THERE is no doubt about the government’s good intentions in rolling out the executive orders on the ease of doing business in the country in order to enhance foreign direct investments (FDIs). But to analysts, the expected rise in the inflow of FDIs may be a mirage, if the relevant agencies fail in the discharge of their assignments. They note that the face-off between a oil firm, Intels Nigeria Limited (INL) and the Oil and Gas Free Zone Authority (OGFZA) is not good for the policy’s quest to attract FDIs.
Issues
The bone of contention between the parties is the alleged refusal to renew Intels’ 2017 Operating License, which it has paid for. The Free Zone Authority is insisting on INL paying all charges and fees before it gets the license. Besides, there are issues of imposition of land charges on INL, nullification of its Industry Wide Standard Tariff (IWST) and other port related charges and the alleged campaign of calumny against it. There are also claims that Intels has not been paid for the use of its facilities at Onne and Heliconia Park Estate. The crisis is said to be taking its toll on INL, which sources say, is contemplating going to court.
Distraction
Watchers are afraid that the disagreement may send a wrong signal to extant and prospective foreign investors that consider Intels as a model of a successful FDI. They note that the authority’s role does not tally with that of the government at attracting and boosting investment in Nigeria particularly in the oil and gas sector.
Accomplishments
Intels has overtime made an impact in the oil and gas sector, real estate, concessioning of projects and maritime, where it has set up a model port in the country. As the government forges ahead in its quest to woo more foreign investors through its reforms to enhance the ease of doing business, it should also sensitise its agencies which will implement the policy to be transparent because would-be investors are watching.
Licence renewal
In the interest of fair play and justice, the government is under obligation to renew INL free zone licence which it paid for after filing the 2016 annual returns along with other formalities. This is imperative because the land charges being disputed by INL are not due until the dispute is settled.
In order not to cripple INL’s operations, it should be paid the $27,548.85 and N24,912,510.42, which it is being owed for services provided as well as $1,719,246.28 for the use of its facilities at various locations in Onne, Heliconia Park Estate, Aba Road Estate both in Port Harcourt, Rivers State and Warri, Delta State.
Lease payment
On the issue of lease and sub-lease surcharge, which is still in dispute, Intels should be excluded from the payment by the interpretation of Section 14 of the Free Zone (Tariffs & Other Charges) Order 2015, which exempts concessionaires like INL from OGFZA’s charges. According to the provision, the tariffs are only applicable to individual licensees. Moreover, since Intels got the premises it occupies in the ports from the Nigerian Ports Authority (NPA), experts say OGFZA cannot administer the land, which is owned by NPA.
Conclusion
In the interest of the parties, the oil and gas sector and the need to further attract FDIs, OGFZA and INL should begin talks on how to resolve the matter amicably. They should not play politics with the issue in the larger society interest.
Jooda is a Lagos-based public analyst