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Economy - News - Special News - Thematterspress - March 27, 2021

Lagos free trade zones defy Covid-19, record boom

Lagos

Trade

It will be inaugurated next month, but yesterday, March 25, 2021, Dangote Refinery and Petrochemical Plant in Lekki Free Trade Zone, churned out its first tranche of fertiliser.

Other investments in the Lekki Free Trade Zone and Lagos Free Zone in Ibeju Lekki, Lagos State are also getting over the setback caused by COVID-19. Lagos and Nigeria stand to reap a great deal from these investments.

The zones are home to major concessions such as the Lekki Deep Seaport, Dangote Refinery and Fertiliser Plant, Dangote Jetty and Port, Pinnacle Oil, Longrich Factory, Tolaram Industries Factory, among others.

Governor Babajide Sanwo-Olu and some members of the State Executive Council (SEC) toured these facilities at the weekend. He expressed satisfaction at the level of work already achieved compared to the last time he visited.

The two-day work visit afforded the governor the opportunity to see the level of work and give befitting and encouraging feedbacks to the people. He promised that his administration would support the investments to ensure they are delivered on schedule. Sanwo-Olu also said the government would ensure critical road infrastructure is built so the area does not become another Apapa.

Lagos Free Zone

According to the governor, investments in the Lagos Free Zone alone will quadruple the state’s Gross Domestic Product (GDP). The zone sits on an expanse of 830 hectares; it covers the Lekki Deep Seaport which sits on 90 hectares, and other business concessions.

Tolaram Group, the frontline investor handling the project, assured the governor that commercial operations at the port will begin in the first quarter of 2023. The port, which is being built by China Habour Engineering firm, was created in 2012 to enhance the economic position of Lagos as the manufacturing and logistics hub in West Africa.

The first phase of the project is being financed by a $629 million facility from China Development Bank (CDB), and is 48 per cent completed.

Sanwo-Olu said: “I can say that Lagos Free Zone has made tremendous improvement. We have seen the level of partnership Tolaram Group is bringing in terms of international investment and local brands in this corridor.

“The kind of investments happening in this corridor can indeed triple and quadruple the GDP of Lagos in the next 10 to 20 years. I laud all stakeholders that are with us on this journey. With the level of work we have seen, I’m truly excited. It is more gratifying that we are taking up this assignment with all energy required and we all can see what we can achieve when we work together.

“Since we signed a loan agreement less than 18 months ago, we have demonstrated strong capability in bringing the project to reality. This is the first quarter of 2021 and we have seen the project about 48 per cent completed. The investors have given us the commitment of first quarter of 2023 completion date. We will fulfill all our parts to make sure this date becomes reality.”

According to Sanwo-Olu, the size of the deep seaport will allow 18,000 TEU capacity vessels, which are four times bigger than the ones berthing at Apapa seaports, thereby scaling down the cost of container transportation from any part of the world.

“The interesting part is that our youths and young women will be the beneficiaries of this project.

“For us a government, this is the strongest point we have made with the project. I am fully convinced that the delivery of this project will transform commercial architecture of West Africa and bring about quick turnaround time in maritime sector,” he added.

The governor, who recalled that he was a commissioner when the first concession agreement was signed, hailed the investors for believing in the project and working tirelessly to ensure it is completed as planned. He hailed them for remaining committed despite obvious challenges.

Lagos Free Zone Chief Executive Officer Dinesh Rathi said Tolaram Group, a Singaporean company, initiated a $2 billion investment in the zone, of which the investor committed $950 million to developing a manufacturing hub in the zone.

Rathi said the project was expected to generate more than 170,000 direct and indirect job opportunities for Lagos residents, and would serve as alternative in an effort to decongest the Federal Government-owned seaports in Apapa.

Lagos Free Zone Development Company Chairman Biodun Dabiri hailed the government for its commitment towards changing the face of commerce in Africa. He stressed that all statutory permits, licenses and endorsement for the Lekki port project were already secured.

“There is strong guarantee that the port will be delivered before time, going by the inflow of capital investment and technical services,” Dabiri said.

Lekki Free Zone

The Lekki Free Trade Development Authority, also known as the Southwest Quadrant, sits on 3,000 hectares of land. It has witnessed massive infrastructure growth owing to the over $1.5 billion investment which has gone into developing it. There are about 44 companies operating in the zone.

Sanwo-Olu said: “I have been briefed before now but I had to come see things for myself. This is a 3,000 hectare free trade zone. Pinnacle Oil and Gas, which is the major anchor tenant here, is about the biggest oil storage facility in the country.

