Bala Usman raises concern over FG’s $100m investment in port development

Hadiza Bala Usman, the managing director of the Nigerian Ports Authority (NPA) has questioned the rationale behind the Federal Government’s over $100 million investment in the development of deep seaports in Nigeria.

According to her, the NPA’s 20 percent stake in the development of Lekki deep seaport project is ‘too high,’ thereby; she disclosed that the NPA is currently working to pay lower shareholding than the 20 percent that was envisaged at the beginning of the Lekki deep seaport project.

“The Federal Government has 20 percent stake in the development of the deep seaport project. The NPA has paid 4.4 percent of the government shareholding but the concern we have as NPA, is if we have the priority to invest a tune of over $100 million in port development,” said Usman in Lagos last week during the media luncheon to mark her 100 days in office.

Usman, who explained that the NPA’s shareholding, which represents the Federal Government, is a comfort shareholding that enables the investor to feel the presence of government for the sustainability of the project, added that the 20 percent might be too high as a comfort stake considering the current state of Nigeria as a nation and the fact that the country has other areas that required priority spending of resources.

“We think that the 20 percent should be scale down and we are discussing with the Federal Ministry of Transport to scale down our shareholding below the 20 percent that is currently provided in the structure as approved by the Federal Executive Council (FEC). We believed strongly that this reduced shareholding will not affect any financial model that the promoter of the Lekki deep seaport is working on,” the NPA boss added.

Usman further pointed that global financiers will appreciate it if the Federal Government says it’s reducing its shareholding in port development and ready to utilise those funds for other priority considerations. “I think that will not be an issue and we are working to pay for lower shareholding than the 20 percent that was envisaged at the beginning of the Lekki port project.”

Holding a different view, Omar Suleiman, former managing director of the NPA, who disagreed with the submission of Bala Usman that the NPA’s 20 percent equity stake in the public private partnership (PPP) model for the development of deep seaports in Nigeria is too high, said that the 20 percent is too small.

Suleiman in an exclusive interview with SHIPS & PORTS DAILY in Abuja recently, said the 20 percent stake from the Federal Government is “too small” considering the enormity of deep seaport projects, where about 50 percent of the total cost of developing the port is used in the construction of breakwater, which ought to be done by government and not the private sector investor.

“Government is leaving much to the private sector than the private sector can handle because the Nigerian PPP model is 60, 20, 20 for private sector, State Government and Federal Government respectively. The total of 40 percent from government cannot do the breakwater and that is why we have not been able to have a deep seaport,” Suleiman added.

Blaming the inability to deliver on any deep seaport project on the country’s poor equity ownership structure, Suleiman said that Nigeria needs a more specific PPP structure for port and that government should naturally fund construction of breakwater in deep seaport projects.

Uzoamaka Anagor-Ewuzie