Lagos Gets N3.9bn Derivation as New Oil-producing State

•Woos foreign investors at US-Africa summit

Segun James

As one of the latest oil-producing states in the country, the Lagos state government yesterday disclosed that it had so far realised the sum of N3.911 billion as derivation, but  lamented that production had been hampered by challenges faced by the company managing its exploration and exploitation activities.

The state’s Commissioner for Energy and Mineral Resources, Mr Biodun Ogunleye, disclosed this during a ministerial press briefing to mark the first year of the second term in office of Governor Babajide Sanwo-Olu at Alausa, Ikeja.

He said that Lagos which joined the league of oil-producing states in the country in 2016, received the amount as its share of the 13 per cent derivation fund.

Oil-producing states,  including  Abia, Akwa Ibom, Bayelsa, Delta, Edo, Imo, Ondo and Rivers, are entitled to 13 per cent derivation fund from the Federation Account.

Ogunleye said: “Between 2018-2019, the state government received from the federal government N131 million as part of oil derivation. And, between 2020-2021, the Lagos state government received N3.78 billion.

“But the owners of the assets have been having issues among themselves. And as long as they could not produce, there would be no money for Lagos.

“The state government is engaging them to ensure that they return to the field. And we hope that before the end of the year, they will find new technical partners and they can go back to production.”

Dwelling on the community electrification programme, the commissioner said the governor had approved the procurement of 20,000 units of prepaid energy meters to target low income communities in the state.

‘’Approval was further expanded to utilise funding to catalyse full metering across the state via collaborations with electricity Distribution Companies (Discos) in Lagos and a leading smart metering solution company, ElSewedy Electric,” he added.

The commissioner, who frowned on the increasing death rate from gas explosions in the state, hinted that the state government will soon introduce stringent measures to regulate the operation of Liquefied Natural Gas (LNG) vendors in the state.

Recall that Yinka Folawiyo Petroleum Company Limited (YFP), a wholly-owned indigenous firm and operator of the OML 113 offshore Lagos, commenced the production of crude oil from the field in 2016.

Meanwhile, the Lagos State government has assured the international business community that as one of the largest economies on the continent, Lagos remains the best choice to do business in Africa.

As part of this move and to increase its economic growth and consolidate its position as Africa’s economic hub, the state government called on foreign investors, particularly those interested in investing in Nigeria, to consider Lagos as the best destination for their investments.

The government committed international investors yesterday during the panel session on “African Infrastructure Investment: Impacts and Returns,” through the Commissioner for Commerce, Cooperatives, Trade and Investment, Mrs. Folashade Ambrose-Medebem, and her Innovation, Science, and Technology counterpart, Mr. Tunbosun Alake, at the ongoing 2024 US-Africa Business Summit in Dallas, Texas, United States.

Besides, the state also expressed readiness to partner with any investors with a strong assurance that the government will provide a conducive and friendly business environment for predictable returns on their investments.

Addressing delegates during the panel session that focused on infrastructure as an investable asset globally and how African countries can benefit from over $30 billion fund being set aside by the United States and some partner nations through identified financial instruments, Ambrose-Medebem and Alake expressed Lagos’ readiness for business and its openness for new investments by showcasing the potential of the State.

The summit, hosted by Corporate Council Africa brings together political and business leaders from across Africa, the United States, and other regions for high-level dialogue and networking in Dallas Texas, United States of America.

Ambrose-Medebem assured the business community that Sanwo-Olu’s administration in Lagos State had created an enabling environment for investments and businesses to grow in the state in the past five years.

She said Lagos has a huge population of over 25 million people, stressing that more than 60 per cent of the population is youth. She added that  Sanwo-Olu and his administration had invested in critical infrastructure projects such as rail, water, health, and housing.

“There is Blue Line rail in Lagos State that takes approximately 500,000 people per day. There is another Red rail line that was just commissioned and will start commercial operations very soon. The new Red Line rail service will move close to 1 million Lagosians daily when it commences operation.

 “The Lagos State Government has provided a lot of infrastructure for businesses to thrive in the State. We have done a lot in the areas of health, education, technology, and many other sectors.

“For agriculture, over 200 hectares of land has been allocated to build the largest food hub infrastructure in the eastern part of the State. In addition, we also have the Lekki Deep Sea Port, which is about a $1.53 million investment. Lagos is open for business and investments,” she added.

Also speaking, Alake said: “Over the past three and a half years, about $3 billion worth of investment has come into Lagos with high numbers of start-ups and scale-ups in the continent. So, Lagos has a sheer number of start-ups, the largest start-up network in the continent.

“Investments that have come to Lagos over the past three years have created networks of unicorns and high scale up to the combined value of $5 billion and this has created thousands of jobs for young people.

“Lagos State Government has also done projects from a Public-Private Partnership (PPP) perspective, and one of them is the 3,000 kilometres of fibre cables that we have done on a PPP basis.”

Some of the delegates who visited the Lagos stand during the summit expressed their readiness to partner with the Lagos State Government for business and partnerships that will be of mutual interest.