Analysts kick against replacing Afriland with Walmart in Falomo shopping complex saga

Strong indications emerged over the weekend that the reasons adduced by the Lagos State government for revoking the Falomo Shopping Mall joint venture being managed by Afriland may have been a smokescreen for a more startling  agenda that stabs at the heart of fair market competition.

Reports have suggested that political intrigues and related machinations between the immediate past government of Babatunde Fashola and the present leadership in Lagos State Government may have played a central role in the decision to withdraw the right of Afriland to develop the shopping mall in line with the earlier agreement between the private and public sector partners.

The Lagos State government has, however, claimed through a statement signed by the Lagos State Governor, Akinwunmi Ambode’s, Chief Press Secretary, Habib Aruna, that the revocation or cancellation of the concession was done given its discovery that it was “grossly detrimental to the interests of the people of the state.”

Sources close to Lagos State Government however told Hallmark that the new leadership in the State was interested in replacing some of the structures that gave the immediate past leadership of the State strong affection and an adoring  image.

The source said that one of such vestiges of the past government was the concession of the Victoria Island-based shopping Mall to Afriland in partnership with the government.

According to the source, Walmart, the global United States of America retail giant seems to have gained favour of the new government in the state as the incumbent governor is determined to show the company that the state government was determined to collaborate with the retail behemoth to set down its feet in the state.

The state’s desire to work with Walmart relates to the new administration’s determination to chart a distinct and easily recognizable path of its own, while also encouraging fresh high profile foreign investment in the state.

Industry commentators suspect that the move to revoke the shopping Mall agreement may also have its foundation in the deeply messy state politics and individual business interests of those inviting the global retail Czar to establish a presence in Lagos.

Keen industry watchers were , however, of the opinion that developing a shopping mall through home grown talent and collaborative domestic financial arrangements would key into the economic vision of the President Muhammadu Buhari’s administration with immediate focus on growing local entrepreneurship and creating more indigenous jobs for local youths.

Others fear that encouraging a large foreign retail firm such as Walmart to boldly upstage indigenous competitors might encourage a dimming of the bright opportunities C-level managers in Nigeria have gradually assumed but are increasingly losing as a result of the recruitment practices of many foreign owned companies.

Another dimension of the problem is the potential pressure on the country’s foreign exchange as a result of massive foreign exchange demand by the retailer and the huge outflow of foreign of repatriation of dividend payments and the payment of foreign staff in United States (US) dollars.

Director General of NACCIMA, Emmanuel Cobham, told Hallmark in a telephone interview that he needed to do more consultations to get deeper information on the matter, he was of the opinion that the situation was still too fluid and obscure for anyone to make meaningful comments.

He explained that Lagos State was one of the States that promotes enterprise which helps it to drive tax and will it would be shooting itself in the foot if it does anything that would stifle indigenous entrepreneurship in the State.

”Besides the government is new, if it is doing that sort of thing so early in the life of the administration something fundamental must be wrong with its broad economic philosophy. Sometimes we are quick at make snap judgements and this is dangerous. But I will do more consultations and if I get the facts I will call you. There must be something beyond the surface information,” He said.

Former Managing Director of the defunct ACB International , Emma Nwosu, said, ‘government sometimes has better information than the public which prods them to take certain actions that on the face of it might appear ill digested.’

However, he advised that government should always give priority to the growth and development of domestic entrepreneurs at all times to achieve economic benefits for the country.

With a portfolio size of over N10 billion and one of the largest land banks in Nigeria, Afriland says it is strongly committed to creating a world class project, which will act as an economic magnet for central Lagos, creating opportunities for Lagosians and which crucially has been structured to ensure on-going value will accrue to Lagos State and to Lagosians.

‘’Afriland Properties PLC and the Lagos State Development Property Corporation (LSDPC), acting on behalf of the Lagos State government, established a Special Purpose Vehicle (SPV) which is jointly owned by the parties for the specific purpose of developing the Falomo project. Under the terms of the agreement, the SPV- Falomo Shopping Centre Development Company Ltd – was granted a concession to, amongst other things, develop, build, operate and maintain the Project on a Build, Operate and Transfer (BOT) basis.

Afriland paid N50m (fifty million naira) to LSDPC as an expression of interest in the redevelopment project, ” said Uzo Oshogwe, MD/CEO Afriland Properties Plc

It added that, the contract was negotiated transparently and in accordance with best practice. That being the case, experts suspect something may still not be clear to the public yet.

“The concessionaire, Afriland Properties, paid only N50 million for a 50-year lease of the property belonging to the government. The State

Government as custodian of the interests of Lagosians is committed to the restructuring of the Lagos State Development and Properties Corporation, LSDPC, (the agency that handled the transaction), to ensure it begins to provide positive capital returns to the State Government for the ultimate benefit of the people,” Lagos State had said.

There is also the impression that the Nigerian economy has been hobbled by huge imports as exports continues to shrink over the years for lack of productivity.

As a result, the Federal government has coupled far reaching policies to encourage local productive activities to support the sliding revenues, caused by the sharp drop in the prices of crude oil from over $113 per barrel on June 2014 to about $40 per barrel as at yesterday.

Strong voices have bemoaned any act and behaviour that runs contrary to this pursuit, and have even perceived them as enemies of the nation.

The founder of the Oodua Peoples Congress (OPC) Dr Fredrick fasheun said that it is now very clear that there is a serious crisis going on between the two former Governors of Lagos State. He argued that what is now happening between Mr. Babatunde Raji Fashola and his former boss Ahmed Bola Tinubu which led to the revocation of the Falomo contract could be described as when two elephants are fighting, the grass would suffer.

The contract revoked is supposed to benefit the masses but because there is a fight between the two giants the people will now pay for it.

He warned that both of them should thread carefully because with the way things are going, no one is sure of what would be the end.

According to him ”if what we are now hearing and reading in the news are true and it amounts to probing the immediate past Governor of the state, then Fashola should not alone be picked because there is no way Gov. Ambode would probe Fashola that would not go down to the previous governments in Lagos and this means that whoever engineered the probe against Fashola cannot exonerate himself.

You know that Tinubu came  before Fashola and if Ambode wants to be courageous enough he should not single out Fashola but should revisit the activities of those who were before him because anything short of this amounts not to witch hunt but blackmail’’

Also in his reaction Prince Abimbola Makanjuola a chieftain of the Peoples’ Democratic Party and a public affairs commentator close to former President Olusegun Obasanjo told Hallmark that the animosity between Fashola and Tinubu is just beginning to play out despite the fact that it has been there all along.

He said the action of Ambode was an indication that all is not well within the APC and that someone is trying to deprive Fashola of getting a ministerial appointment from the federal government.

Abimbola further said that some of them were aware that this kind of thing would happen at the end of the day because of the stand of Fashola over the way Alfa Betta was collecting money from the Lagos State government, adding that ”there were reports that the state government was making between N30 to N34 billion monthly out of which about N500million goes to Alfa Betta’’

‘’Tinubu is a personal man who believes in self aggrandizement but let me warn that any move to destroy Fashola at this stage would boomerang because there is no way Ambode would probe Fashola that will not reflect on the past government in Lagos state. To us I think the scenario we are witnessing in Lagos state is good because it would now keep President Muhamadu Buhari on his toes to know the type of characters around him. It is even an indication that not only PDP is corrupt but APC as well’’