The Lekki Catalyst for Nigeria’s Economic Growth

rom 2022, Lagos State will earn about $7 billion annually from a new revenue stream: the Lekki Deep Seaport. At the recent signing of fresh investment in the construction of the seaport, Governor Babajide Sanwo-Olu said it has the potential to create 200,000 jobs and generate an estimated $350 billion in revenue for Lagos over the 45-year concession period.

From 2022, Lagos State will earn about $7 billion annually from a new revenue stream: the Lekki Deep Seaport. At the recent signing of fresh investment in the construction of the seaport, Governor Babajide Sanwo-Olu said it has the potential to create 200,000 jobs and generate an estimated $350 billion in revenue for Lagos over the 45-year concession period. “We will do all we can to ensure the terms of the agreements signed today are delivered within 30 months as agreed,” he said.

The governor will not be alone in looking forward to, as well as working hard for, the completion of the seaport. Nigeria, according to economists, will witness significant economic boost as soon as the Lekki Seaport becomes operational. A 2018 report by PwC – Strengthening Africa’s Ports – predicts that a 25 percent improvement in port performance in sub-Saharan Africa could increase Gross Domestic Product (GDP) by 2 percent.

 “International trade is a primary vehicle for the international movement of capital to developing nations, which ultimately drives economic development,” said Ian Arufor, Partner PwC Nigeria in the report. “As the larger West African economies embark upon, or seek to accelerate, the implementation of their economic development drives, new and/or expanded port access and capabilities are increasingly recognised as key tenets of these programs. This is exemplified by the number of active port development and expansion projects in Nigeria and Ghana.”

The newest seaport in Nigeria, which upon completion will also be the deepest, is part of significant investments being made by the private sector in the development of the Lekki Free Zone (LFZ), an ambitious 16,000-hectare special economic zone that is expected to create 300,000 jobs and catalyse Nigeria’s economic growth. Two of the other biggest investments in the LFZ – Dangote Refinery and Alaro City – are by their nature the most prominent illustrations of the potential the zone brings.

The Trade Gateway

The Lekki Deep Seaport is unique in its size as it will feature two container berths of 680 metres length and 16.5 metres water depth (by comparison, the Apapa Port, which is Nigeria’s current deepest seaport, has a draught capacity of 12.5 metres). The channels would be dredged to 14 metres depth, with potential to reach 19 metres as traffic grows. The breakwater will be 1.5 kilometres long. The seaport will be capable of accommodating fifth-generation ships which can carry 18,000 20-foot containers. Designed to include terminals for containers, dry bulk and liquids, it will accommodate 1.2 million 20-foot container equivalent units.

A financing boost came in the form of a $629 million loan from the China Development Bank will be used for the construction, equipping and early operation of the seaport. Tolaram Group and China Harbour Engineering Company, through a joint venture known as the Lekki Port LFTZ Enterprise Limited, own the project as part of a 45-year concession obtained from the Nigerian Ports Authority (NPA). When completed (estimated to be in 2022), the seaport will be managed by CMA Terminals Nigeria, a subsidiary of CMA CGM, a French container transport and shipping company widely ranked as the fourth biggest in the world.

Successfully managed, at 100 percent operational capacity, the seaport has the potential to re-position Nigeria as the new trans-shipment hub in sub-Saharan Africa. According to Biodun Dabiri, chairman of Lekki Port Board of Directors, the seaport was also strategic for the economic growth of the LFZ. “It would support the massive industrial and petrochemical complex being embarked on in the northern and southern quadrants of the zone; with investment over the next three years peaking at over $20 billion,” he said.

The Giant of the LFZ

Planned on over 2,500 hectares, Dangote Refinery is located in the South East Quadrant of the LFZ and will host an integrated refinery, a petrochemical plant and pipeline infrastructure. Estimated to cost $15 billion upon completion, the 650,000 barrels per day (bpd) refinery will be Africa’s biggest refinery and the world’s largest single-train facility.

It will produce Euro-V quality petrol and diesel, as well as jet fuel and polypropylene. At full production capacity, the refinery is estimated to be able to produce 50 million litres of fuel and 17 million litres of diesel daily. These figures therefore mean that it would not only meet Nigeria’s existing domestic demand but reposition the country as an exporter of refined products.

Ongoing infrastructure on the refinery complex includes crude and product-handling facilities; a pipeline system; access roads; tank storage facilities; a terminal which includes breakwater, jetty and harbor; as well as supporting infrastructure such as administrative building, fire station, security and pump stations. The construction of all these, according to the Dangote Group’s Executive Director, Devakumar Edwin, has already created about 37,500 direct and indirect jobs.

The Civic Heart of the LFZ

People are integral to economic development, and Alaro City in the LFZ illustrates this. Planned on 2,000 hectares and located in the North West Quadrant of the LFZ, Alaro City is a mixed-use satellite city that experts say will provide solutions to infrastructure challenges in Lagos, decongest the mega city, and lead the way in modern city building in Nigeria. The city is designed in such a way that residential and commercial areas are planned in a manner of a model community where people can live, work, learn and play. Launched in January 2019, the first phase of its residential plots has already sold out, while national and multinational companies have already commenced construction of their various facilities.

Alaro City’s masterplan, according to its designer – Skidmore, Owings & Merrill (SOM), is structured around six greenways which are aligned north to south with existing topography. Transport infrastructure is planned to support local economic activity and allow for higher density, mixed-use development. Industrial and logistical development plots are located in the southern part of the city to take advantage of the adjacent inter-city transport corridor; while residential, mixed-use and commercial development plots are located in the north with views to the lagoon.

Alaro City is being built by Rendeavour, the largest city developer in Africa, in partnership with the Lagos State Government. Rendeavour, currently building seven satellite cities in five countries (Nigeria, Ghana, Kenya, Zambia and the Democratic Republic of Congo), has already shown the economic growth potential of its cities in countries where its projects are at more advanced stages or complete.

 “These cities, on more than 12,000 hectares of land, are providing homes, offices, schools, hospitals and industrial parks within well-planned urban environments, delivering new roads and utilities such as power, water and ICT, to thousands of people today, and to hundreds of thousands in the future,” said Stephen Jennings, Founder and CEO of Rendeavour during the launch of Alaro City. “Looking to our work in Kenya, Ghana and Zambia as examples, we have invested approximately $300 million of our own capital to develop sustainable and inclusive new cities. In turn this has catalysed well over $1 billion in additional investment in construction, plant and equipment in these countries by indigenous and multinational companies looking to build their own futures on this great continent.”

This trend will increase as Lagos, Nigeria and the African continent begin to slowly but surely grow their economies to an extent that a significant positive shift is noticed in the continent’s contribution to global economy. The more this needle is pushed upwards, the bigger a purse the administrators of Lagos will be armed with to build a megacity that can adequately cater to its exploding population; as well as live up to its status as an example of the pathway to Nigeria’s economic and development future.


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