President Muhammadu Buhari finally, on Thursday, set the stage for Nigeria’s economy to start earning an estimated revenue of $361 billion in taxes, duties and royalties as he officially flagged off the commencement of major construction work at the project site of the $1.53 billion Lekki Deep Seaport, 12 years after the project was announced with fanfare.
$361bn is the earning estimated to be made on the project from taxes, duties and royalties during the 45-year concession period.
The port, which is also expected to have a qualitative impact on the manufacturing, trade and commercial service sectors, would create direct and induced business revenue impact of $158 billion, bringing the expected revenue to over $360 billion within the concession period.
Buhari, 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 and assured of the Federal Government’s commitment to creating a conducive business environment that would aid investments.
The president further said that the promoters of this project were targeting about 1.5 million Twenty Foot Equivalent Units (TEUs) container capacity yearly, which is expected to grow to about 2.7 million and 4.7 million TEUs when the port becomes fully operational. “With this, the Lekki Deep seaport will become one of the best deep water ports in our region and serve as a hub for port operations in all of West Africa.”
“The promoters also plan to dredge the port channel to about 16 meters, 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 Nigerian ports, and achieve greater efficiency and economies of scale, which will generate significant revenue for the Nigerian economy,” he said.
Osinbajo however noted that the Federal Government has 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.
Rotimi Amaechi, Minister for Transportation, commended the NPA, Tolaram Group and China Harbour Engineering, the EPC contractor for the port project, for the development of the landmark project.
Amaechi said the ports concession agreement covered 45 years on a build, own, operate and transfer basis. “This will be the first deep seaport in Nigeria because what we have had are river ports. This will help to improve the capacity of Nigerian ports to generate both inbound and outbound cargoes.
In her welcome address, Hadiza Bala Usman, managing director of the Nigerian Ports Authority (NPA) said that the funding for the Lekki Deep Seaport project is structured at equity and debt ratio of 20:80 respectively.
“In line with the commitment of the Federal Government to promote private sector investment, the NPA has a fully paid 5 percent minimal investment, enough to give it a stake and give the investors comfort that would enable it perform its oversight technical regulatory functions without being unduly hindered by commercial considerations. The other 95 percent interest is owned in a 18: 8 ratio by the Lagos State Government and the Tolaram Group, respectively,” she explained.
Usman said that of the 75 percent owned by the Tolaram Group however, the Federal Government holds a further 15 percent shareholding to the value of $107.78 million converted into shares from a pre-2002 FG grant to promoters of Tolaram Group toward financing the Viva Methanol Project.
Usman said the vision of the NPA was to provide an enabling environment for Nigeria to have the best ports in Africa and the flag-off event moves the authority 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,” she added.
She further observed that, “As we work toward revamping the decaying port infrastructure we inherited and encouraging new investment 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 nation proud.”
Haresh Aswani, managing director of Tolaram Group, who assured that the project would be completed within the next three years, said that it would generate over $200 billion revenue for Lagos and the Federal Government.
According to Aswani, the flag-off has put to rest all doubts around the project and ensures the completion of the project within three years. He said the project would support and enhance the growth of various free zones in the Lekki area.
“Upon completion, the port facility will have three container berths, one dry bulk berth, three liquid berths, 16.5-meter draught, 600 meter turning cycle and 2.7 million Twenty Foot Equivalent Unit (TEUs) per year. Built on over 90 hectares of land in the heart of the Lagos Free Trade Zone, Lekki Port is situated just 65 kilometers east of Lagos city and slated to be completed in 2020,” he said.
Continuing, he added that “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.
