How the Law Protects Investors

_Ima-Okpongete-,General-Counsel-&Secretary-Legal-FCT-(5)

Ima-Okpongete-,General-Counsel-&Secretary-Legal-FCT-

A robust legal support has increased the investors’ confidence in the land swap projects

The high level of confidence investors have in the successful implementation of the land swap policy predicates on a robust and competent legal framework that guarantees the interests and expectations of all stakeholders – government, investors and subscribers. Under Section 5 of the Land Use Act, the Honourable Minister of the Federal Capital Territory, FCT, is empowered to allocate land in the Territory. Under Section 8, the Minister also has power to make any grant of land for special contract and also to revoke same in the event of a breach. Faruk Sani, the coordinator of Abuja Infrastructure Investment Commission underscores the importance of the legal framework: “If you are dealing with investors, the first thing that they will ask you is, what are your legal deals for going into this scheme? Even if the investor is so enthusiastic that he forgot to ask you, I can assure you that his financiers will ask you. So in coming up with this project, we also look out for legal basis for it.” Similarly, Abimbola Salu, special assistant to the FCT Minister on legal and multilaterals, reaffirmed the legal imperative: “We had to let the minister know first of all the legal framework because if it does not stand on proper legal framework investors would be scared to bring in their money.”

The legal framework states clearly the expectations of the Federal Capital Territory Administration, FCTA, the scope of infrastructure works expected of the investor and the basic criteria for eligibility.

According to the legal document, the FCTA grants a maximum space of 60 per cent in a greenfield district to a developer for real property development under special contract as envisaged by the Land Use Act. On his part, the developer would provide primary infrastructure without any financial, technical or demand risk on the part of FCTA.

What the developer must provide are clearly stated. These are:

  1. The detailed district design and the bill of engineering;
  2. Agreed kilometres of roads of varying specified sizes within the districts;
  3. Agreed kilometres of storm water drains;
  4. Agreed kilometres of water drains;
  5. Agreed kilometres of water distribution lines;
  6. Agreed kilometres of street lightings;
  7. Agreed kilometres of electric power distribution lines;
  8. Agreed kilometres of telecommunication ducts; and
  9. Agreed number of mini-sewage treatment plants.
Bimbola-Salu-Hundeyin-3

Bimbola-Salu-Hundeyin

In addition, the developer must provide the business plan showing its technical capacity, financial capability and managerial competence. The draft of the final agreement is ready and all the investors are studying it. Salu gives an insight into the details of the document: “The agreement takes care of each party’s liabilities, responsibilities and duties. It also takes care of the community because you know the land belongs to certain people and we know that they must be paid compensation. So it takes care of their compensation. It takes care of their resettlement; it takes care of even proper structures. We are not leaving that out.

We also have provisions to ensure that what they are building is what it should be. We do not want any investor after taking our land after taking out the communities to just do anything. So the agreement will just take care of proper structure it must be in accordance with proper building regulations. It takes care of everything that could from a human perspective become a problem or a hindrance to the success of the land swap.”

Ema Ekpo Ette, general counsel and secretary legal, FCTA, sums up the legal assurance. “For land swap, we have put indices in place to ensure that the investor is preserved, even from himself. Number one, we have introduced due diligence into any investor coming to us. We look at company details to make sure we’re not dealing with false personalities. To still protect the investor, there are conditions of that contract that can protect the investor. We have an agreement with an investor but it is not predicated on the government; government can change. But it does not mean that if government changes the investment should stop. If any investor looks at that he will not invest anywhere. So we are guided by agreements and MOU. The laws of the land are there to protect any investor.

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