Nigeria to leverage $1.53bn Lekki Deep Sea Port for export revenue expansion

The federal government’s hope of expanding its export revenue base through increased local capacity sufficient for export may be realised by 2021 with the flag off of $1.53billion Lekki deep sea port.

The project, which is the first deep sea port in the country and the West African sub-region, has projections of growing an initial 1.5 million 20 feet equivalent unit container capacity to 2.7million and 4.7million respectively, in the long run.

The activity of the prime investor Tolaram Group and China Harbour Engineering Company is expected to reel out 170,000 direct and indirect jobs with about $200 million expected to accrue to the government.

Flagging off the project on Thursday, President Mohammadu Buhari said the landmark event aptly reinforced the administration’s Economic Recovery and Growth Plan (ERGP) in terms of its emphasis on supporting efficient infrastructure projects directed at making the major impact on trade and commerce.

He said about N90 billion had been earmarked for development of Special Economic Zones (SEZs) in its previous budget, using the special Lekki economic zone as a model for other economic zones specifically targeting export.
Represented by the vice president, Yemi Osinbajo, he pledged to provide further support for the investing partners to seamlessly conclude the project.

“The development of this deep-sea port is mission critical to the achievement of the important objective of creating this SEZs. The business of government is to contribute by way of equity where necessary, but more importantly to create the enabling environment for the private sector to do business. We must move ahead to ensure the speedy completion of this project. There will be problems, but we assure you that the federal and state governments will be with you every step of the way to ensure that we give all the support required to make this dream come to fruition,” Buhari said.

Rotimi Amaechi, the minister of transportation, said the country needs to leverage the new trade hub to increase its export prowess noting that it was already overwhelmed with imports.

“Nigeria’s ability to accommodate these vessels will almost guarantee our country regional hub status by the sheer point of inward and outward cargo. I hope this would help us generate outward cargos because we have been having problems in raising outward cargoes. We must also work hard to make sure that we send out commodities for other countries to buy from Nigeria,” he said.

Hadiza Abubakar, the managing director Nigerian Ports Authority, said the body has a fully paid share capital of five percent, the minimum investment to instill private investors’ confidence without having undue interference as a regulator.

She said the funding structured on an equity to debt ratio of 80 to 20 percent has 95 percent of the share capital owned by the promoting group, Tolaram, and the Lagos state government.

“At a 75 percent share owned by the Tolaram group, the federal government of Nigeria indeed owns an additional 15% shareholding which is to the value of a $170million. Nigeria being the largest exporter and importer of cargo in West Africa sub-region requires a deep sea port which can receive large vessels. These big ships move cargo and more efficiently,” she said.

She added that the authority would gear up efforts to provide an enabling environment for the operators.

The Lekki Port LFTZ Enterprise was awarded the concession for 45 years by Nigerian Ports Authority on a Build, Own, Operate and Transfer (BOOT) basis under which LPLE is required to transfer to NPA at the end of the concession term.

Upon completion, the Port will have a total of three container berths, one dry bulk berth, and three liquid berths.