Lekki Free Trade Zone: Rejuvenating Lagos on the Seashore

The environment is serene with little human activities. In fact, from the main entrance, a first visitor to the Lagos Free Trade Zone located in the local community of Akodo, may not understand why government plans such a huge investment in far away Lagos urban city. But this is the future of Lagos, the centre […]

The environment is serene with little human activities. In fact, from the main entrance, a first visitor to the Lagos Free Trade Zone located in the local community of Akodo, may not understand why government plans such a huge investment in far away Lagos urban city. But this is the future of Lagos, the centre of excellence. 
The Lagos Free Trade Zone, otherwise known as Sino-Nigerian Lekki Free Trade Zone (LFTZ), came to limelight in 2006 when it cemented business relations with the Chinese government. This relationship, however, came to fruition the following year, 2007, under the then governor, Asiwaju Bola Ahmed Tinubu, when he led the Lagos state government to sign a Memorandum of Understanding (MoU) with the Chinese government for the development of the Lekki Free Trade Zone.
Set along the Atlantic Ocean coast, some 55 kilometers away from Lagos, the nation’s commercial capital, the project was said to be the first of its kind the Chinese government will ever build abroad and it was to be executed in three phases.  The first phase was projected to cover an area of 15 square kilometers, with the Chinese side investing 200 million US dollars, and the Nigerian side 67 million dollars. Then, the projection was that the investment has the prospect of dominating the much-coveted West African market.
The LFTZ is located in-between Akodo and Lekki village on the south western corner of Lagos state, at Ibeju-Lekki Local Government Area, off the Lagos-Epe expressway. The zone has been described as a global business haven by the Lagos state government, and a peep into the on-going activities at the site, shows that in the not too distant future, the dream of the Lekki Free Trade Zone by the state government will become a reality.
Recently, a team from Sunday Trust   was on an assessment mission to the site and what was seen on ground, coupled with the on-going construction within the zone, revealed that the Lagos state government deliberately embarked on the development of the free trade zone to develop economic, industrial, tourism and trading activities conducive for a global business haven towards expanding its Internally Generated Revenue (IGR) base.
The topography of the zone is fairly level with a gentle slope towards the north-east boundary with neighbouring Ogun State. The LFTZ is a combination of natural land and water forms, which have been observed to be economically efficient for the development of a Free Trade Zone, having been situated between Lagos lagoon and the Atlantic Ocean, and connected to international waterways.
The entire zone occupies 16,500 hectares of land and an infrastructure master plan   designed by Dar Al-Handasah Company and approved by the state government in 2005. The choice industries focused on  by the government to be cited at the zone include-Oil and Gas, Port and Transshipment, Manufacturing, Hospitality and Real Estate, Electrical and Electronics, Food and Agro-Allied, Information and Communication, Banking and Financial services, our findings revealed.
Presently, only the phase 1 of the project is  being undertaken  by the  Lagos state government, in collaboration with a Chinese Consortium,  now known as  China-  Africa Lekki Investment Limited, through the Lekki Free Zone Development Company (LFZDC)in which the  Lagos state government  controls  20  per cent shares, Lekki Worldwide Investment Limited 20%, and China- Africa Lekki Investment Limited , holding 60 per cent shares.
The development of the Phase 1 of the zone, according to Prince Adeniyi Oyemade, Lagos State Commissioner for Commerce and Industry, the ministry that supervises the project, has witnessed considerable progress as regards the development of infrastructure at the site. In his explanations about the zone, the base work for 18 km of road and 6km drainage channels have been constructed. “We are currently laying the foundation for the construction of two standard workshops and factories, for lease to prospective tenants,” he said.
The commissioner stressed that in order to enhance security in the zone, 54 solar powered street lights have been erected at the main entrance of the zone. A temporary generator house that accommodates two separate 1,000kva generators to meet the immediate power needs of the zone have been provided.
On the viability of the zone, Prince Oyemade noted that the LFTZ has investment opportunities for venture capital  companies. He said this was being done in partnership with Lekki Worldwide Investment Limited (LWIL), a private company incorporated in 2006, to promote and manage the development of the zone.
A top official of LWIL who will not want his name in print, said the zone has been split into an oil and gas logistic park, light and heavy industrial and manufacturing section, media centre and urban residential section. The official added that for the zone to be developed quickly , as expected by the initiator, calls are being made for the development of  a meaningful partnership , to build  a modern international airport and sea –port , that will serve the zone , and become the aviation and maritime hub of the sub-region.
It was also gathered at LWIL that real estate companies would be given a role to play in the development of the zone. The LFTZ will  showcase opportunities for private companies in the oil and gas manufacturing, food processing, hospitality and leisure sectors, banking and financial service sector would be expected to develop a 21st century financial centre at the zone.
