Two months ago, the Managing Director of Nigerian Ports Authority (NPA), Hadiza Bala Usman, stirred a major controversy in the country when she wrote a letter to Intels Nigeria Limited (INL), proposing a review of the existing contract, among other things, between the two parties. To many, the sudden decision of the nation’s maritime infrastructure landlord appeared smeared with a lot of political miscalculations and considered dangerous for the country’s campaign aimed at attracting foreign direct investment.
The letter annulled the agreement, which hitherto allowed the company to receive revenue on behalf of NPA for 17 years. It was rather shocking that NPA suddenly realised that the agreement violated the Nigerian constitution, especially in view of the implementation of the Federal Government’s policy of Treasury Single Account (TSA).
While the embattled company provided reasons why it would not be able to adjust its financial process to accommodate TSA on the ground that it was not part of the contractual agreement with NPA, it also said that the contracts were used to secure $1.4 billion loan facility that can only be serviced by retaining its percentage of revenue collected.
In responding to the position of the major investor in the sector, all that NPA could proffer was for Intels to respect the new policy of the Federal Government in addition to threatening to terminate the agreement for monitoring and supervision of pilotage districts in the exclusive economic zone that permits Intels to receive revenue generated in each pilotage district from service boat operations where it earns 28 per cent of total revenue as commission.
The threat by the authority has now been fully executed after the 33 years investment by Intels has transformed the Onne Free Zone into an investors’ paradise, which, to date, has attracted foreign direct investments of over $60 billion.
This is in addition to providing direct and indirect jobs for over 30,000 people through its agency services, cargo services, port management, specialised services, support services in shore bases and manages client operations, including pipe racks, stacking areas, pilotage service and various other services.
While not begrudging the Federal Government of wrong doing in an attempt to make investors obey the laws of the land, it is also very important to carry out the process in such a way as not to discourage investors in an age tariff barriers are being brought down around the world and rules being designed to encourage investors by various governments.
Already, some companies such Nestle Plc., Dunlop Nigeria Plc. and Michelin have left the shores of the country to neighbouring Ghana due to hard government policies weaved together to create unnecessary hurdles for businessmen, leading to decline in the country’s FDI.
National Bureau of Statistics (NBS) recently reported that Nigerian economy recorded its second lowest investment inflow in 10 years, with the country attracting a total investment of $908.27 million in the first quarter of 2017 compared to the $1.55 billion that the economy attracted in the fourth quarter of 2016.
It is on this basis that the current attempt by the two Federal Government’s agencies – Nigerian Ports Authority (NPA) and Oil and Gas Free Zones Authority (OGFZA) to impact negatively on the investments of 33-year old company is uncalled for at a time the country is yeaning to boost revenue and employment.
Till date, the country is witnessing high rate of unemployment amid unpleasant cost of doing business coupled with bottlenecks such as expensive and poor power supply, decadent infrastructural facilities and layers of bureaucratic red tape, among many others. Presently, the country needs as many companies as possible to create jobs and wealth and not the present coordinated attacks on one company by government agencies, who are sending negative signals to the international community that Nigeria is not safe to invest.
Onne Port, which is the most important hub for oil and gas industry in Nigeria, accounts for 65 per cent of cargo export through the nation’s seaport, hosting operations of all major oil and gas companies within its massive free trade zone, was built by Intels and it deserves protection. Likewise, the company should live up to its responsibilities of meeting government expectation as demanded within the purview of law and term of contractual agreement.
Why we fully support the Federal Government in any way to ensure investors carry out their businesses under the laws of the land, we are, however, worried about the problems such might lead to if it is done under any influence of political colouration.
The Federal Government, or rather its agencies, should learn to be cautious when taking certain decisions on issues that are likely to give wrong impression to foreign investors, who are still sitting on the fence carefully considering whether to come into the country or not.
We are also of the strong resolution that investors should learn to adapt to changing legislations in any environment where they operate. The fact that they have enjoyed some level of liberty in the past years is not enough to demand being excluded from any law, old or new, that tends to correct the way things were wrongly done in the past.
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