Chinese Financing and Equity Investment Brings Strategic Influence Over Nigeria’s New Deep-Sea Port
On April 2, it was reported that Lekki Port LFTZ Enterprise, the holding company for Nigeria’s Lekki Deep Sea Port, had received a $221 million equity investment from China Harbour Engineering Company, which is part of a consortium led by Singapore’s Tolaram Group that will also operate the port under a 45-year concession agreement. Under the terms of the investment, CHEC’s Du Ruogang will become the Chief Executive Officer of Lekki Port, while the company also secured rights to name four members to the board of Lekki Port LFTZ Enterprise, and to appoint the chief financial officer, chief technical officer, and deputy chief financial officer.
The investment appears to represent a success for Chinese efforts to build influence over the project despite contributions by other multilateral lenders to the project, including the African Development Bank and the European Investment Bank. This influence advances China’s broader effort to secure access and involvement in ports across the African continent, which has been connected by some analysts to Beijing’s “string of pearls” strategy with possible future military relevance.
The port, which will be Nigeria’s first deep sea port, is located in the Lagos Free Trade Zone in Lagos State. CHEC’s investment had been under discussion at least since October 2019, when Lekki Port secured a $629 million investment from China Development Bank to fund the construction of a container terminal. While some reports claim that Lekki will be the deepest port in Africa, its planned depth of 16.5m puts it behind existing facilities, such as Mombasa Port (18m) and the Port of Malabo (18.2m).
Government authorities in Nigeria have touted the Lekki port project as a critical step toward increasing Nigeria’s capacity to handle international trade. While some reports suggest that the port will have an eventual capacity of 6 million twenty-foot equivalent units (TEUs) per year, Lekki Port advisors Allen & Overy said that the first phase will include two berths and an annual capacity of 1.2 million TEUs, eventually rising to 2.7 million TEUs. Local authorities are considering further efforts to ease the strain on existing port facilities in Lagos, which handles 80% of all shipping traffic in Nigeria. These include a port in Badagry, 50-km west of Lagos, and a facility at Ibom, in the Niger Delta.