Ease of doing business policy: why OGFZA should treat INTELS fairly

by | November 23, 2017 12:11 am

Undoubtedly, the various measures that have been enunciated in recent times by the Federal Government particularly in the realm of rolling out of Executive Orders to eliminate difficulties in the Easy of Doing Business in all sectors of the economy, and as such promote Foreign Direct Investment (FDIs) in Nigeria have been very laudable and forward looking.
However, analysts believe that the subsequent increase in the level of inflow of FDI into the Nigerian economy, which should be the positive outcome of the policies that are being initiated could be a mirage, unless the agencies of government executing the measures, carry out their assignment with sincerity and integrity, backed by the requisite political will.
For instance, the current unnecessary face off being orchestrated against the Oil and gas giant, Intels Nigeria Limited (INL) by the Oil and Gas Free Zone Authority (OGFZA) over various matters is portraying the Ease of Doing Business initiative in negative light and acting as a discouragement to the quest to attract FDI into Nigeria.
For the benefit of hindsight, a major issue of contention between the two parties is the refusal of OGFZA to renew the 2017 Operating License for Intels despite paying in full, the renewal fee for the licence. The Free Zone Authority is insisting that INL has to pay all charges and fees demanded by it for the license to be released.
There are also issues of imposition of land charges on INL by OGFZA, nullification of INL’s Industry Wide Standard Tariff (IWST) and other port related charges. OGFZA management’s also has a penchant for conveying to agencies and clients, messages that are injurious to INL’s business interest and reputation. Also, non-payment for INTELS’ premises which is occupied by OGFZA at Onne and Heliconia park estate.
The crisis which is akin to a mass action against Intels because they are multifaceted in nature, are already causing a serious embarrassment and financial setbacks to its operations. Little wonder that the company has been compiling all its losses, pecuniary and otherwise and may institute legal actions against the OGFZA at the right time if the harassment persists.
The ongoing crisis between the two bodies has been considered to be unfortunate and a situation which is antithetical to the government’s drive to attract FDI. This is because, it has become a distraction and a source of discouragement to prospective foreign investors and the existing ones, which have looked up to Intels as a model of a successful FDI.
Beyond this, OGFZA being a government agency of sort, its negative measures against INL have indeed been a paradox. This is in view of its expected role in the implementation of the renewed efforts of the Presidency at attracting, and boosting investments in Nigeria particularly in the oil and gas sector which is currently the mainstay of the economy.
It should also be realized that Intels, which founder is an Italian has overtime because of its accomplishments in Nigeria, not just in the oil and gas sector but also in estates, concessioning projects and maritime, where it has in an enviable way, set up a model port in the country has proved to be a very law abiding corporate entity which prospective and existing FDIs have looked up to.
Thus as the government forges ahead in its quest to woo more foreign investors to the economy through its reforms to enhance the Ease of Doing Business, it should also sensitize and educate its agencies which will implement the measures to be transparent because potential investors are watching, but the current actions of OGFZA against INL cannot be said to be encouraging them.
License Renewal
However, in the interest of fair play and justice which are integral indices of the Executive Orders, OGFZA is indeed under obligation to renew INL free zone license because it has paid the prescribed free zone license fees for the 2017 Operating License after filing the 2016 annual return along with other formalities. This became necessary when the land charges being disputed by INL are not due until the dispute is settled.
So as not to cripple INL’s operations, it is also imperative that OGFZA needs to pay its debts to Intels including; $27,548.85 and N24,912,510.42 for the various services it has provided for it as well as the sum of $1,719,246.28 for use of INL’s facilities by OGFZA at various locations including 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 being demanded by OGFZA and which is still in dispute between it and INL, legally, Intels should be excluded from the payment by the interpretation of S.14 of the Free Zone (Tariffs & Other Charges) Order 2015 which expressly exempts Concessionaires like INL from OGFZA’s charges by providing that the tariffs are only applicable to individual licensee .
Also for the fact that the premises Intels occupies in the ports were granted by the Nigerian Ports Authority (NPA), which is the owner of the land, OGFZA does not have any legal authority to administer or manage land vested in the NPA in any manner whatsoever.
The truth is that in the interest of the two parties, the oil and gas sector and the need to attract needed FDI to the economy, OGFZA and INL should urgently enter into discussions with a view to resolving the matters amicably. Politics in whatever guise should however be removed from the negotiations, while fairplay and transparency should prevail for results to be achieved.

Simon Jooda

Simon Jooda, a Lagos based Public Analyst