From Akpan Peters
Like Dr. Jadesimi stated that LADOL has to exceed international standards. Unfortunately, however, LADOL is developing a reputation for its hostility to international business.
Nigeria has continued to lose billions of dollars of potential investment in Lagos Deep Offshore Logistics (LADOL) base due to the endless threat of the foreign investor crisis in the zone.
Perhaps the most strategically located free zone, LADOL has built a notorious reputation for crisis and negative publicity due to the zone managers’ apparent inability to woo investors and get their home in order.
At the last count, the zone had been marked by no less than eight legal disputes in Nigeria and abroad, including arbitration in the United Kingdom.
This has scared potential foreign investors and blocked ongoing investments by foreign investors operating in the zone to make Nigeria a center of oil and gas business in sub-Saharan Africa, while the Nigerian government has made every effort to address various issues to solve.
The implication is that while zone managers continue to claim large areas of underdeveloped land, operators are agreed that they are unable to attract foreign investors to take advantage of the zone’s opportunities.
The broader implication is that the Nigerian Port Authority (NPA), which owns the land, and the federal government continued to lose revenue because the zone operators were unable to attract investment.
The hardest-hit Nigerian economy has also continued to lose opportunities to create jobs and increase the country’s gross domestic product (GDP).
Over the past decade, the name ‘LADOL’ has become synonymous with crisis and negative publicity as the zone managers continued to be in the news for the wrong reasons.
Despite the intervention of various government agencies, LADOL’s reputation for not tolerating competition has continued to play it off against well-known foreign investors, forcing a US company previously based in the zone to leave Nigeria.
The zone managers have been accused of effectively using lockouts, disqualifications, inflated fees and frivolous litigation to frustrate investors out of the zone.
In fact, in the more than 20 years of operation of the free zone, only about six acres of the underdeveloped 76 hectares of land has been able to host tangible investment, while the rest has remained largely empty. Other investments that they allegedly spent millions on are only visible on the pages of the newspapers, not in the free zone.
The regulators should also sound out the indigenous people of the zone managers
Status lawsuit after alleging that the two foreign companies that allegedly own 84 percent of LADOL – Sable Offshore Investment Limited and Alsba Ventures – were registered in Virgin Island, the UK.
It is also known around the world that British Virgin Island is a tax haven where companies do not pay taxes, although we knew that during the Egina project they received over USD 100 million through exclusive service in the Freezone.
These companies are letterbox companies and regulators and anti-corruption agencies in most countries have had occasion to investigate the business activities of these companies.
Under Nigerian corporate law, specifically the Companies and Allied Matters Act (CAMA), if two foreign companies set up a business in Nigeria, the new company can rightly be considered a foreign company rather than a wholly Nigerian as claimed by LADOL.
The zone managers once claimed that the Nigerian Content Development and Monitoring Board (NCDMB) backed it with $ 25 million from the Nigerian Content Fund, while the Central Bank of Nigeria (CBN) backed it with a N6.09 billion facility. It was not clear what the loans were for, but it is very clear that the opportunities and benefits LADOL has enjoyed are clearly intended for Nigerian companies.
Many local institutions are struggling to raise such loans to stimulate the Nigerian economy, so LADOL also had the privilege of being among the companies that used indigenous status to gain access to the Nigerian Federal Government’s Content Intervention Fund, but like that Fund was used is only LADOL and his. known foreign promoters.
Unfortunately, the company has refused to use the privileges it enjoys under the Nigerian Content Act to create win-win jobs for Nigerians by partnering with overseas companies.
Also recently, zone managers walked into town with no evidence to support news that the federal government had granted them a new 25-year lease, a development that oil and gas operators and maritime experts have described as “worthwhile failures.”
Rather than building partnerships and alliances to attract investors, free zone managers are said to have focused on signing MoUs with portfolio investors while keeping reputable and credible investors embroiled in unnecessary fights and frivolous litigation.
