Condemning NEPZA’s Failure to Save Africoat in the Hands of LADOL
The Nigeria Export Processing Zones Authority (NEPZA) abdicated one of its functions of supervising and co-coordinating “the various functions of various public sector organisations operating within the export processing zones and resolving any dispute that may arise among them,” when it allowed the Lagos Deep Offshore Logistics Base (LADOL) to frustrate Africoat out of business at the LADOL free zone in Lagos.
In contrast to Nigerian Ports Authority (NPA)’s commitment to protect foreign investments in Nigeria, NEPZA’s negligence of its mandates has caused Nigeria to lose a huge amount of actual and potential investments as prospective investors who witnessed when the Lagos free zone operator dealt with the American company obviously felt that Nigeria is not a good destination for investments.
Africoat had raised the alarm that its staff and management were barred from its facility by LADOL and its free zone management company – Global Resources Management Free Zone Company (GRMFZC) by virtue of their refusal to issue the requisite CERPAC visas.
Africoat had also accused LADOL of failing to provide any services under the service agreement between the two companies.
Indeed, LADOL, which is a mere tenant of the NPA, has been abusing the NEPZA regulations, taking advantage of the loopholes and hampering foreign investments
Due to NEPZA’s obvious complicity in the abuse of the free zone regulations, it has demonstrated an unwillingness to caution LADOL.
With NEPZA’s inaction, Africoat sustained terrible losses and is unable to operate in the zone.
The question agitating the minds of potential investors is: If NEPZA is indeed going to let foreign investors suffer under LADOL’s hostility, what is the purpose of a free zone, and which company would want to operate in the free zone?
The international oil companies (IOCs) have also raised the alarm over NEPZA’s failure to control LADOL.
The multinational oil majors who are the major clients of Africoat are concerned that NEPZA allowed the dispute between LADOL and foreign investors in the free zone to escalate to the point of hampering further investments in the LADOL zone.
Africoat’s claim that LADOL unlawfully refused to renew its operating licence and excluded it from its own yard has not been investigated by NEPZA.
According to the US firm, this had resulted in the loss of several lucrative business opportunities, including contracts with Chevron and ExxonMobil.
Africoat’s Free Zone operating licence was later issued by LADOL after direct instructions from the Nigerian Ministry of Industry, Trade and Investment but the company remained barred from its facility and NEPZA did not deem it fit to save the company’s investments.
LADOL and GRMFZC were alleged to have administered the NEPZ Act in a manner that is allegedly contrary to the Act’s intention. Unfortunately for Nigeria, NEPZA watches in admiration as LADOL sabotages President Muhammadu Buhari’s efforts to attract investments.
LADOL and GRMFZC were alleged to have implemented regulations that flout contract agreements and put both local and foreign businesses at a disadvantage.
With the sacking of Africoat, the entire LADOL free zone is currently underutilised.This underutilisation not only threatens Nigerian jobs but also threatens local content aspirations and the commitment of the Nigerian Content Development and Monitoring Board (NCDMB) to increase local content from 28 per cent to 70 per cent by 2027.
LADOL zone is virtually empty and devoid of any tangible project development.
LADOL’s disputes with foreign businesses have raised concerns about the monopolistic control it holds over the free zone.
The disputes have also exposed the lack of capacity of NEPZA to carry out its core mandate of resolving disputes in the free zone.
The protracted legal battles between LADOL and its major tenants have also led to the current underutilisation of the LADOL free zone.
It is a common knowledge that foreign investors do not want to invest money and expertise if the risks of interference to their operations outweigh the potential for returns.
The federal government created the free zones to attract local and foreign investments and not for them to be monopolised by the free zone managers.
But rather than intervene to save inflow of investments into the free zone, NEPZA was said to have taken sides with the free zone manager to stifle the operations of Africoat and send many Nigerians back to the labour market.
NEPZA’s inaction is an affront to President Muhammadu Buhari’s administration, considering the efforts this administration has made to woo investors.
President Buhari should act fast to reform NEPZA before it destroys Nigeria’s reputation in the global business community.
…Udumebraye writes from Warri, Delta State