Emmanuel Addeh in Abuja
The Ogun State Government is set to sign a fresh investment agreement with a United Arab Emirates-based company tomorrow (Wednesday) on the Olokola Deep Seaport project, despite an existing Memorandum of Understanding (MoU) between the state and the Dangote Group on the project, THISDAY learnt yesterday.
The planned agreement, which is expected to be signed in Paris, France, has raised questions over its relationship with the earlier understanding with the Dangote Group and whether the new arrangement could potentially overlap with interests already covered by the existing MoU.
THISDAY gathered that three years ago, the Dangote Group, the Ogun State Government and the Ondo State Government entered into an agreement to establish the Olokola Free Trade Zone Company (OFTZC) as a special purpose vehicle (SPV) to drive the development of the Olokola Free Trade Zone and related investments.
Under the ownership structure agreed by the parties, Dangote Group holds an 80 per cent stake in the OFTZC, while the Ogun and Ondo state governments hold 10 per cent each. The arrangement effectively places the three parties within a common vehicle through which the development of the zone and associated investment opportunities are to be pursued.
Against this background, THISDAY was told that the proposed signing of a separate agreement by the Ogun State Government with the new company in France raises questions about the status and future of the existing SPV and portends a grand plan to sabotage the already existing MoU.
Besides, the new agreement which may cover interests or assets already contemplated under the OFTZC arrangement, could create an overlap between the two structures and potentially put the existing SPV in jeopardy, particularly given Dangote Group’s controlling 80 per cent interest in the company.
Sources familiar with the development told THISDAY last night that the Ogun government had been engaging the UAE-based company ahead of tomorrow’s proposed signing, although the identity of the company was still being kept under wraps as of yesterday.
The sources said the company already has an MoU with the Dangote Group relating to the investment opportunity, raising questions about the rationale for the state entering into a fresh agreement with the same company in respect of the Olokola project.
The details of the proposed agreement, including its scope, financial commitments and the specific role envisaged for the UAE-based company, were not immediately available.
The development is coming against the backdrop of Ogun State’s recent avowed efforts to accelerate the development of the Olokola Deep Seaport and attract additional private capital into the project.
Dangote Group has been closely associated with the project, with the company having expressed interest in the development of the deep seaport as part of its wider investment plans in Ogun State. The group has also continued to deepen its investments in the state.
The fresh agreement being contemplated by the Ogun government, however, puts the existing relationship between the state and the Dangote Group over the Olokola project under renewed scrutiny, particularly given the reported MoU between Dangote and Ogun.
A source familiar with the matter said if the proposed signing goes ahead, it could provide more details about the new arrangement and its relationship with existing agreements concerning the project.
The source, who spoke on condition of anonymity because the discussions had not been formally announced, wondered why the state was proceeding with the planned agreement despite being on the board of the Olokola seaport and trade project.
The Ogun government has in recent years said it is intensifying its efforts to attract investments into the Ogun Waterside axis, with the Olokola Deep Seaport regarded as one of the strategic projects expected to expand the state’s industrial and logistics capacity.
Governor Dapo Abiodun has repeatedly expressed the administration’s commitment to developing the axis and leveraging its proximity to major industrial clusters to attract investment.
However, the decision to proceed with a fresh agreement with the UAE-based company, against the backdrop of the existing Dangote MoU, has created questions over how the two arrangements would coexist and whether the new deal represents a separate investment opportunity or one connected to the existing Dangote-backed plan.
The Dangote Group and the Ogun state government had not publicly commented on the matter as of last night.
The Olokola Deep Seaport project is a proposed deep seaport development in the Ogun Waterside area of Ogun State, conceived as a major maritime and logistics hub to support industrial activity in the state and the wider South-west.
The project has attracted interest from the private sector, including the Dangote Group, as the state seeks to leverage its coastal location to expand trade, manufacturing and export activities.
The project is also expected to form part of Ogun’s wider industrialisation strategy, particularly around the Ogun Waterside axis, which the state government has identified for large-scale investments.
The proposed port is envisaged to provide additional maritime infrastructure for the movement of raw materials and finished goods, while strengthening connections between the state’s industrial clusters and international markets.