Bamanga Usman Jada is the Managing Director/ Chief Executive Officer Oil and Gas Free Zones Authority (OGFZA). In this exclusive interview with Blueprint Newspapers, he speaks about his achievements and other national issues since he was appointed by President Bola Ahmed on October 13, 2023.
Could you please tell us your achievement since you came on board?
The Oil and Gas Free Zones Authority (OGFZA) is a regulatory agency that is saddled with the responsibility to regulate, administer and manage activities within the nation’s oil and gas free zones. Key in our mandate is to attract foreign direct investment into the country and also local direct investments into the zones.
It is the first specialised economic zone to be introduced in the whole world. Nigeria is the first country that has given this model to the world. A lot of countries have replicated this module that Nigeria introduced to the world. We have become a role model to the global free zones community.
After our own, Iran, Saudi Arabia, South Africa, United Arab Emirate and China and so many others came up with something similar. They copied the Nigerian model.
You know, we have free zones that handle industrial and agricultural parks; this one is specifically for oil and gas. It is a specialised energy zone.
The wisdom of those who came up with this idea is that Nigeria is a hydrocarbon-producing nation. It is the resource that gives us eighty per cent of our foreign earnings. It is critical for our national development. So, the sector needs special attention. That is why our leaders came up with the idea of having a regulatory agency that will be saddled with the responsibility to handle this special sector that needs special attention.
That is why in 1996 this agency was created and other countries started copying what we have done realising that it is a success and has added a lot of value in the Nigerian oil and gas industry.
What is the volume of investment that the zone has attracted into the country?
The concept of this model is to make it easy for companies in the industry to grow, expand and create jobs for our teeming youth. Also, through the model we have created an enabling environment for foreign direct investment into our zones and the country. From that time to date we have been able to attract investments worth over $34 billion into the country.
The investments came with a lot of benefits; technology has been transferred into the system, infrastructures have been built, and communities where the projects are cited have also benefited immensely through Corporate Social Responsibilities.
At this point, I will tell you that this concept has proven beyond reasonable that it is the most effective tool or catalyst for economic growth and development because it comes with a lot of incentives. It provides incentives for businesses to come in and stimulate growth.
There are a lot of advantages that the concept came with. They are numerous. For example, if you are an investor within the zone, you will be exempted from paying custom duties for the equipment you need to set up your manufacturing platform. That goes a long way in reducing the cost of setting up your manufacturing plant. If your cost of production is low it would translate to your factor cost and you will become more competitive and that is why businesses are being attracted.
Also, if you are operating within the zone, you are exempted from paying local federal and state taxes. That goes a long way in increasing your disposable income because your net income will be higher and if it’s higher, it will give room for expansion. It will also help you recoup your investment within the shortest possible period which is important for every business man.
How is your zone keying into the agenda of President Tinubu?
I understand that the president has eight key priority areas and one of them is to drive industrialisation, to create jobs. He has promised 13 million jobs for Nigerians and this is attainable through the special economic zones concept.
Since we came onboard, under the leadership of President Tinubu, a lot has happened. When he came onboard he took the bold step to get rid of fuel subsidies and it is always important to look at sectors that will contribute positively to the economy and support them. This is why he looked at our sector and said if you subsidise this sector you are subsidising productivity and he is a strong believer in productivity not consumption and this was a consensus among global policy makers. The best way to grow an economy is to subsidise productivity not consumption. This is because if you subsidise consumption you are not building a solid economy. The president believes in building a strong economy that can withstand any shock and can be sustained. That is why in his wisdom he removed subsidies and that has encouraged investors into the sector.
Recently, over sixty per cent of direct foreign investment that came into the country came through us simply because of the incentives. You know that taxes are important and taxes come in different forms. There is physical tax you collect and give it to the consolidated revenue funds for the government to use for public good and there is tax that you get through infrastructure, through jobs, through technology transfer to through skills. These are the ones we are promoting. The custom duties that we don’t collect and taxes that they don’t pay within the zones, we are getting them in form of employment, technology transfer and infrastructure development.
How many jobs has the zone created under this administration?
I just want to give what we have recorded under President Bola Ahmed Tinubu. Investors believe that our president is a business-friendly president. That confidence alone goes a long way in attracting investors and in restoring the confidence of existing investors.
Two months ago, I was at Onne in Rivers state, and the vice-president, Kashim Shetima, and many ministers were there to commission a facility upgrade by APM terminal.
The APM terminal commissioned a facility that they upgraded with over $150 million and that facility alone, going by global best practice can generate 25, 000 jobs. The same investor has pledged an additional $500 million investment into our system.
We were also able to attract investments into Blue and Green Hydrogen in our liberty oil and gas in Akwa Ibom state. That investment is a green investment and you know the world is battling climate change and the president is keen on combating the effect of climate change. He is encouraging green investment. The interesting thing about their product is that they are green and for export, and it will turn Nigeria into a centre of Blue and Green Hydrogen in Africa, which is great.