“This storage facility has a capacity of about 230 million litres, and the firm is planning to get to 1 billion litres in about one and half year. This complements a refinery which would have modern vessels as well that have either come to take products or bring them in.

“So we have come to see the level of investment that the government, Lekki Free Trade Zone, our Chinese partners and Nigerian companies are bringing to this side. Pinnacle is wholly Nigerian and it will be employing over 10,000 people when operation starts fully. There are 22 discharge points to serve 22 tankers at once; the size of the pumps can serve in 30 minutes, meaning that about 500 tankers can be served in a day.

So, our journey is not just to listen, but we would tie it to our development agenda as a government, and bringing solutions to the Apapa gridlock. We will build road infrastructure to ensure this place does not become another Apapa in another five or 10 years. The Eleko Junction to Epe Road is being built, and we plan to make it a dual carriageway from the Eleko Road to this place.”

Pinnacle Oil Chief Executive Officer Peter Mba said it took seven years to get the investment to its current level.

He added: “We believe this will optimise operations in the supply and distribution chain in the oil and gas sector. We also believe it will be a game changer in a way not witnessed before because it will save cost by ending the ship to ship transfer, which is the current norm in the industry, and takes 15 to 30 days to discharge a vessel.

“This facility will ensure that modern vessels are discharged in 24 hours because the CBM is at a water depth of 17.5 metres, and is able to take vessel sizes of 60,000 metric tonnes. The SPM, which will become operational in July, sits at a water depth of 23 metres, and is able to take vessel sizes of 150,000 tonnes. The storage will help to optimise the value of those offshore intake facilities.

“We expect that by the end of 2022, we should have up to a billion storage capacity to efficiently handle petroleum products in the country.”

Dangote Refinery Petrochemical Zone

The biggest of all the zones is perhaps the Dangote Refinery and Petrochemical Zone, which operates the Dangote Refinery, Port, Jetty and Fertiliser Plant.

Sanwo-Olu said the Dangote Refinery is the biggest single refinery in the world, and the fertiliser plant the second largest in the world. The refinery can take up to five billion litres of products.

He said: “We have taken about five hours’ drive round the Dangote refinery, the biggest single refinery in the world, and the fertiliser plant, the second largest in the world. We visited the port and jetty, and the SBM platform for oil export and import.

“We won’t fold our arms as a government and just inspect and say all is well. We are here to encourage the investors and assure them of government support. We are here to serve them and ensure they enjoy the ease of doing business which is critical to us. We are also here to ensure that jobs are created, especially for our youths, the local economy and for Nigerians in general.

“We will also clear issues around approval, right of way, and roads that should be built to improve the quality of life and businesses here. We don’t want another Apapa gridlock, so we have agreed on what to do. By the time we come here again, you will see the amount of road infrastructure that would have been built.

“Infrastructure is critical to take out pressure from the port, refinery and feritliser plant. We have agreed and given ourselves a timeline. This is a very exciting time for the government, the people, and the world at large. Fuel shortage and scarcity would be a thing of the past. Issues around Apapa gridlock would be past.

“We will deploy additional arms of government here – environment, physical planning, commerce, water front – to respond to their needs so we can move faster. We would also bring tourism here because we want people to live, work and play around here.

“Plans are also underway to bring the green rail to light. The green rail, which comes from Lekki, is in the master plan. We have done the expression of interest, and people have staked in. We are also considering the airport because there is a layout for a small airport, and this is receiving consideration as we speak.”

Dangote Group President Aliko Dangote said the refinery would be ready by the end of 2021 and start production first quarter of 2022. The fertiliser plant, he added, would start churning out products this week, though the official opening would be done by Sanwo-Olu in one month.

It is not just about refining oil and producing fertilisers for the firm; it is also keen on empowering its host community and ensuring its people are carried along in the journey.

Dangote said: “We have developed many local skills, especially fishing, because this is a fishing community so we buy boats for the locals. We have employed over 36,000 workers here on site, and over 20,000 are Nigerians. We are building schools and giving scholarships to the locals.

“This is our largest investment when compared to the entire group worldwide so we can’t joke with the locals. The only benefit is for us to have a win-win situation – give them jobs and ensure it is worth their while to receive us here, which they did well.

“We are also ready to build the road network under the tax-deductible regime, which is the Presidential Order 7. As soon as we get the green light to do so, we will begin to build in the next two months. I am sure the community and all stakeholders will be happy.”

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