Aside from investor frustration, the zone managers have also been accused by the NPA of violating the terms of their lease and neglecting the federal government.
Before the NPA terminated its lease, the regulator accused zone managers of underperforming the federal government on N16 billion, a claim they vehemently denied.
According to media reports, the NPA, the landlord of the free zone, was investigating an allegation that the free zone managers had neither informed the landlord of the additional 30 hectares of sand nor obtained official approval.
Federal agencies are also due to investigate the legality of his jetty after he claimed it was not properly licensed.
The alleged breach of rental terms did not go unnoticed, however, as the NPA took the big stick in 2019 by voiding its lease, as widely reported in the media.
However, the NPA granted the zone managers a new lease on new terms for 5.7574 hectares of built land and 69.2874 hectares of undeveloped land.
This sparked a dispute that is currently the subject of litigation.
No investor will invest his money in an environment characterized by the endless crises, legal disputes and negative publicity that the zone now stands for.
Even the few investors loyal to Nigeria have faced excessive fees and other hostile acts by the managers of the free zones
For example, Africcoat, an American pipe coating company, was forced to leave Nigeria by the operators of the zone.
While other free zones nationwide campaign to attract investors, the operating environment in the zone is one of open hostility towards investors.
Investor worries were made worse in April 2019 when a Nigeria Security and Civil Defense Corps (NSCDC) officer, Mr. Innocent Oshemi, who was guarding the zone, went nuts and shot another NSCDC officer and wounded a Korean employee who was working on the manufacturing and integration yard in the free zone.
The armed security guard allegedly got out of hand in the SHI-MCI yard, killed his colleague during an argument and shot a Korean SHI-MCI employee who was operating a crane in the yard at the time.
Not only has the incident deterred any actual or potential investors, but it also dealt a severe blow to trade between Nigeria and South Korea.
To end this never-ending crisis, Nigerian shipping industry stakeholders had reportedly stressed the need for the federal government to liberalize the LADOL free zone in Lagos by authorizing many free zone operators to take control of the zone in order to gain the monopoly chain break through, which is hindering the development of the approximately 121,114.5 hectares of land in the zone.
They called on the federal government to divide the zone into many free zones and to license other managers to use the abundant investment opportunities in the zone.
Some of the stakeholders argued that the purpose of the federal government’s establishment of Free Zones (FZs) was to attract Foreign Direct Investment (FDI), create jobs, promote the transfer of technical skills to Nigerians, and stimulate the country’s economy.
They complained that the LADOL Free Zone has been more embroiled in controversy than attracting investment in recent years, adding that such controversy scares serious investors.
They cited multiple litigation between the investors and the zone managers and the NPA’s allegation as some of the challenges hindering investment in the zone.
They have also argued that the 121+ approximately 114.5 acres of land is too large to be managed by the Zone Management Company – Global Resource Management Free Zone Company (GRMFZC).
According to the analysts, the zone operators’ ongoing stranglehold on 121,114.5 hectares of land in Tarkwa Bay in Lagos has hampered efforts by the federal government to lure investors into the free trade zone.
They found that LADOL has been managing the zone for over 20 years, a large part of the 121 hectares of land has remained undeveloped because the operators are obviously unable to form alliances with local and foreign investors in order to develop the FC support financially .
They also argued that LADOL’s overlapping and contradicting roles led to exorbitant fees that deter investors and thereby undermine the government’s goal of turning FC into an investment hub.
A Warri-based analyst, Nelson Peters, once pointed out that LADOL, as the agent of the regulatory authority (NPA), also exercises state and regulatory powers over all companies in the free zone within the zone.
“It is evident that this monopoly tendency has undermined the crucial role of free zone operators in attracting investors as they are now focused on pursuing their financial benefits at the expense of foreign and local investors in the zone and the Nigerian economy,” he added.
… .Peters, a Nigerian content analyst, writes from Warri, Delta State