That facility alone is coming with over 500, 000 jobs, and not quite long we had a ground-breaking of a facility in Onne, Rivers state, by Next Gas Producing to develop a depot/warehouse, that facility is for 50 metric tonnes of liquefied petroleum gas (LPG). You know, the president is promoting clean cooking and the CNG programme which will cut down the cost of transportation and it is more environmentally friendly compared with the dirty fuel that we are using today. It is good for the environment and the pocket. If you convert your vehicle you save about 70 per cent of what you would have spent using petrol. Not just that you are able to save money, you are also mitigating the effect of climate change on the environment.
On December 10 in Onne, we would have another ground-breaking for a partnership between the Authority and Portland gas to set up a conversion plant within the zone. Converting one truck is equivalent to converting 20 smaller vehicles in terms of emission releases and we have a lot of trucks. This will cut the price of transportation, and if the cost of transportation is low, it will bring down the price of gas. This is why Mr. President is supporting the CNG initiative.
Also, one of our investors invested in solar and he is generating 5mw of electricity and the Brass oil and gas in Bayelsa state has attracted attention and there is a company that is ready to set up a methanol plant with fertiliser and grass processing plant of over $3 billion. That is also a substantial achievement.
Not long again, we had another ground-breaking LPG facility in Akwa Ibom state. That project is over $150 million and has the capacity to generate over 200, 000 jobs.
What are the benefits of producing within the zones?
If you produce within our zones, you can sell your products 100 per cent into the customs territory. The wisdom behind it is that when you produce you can export and earn forex for our country. We need to stabilise our currency.
Also, if what you produce is needed within the custom territory, Nigeria is a big market; it is the biggest market in Africa with over 200 million people. We are not restricting what is produced in the zone from coming into customs territory for the benefit of Nigeria and Nigerians. The wisdom is if you don’t have it at home, let us not take it outside.
If the product is coming into customs territory, Nigeria is not losing tax and customs duties. Because if you produce within our zone and you want to sell within custom territory, we have customs in our offices and we work closely with them. When people hear about customs they think they are responsible for high prices of commodities in the market. That’s a wrong perception. They are the biggest enablers of export. They play a vital role in facilitating trade.
How many zones do you manage across the country?
We don’t have so many zones, but we believe in efficient compliance. If you notice, Presidential Enabling Business Environment Council (PEBEC) during its last assessment scored us 100 per cent in its assessment. We were also recognised by the Financial Times of UK as the best performing free zone in the whole of Africa and one of the best in the world. In terms of compliance and transparency, we were also rated best by The Presidential Enabling Business Environment Council (PEBEC). Recently, the Bureau of Public Service Reforms recognised the Authority as the best agency of the government in terms of ease of doing business.
We have presence where we have hydrocarbon. We have presence in Bayelsa, the state where oil was discovered; we also have presence in Rivers state – that is our pioneer oil and free gas zone in Onne. We in Akwa Ibom state, the liberty oil and gas free zones; we are in Warri, Delta state, and Lagos state too.
Just like I mentioned earlier, we attract foreign and local investors. A lubricant plant was developed fully by a Nigerian businessman in our Lagos zone and that facility is producing 240 million litres of lubricant per annum for export and we are getting forex from that facility. It is an over $400 million facility.
Also, recently the president in his wisdom graciously approved the establishment of Orashi Energy free zone in Imo state. That is the first energy free zone to be established in the entire South East of Nigeria. It shows the president has the people of the South East at heart. It will turn Imo state into an international centre for gas.
What is the level of collaboration with other agencies in pursuing your goals?
In terms of fostering partnerships with sister agencies and critical stakeholders, recently, we had a strong collaboration with the Nigerian Financial and Intelligence Unit (NFIU) on how to work together to ensure that our zones are not used for illicit financing. We do our due diligence to ensure that funds from foreign and local investors are not proceeds of crime. We ensure that funds are clean and legitimate.
What about the host communities?
The host communities Corporate Social Responsibility is part our requirement. Today, all our investors embark on different activities as part of CSR, including us the regulator of the zone. We ensure we participate to ensure that the interest of the communities where we operate is taken into account.
There are a lot of road projects that were contracted by our licensees. Some built hospitals while others built schools. Some others built women and youth empowerment centres. They train women and youth and empower them with starter packs. They also follow up on them to ensure that they are they establish businesses
Some of our investors have awarded scholarships to youth to study at home and abroad. It may interest you to know that the scholarships are on an annual basis. CSR is part of our requirement from day one. Before we license you, we must see your CSR policies.
What is your message to Nigerians with regard to the Renewed Hope Agenda of the president?
If you look at the eight priority areas of the Renewed Hope Agenda of Mr. President, they are all important for our national development and we must agree that when the president came on board, we were using 90 per cent of our revenue to service our debts which was a very unhealthy situation, but the president was able to reverse it from 98 per cent to 67.
I advise Nigerians to be patient with the president. Reforms come with pains, but it is temporary.
