Lekki Deep Sea Port to generate over $200bn, as Buhari promises needed support

Barring any unforeseen circumstances, Nigeria is expected to rake in over $200 billion from the operations of the Lekki Deep seaport, as President Muhammadu Buhari expressed commitment to a conducive business environment that would aid investments.

President Buhari, who was represented by the Vice President, Yemi Oshinbajo, said on Thursday that when completed the project would generate up to 170,000 direct and indirect jobs in the economy.

According to Mr. President, “The promoters of this project are targeting about 1.5 million Twenty-Foot Equivalent Units (TEUs) container capacity yearly, which we expect to grow to about 2.7 million and 4.7 million TEUs when the project operation commences. With this, the Lekki Deep seaport will become one of the best deep-water port in our region and serve as a hub for port operations in the whole of West Africa.

“The promoters also planned to dredge the port channel to about 16 meter 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 the port, and greater efficiency and economies of scale will generate significant revenue for Nigeria’s economy,” he said.

Oshinbajo, 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.

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In his own presentation, the Executive Governor of Lagos State, Governor Akinwunmi Ambode called for public investment that will aid the viability of the Lekki port project.

The Governor, who was represented by his deputy, Idiat Oluranti Adebule, stated that “This port which is expected to be delivered by 2020, will be one of the biggest in the West African subregion.

” Lagos State government has a 20 percent equity stake in the Lekki port project and is an indication of the faith of the Lagos State government in the project.

“It has been estimated that this project will facilitate an injection of $2.23bn for construction and fixed assets into the country.

“However, there is a need for public investment to complement the Lekki port infrastructure, like roads, railway and water infrastructure in order to avoid the present situation that we have at the Apapa and Tin-Can port area of Lagos State.”

Minister of Transportation, Rotimi Amaechi, in his presentation, commended the Nigerian Ports Authority (NPA), Tolaram Group and China Harbour for the development of the landmark project.

Amaechi explained that “This will be the first deep seaport in Nigeria. What we have had are river ports. This will help to improve the capacity of Nigerian ports with a modern procedure.

He added that the ports concession agreement covered 45 years on a build, own, operate and transfer basis.

The Managing Director of the Nigerian Ports Authority, (NPA), Hadiza Bala Usman, in her presentation, explained that “Funding for the Lekki Deep Sea Port project is structured at equity and debt ratio of 20:80 respectively. And in line with the commitment of the federal government to promote private sector investment, the Nigerian Ports Authority has a fully paid five per cent minimal investment, enough to give it a stake, to give the investors comfort and enable it to 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.

“Of the 75 percent owned by the Tolaram Group, however, the Federal Government holds a further 15 per cent 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,” she said.

Usman added that the vision of the Nigerian Ports Authority is to provide the enabling environment for Nigeria to have the best ports in Africa and the event here today gratefully moves us closer to that reality.

Managing Director (Africa)Tolaram, Haresh Aswani, assured that the project would be completed within three years, and it will generate over $200 billion revenue for Lagos and Federal Government.

He said the project would support and enhance the growth of various free zones in the 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 a 2.7 million Twenty Foot Equivalent Unit (TEUs) per year.

Built over 90 hectares of land in the heart of the Lagos Free Trade Zone, Lekki Port is situated just 65 kilometres east of Lagos city and slated to be completed in 2020.

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.