The Lekki Free Trade Zone includes an Integrated Gas to Polymers (GTP) plant operated by Viva Methanol Limited, and a deep sea port which will be the largest of its kind in the West African sub-region. The Executive Director of Viva Methanol, Mr. John Matroudes, had said, “with Nigeria’s abundant gas supply, the Viva Methanol Plant, when fully operational, will upstage Singapore as the largest in the world, with an annual capacity of more than 3.3million tonnes.”
Mastroudes declared his company’s commitment to the success of the GTP project when he disclosed that the project will gulp $4 billion on completion. “With the GTP plant as an anchor tenant on the site, the Lekki FTZ will attract associated downstream, support ancillary industry into the value chain, thereby establishing itself as a specialized world-class petrochemical park,” the Executive Director of Viva Methanol emphasized.
The Viva Methanol Project will base its work on four areas of production and service, capable of attracting investment that is worth more than US$3.25 billion. Findings show that the areas of focus include transportation of natural gas through a gas pipeline spanning 230 km from Escravos in Delta State to the zone in Lagos, the Viva Methanol process plant, that will be producing Ammonia, Urea complex that will incorporate Axinova Polyolefin’s project,  that will be producing products like Polyethylene and Polypropylene, fully operational maritime facilities, utility and infrastructure development.
In his own comment on the viability of the Lekki Free Trade Zone, the Managing Director of the Zone’s deep sea port project, Mr. Anand Sivaram said, “the port at Lekki will be the largest in the West African sub-region. It will have a 16m/17m draught, and will be able to accommodate large size vessels with a capacity of about 8000 Twenty Equivalent Unit (TEU’s).”  The port that is located at Itoke village within the zone, has a natural site for deep water in all Nigeria’s coastal line, Sivaram stressed.
Sivaram stressed that with the zone’s extensive water frontage, accessibility to the Atlantic Ocean, good road network to Lagos and the surrounding hinterland, and readily available land with potential for expansion, the Lekki FTZ is set to be a major hub for business in West Africa. “It will also create employment for many Nigerians due to its size, and the various companies within it,” Sivaram declared.
On incentives that will attract investors to the zone from within and outside the country, Prince Oyemade explained that in as much as current Nigerian laws and regulations on tax, levy, Customs and foreign exchange are not applicable to the zone, including all the relevant tax of the federal, state and local government areas, investors at Lekki FTZ will enjoy complete tax holiday.
Sunday Trust also gathered that investors will also enjoy 100 per cent repatriation of capital, profit and dividends, 100 per cent permission to sell manufactured, imported and assembled goods to the Nigerian domestic market, 100 per cent restriction free to hire foreign employees, waivers on all expatriate quotas for companies operating in the zone, 100 per cent waiver on all import and export licenses and many more. The land sub-lease period at the zone is 99 years beginning from January 1st, 2006.
Meanwhile, previous owners of the land on which the Lekki FTZ is located, have been complaining that the state government has used state machinery to snatch their land between 2005 and 2006 and paid them peanuts in the process.  Community leaders in Akodo and Lekki village noted that their land was annexed to the over 20 villages that were scrapped to give way for the free trade zone.
The Baale (Head) of Akodo village, Chief Adebayo Ogunlaja, informed Sunday Trust team   that the state government succeeded in grabbing large parcels  of land that belong to the community , on the pretext that it is interested in   bringing  development to the village and neighboring villages  in the area. “They have much of our land on the other side of the road. The free trade zone has not brought any development to our community, because our lives have not changed for the better,” the 70 year old community leader declared.
Also in Lekki village from where the zone derived its name, villagers are complaining of not benefitting from the project. Mr Yemi Oyediran hinted that majority of the land owners were given promises of a better life   , before they released their land to the state government.
Oyediran condemned the manner with which the money was released to the villagers, noting that the government failed to ensure the money got to the real owners of the acquired lands. “Government has said it gave us compensation, but we are asking them to publish the names of those who got the compensation from them. As for me, my great grand-father’s land was taken away from my family on the basis of public interest.  We have not benefited from the project. We have not seen any meaningful development in our village. All we hear often is that millions and billions of naira being sunk in this area,” he argued.
But Prince Oyemade debunked allegations made by the village leaders. He said the state government has compensated the original settlers on the land acquired within Ibeju-Lekki Local Government Area of the state, adding that, apart from paying compensation to original owners of the land in the zone, a Community Relations Committee was constituted to foster a harmonious relationship between the state government and the host communities. 
He also said provisions were made for communities that were relocated from the Lekki Free Trade Zone, as a result of the development of the zone. 
An official of the Lekki Community Development Association who pleaded anonymity, told Sunday Trust that though the local government is expecting a huge internally generated revenue from the zone, there would be more pressure on government to provide basic facilities such as water, and health care centres
“Yes, there will be threat of security on other existing facilities within the area. Right now, though people are happy because of employment opportunities and other commercial activities which may come, but the establishment of LFTZ, has caused a lot of dislocations to the people”, he said
He said the local government would need to more than double of the current budget when the zone is eventually completed, to meet the yearning of the people in the area, adding that the price of land in the village is on the rise now as more people are now trooping into the community.