so that live below the poverty line. The relative under-investment in health services means there is an important role for the private sector to play in assisting the state in its efforts to improve standards and widen access.
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