Lagos Free Zone to ‘add $12bn to Nigeria’s GDP’, invites firms to set up shop22 May, 2023
Dinesh Rathi, managing director of the Lagos Free Zone (LFZ), says with businesses showing significant interest in the area, the company aims to contribute about $12 billion to Nigeria’s annual gross domestic product (GDP) by 2032.
Speaking on the firm’s plans at a recent meeting with journalists at LFZ’s headquarters in Ibeju Lekki, Rathi said the target would be achieved when the zone is fully functional, with more companies taking advantage of the opportunities in the area.
He said the free zone requires at least 150 companies to operate at full capacity.
“If you look at the zone and the master plan, today, we are having 24 companies operating inside the zone, once you have 150 to 160 companies operating inside the zone, and if you put a number based on that, we can easily get an output equivalent of $12 billion,” he said.
“We did our workings and that is our vision. And then, with that number, you will be 2 to 3 percent of the national GDP.
“This whole free zone along with the Lekki port can be a game changer in the years to come. And this has happened in the case of China and Dubai.”
As implied by Rathi, who doubles as the chief executive officer (CEO) of LFZ, the $12 billion target is dependent on the influx of companies in the zone.
At the moment, only Indian corporates like Kellogg’s, Colgate, Arla Foods, and BASF Corporation, are tenants in the free zone as LFZ invited firms from the South Asian country last month to set up shops in the area.
LFZ SEEKS NIGERIAN FIRMS TO OPERATE IN THE ZONE
However, the managing director said plans are afoot to onboard local companies into the zone.
“We are in constant touch with a lot of Nigerian operators to get them inside the zone and leverage the port and the zone to create, not only a hub for domestic sales but also for exports under the continental free trade agreement and under the ECOWAS treaties,” he said.
“So, that is our goal: to get as many people as possible to come and operate in the zone.”
As part of its growth plans, the company said it also intends to develop a gas infrastructure to serve the electricity needs of companies in the area.
TheCable learnt that LFZ has signed a 20-year gas infrastructure development agreement (GIDA) to connect the zone with the national gas transportation grid.
According to the organisation, Optimera Energy LFZE, a consortium of Falcon, FHN and ND Western, will implement the project and “deliver piped natural gas to all LFZ tenants”.
Since LFZ’s development kicked off 10 years ago with the aim of enhancing the ease of doing business, the firm said it has recorded “over 23 registered enterprises, manufacturing, and logistics companies”.
Promoted by Tolaram Group, LFZ sits on 850 hectares of land in Lagos and houses the Lekki deep seaport inaugurated by President Muhammadu Buhari in January this year.
At the meeting with journalists, Rathi said “the LFZ has been able to attract $2.5 billion as foreign direct investment (FDI)”, so far.
While the figure is expected to double to $5 billion over the next 10 years, TheCable understands that the FDI represents the aggregate funding for the development of the zone — including the acquisition of the land, and the Lekki port.