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Paul Onwuanibe, CEO of the Landmark Group—the organization which owns the Landmark Beach Resort –says that when he received an ultimatum for the demolition of parts of the site late in March, he initially assumed that it was an April Fool’s Day joke come early. But it soon became apparent that the government was serious about its threat. Plans for a new, massive public project—a coastal road linking Lagos and Calabar –have been drawn up, and, according to the authorities concerned, the Landmark development stands in its right-of-way. The government wants portions of the leisure spot gone for the road’s sake. Mr. Onwuanibe insists that the cost of this removal is too steep for his organization, and maybe even for Lagos State’s tourism scene. Analysts have warned that this situation could deter similar investors from betting on the country.
A Tale of Two Projects
According to Mr. Onwuanibe, the Landmark site in question is home to 80 businesses, which collectively employ over 4,000 persons. He says that it’s valued at about $200 million and that it exists partly because of the investments of Nigerian and foreign partners. He describes it as probably “the most visited waterfront destination in West Africa”, with north of a million local and international visitors yearly. The Landmark CEO has also been keen on stressing the site’s importance as an economic entity. By his assessment, it generates over ₦2 billion in annual tax revenue and includes numerous small businesses—factors which he seems to believe should count for something in the government’s consideration. But the government has plans for a grand development of its own. Approved back in February, the coastal highway connecting Lagos to Calabar should span 700km, with several nodes jutting out into the north. When completed, one government official said, it would “enter the world record books among iconic coastal routes like the Wild Atlantic Highway in Ireland and the Pacific Coastal Highway in the United States.” To make way for the highway, the Lagos State government has decided to demolish establishments that lie in its proposed path—including portions of the Landmark site. Notices have been served to affected businesses, and construction of the first phase of the road has already begun.What the Demolition Could Mean for FDI Inflows
Mr Onwuanibe has expressed a fear that the demolition of parts of the Landmark beach resort site could make attracting foreign investment to the country (and especially to Lagos’s tourism sector) more difficult than it already is. This concern has been echoed by several supposedly well-informed commentators.Sign up for the Connect Nigeria daily newsletter
Investors are typically wary of uncertainty. They prefer to fund projects in countries with a stable economic and policy outlook, which show good signs of growth. The demolition of major projects funded by investors, especially without providing ample time to assess options, is news that will not sit well with prospective investors. If there’s evidence that this event is part of a broader pattern of a lack of respect for property rights, they will place their funds elsewhere. Persons defending the actions of the Nigerian government in this instance say that plans for the coastal highway were prepared even before the Landmark Beach Resort was built. They place the blame squarely on the developers for failing to properly consult with the government before undertaking the project. However, Mr Onwuanibe has said that the original plan for the highway did not plot a path through the Landmark site; rather, it was supposed to be located along the Water Corporation median, which is still undeveloped. The Landmark CEO has revealed that some of his investors have threatened to pull out their investments in the Landmark complex if the government follows through on its threat to demolish sections of the project. If this happens, Lagos—and indeed Nigeria –will have lost FDI running into tens of millions of dollars (by Mr Onwuanibe’s reckoning). If left unaddressed, news of this could spread across the global investor community, and poison the well of goodwill towards Nigeria—or whatever is left of it.
Hopes for a Positive Resolution
On Saturday, April 6, Paul Onwuanibe took to X (formerly Twitter) to address concerns about the fate of the Landmark Beach Resort. In his post, he explained that the management of Landmark was in talks with the Federal and State governments over the conflict between both parties’ plans. He expressed hope that the situation would be resolved without any part of the Landmark resort being destroyed.“We believe that with careful collaboration and consultation, a small number of other minor reroutes may be required to sustain the existing socioeconomic activity along the course of this Road,”Mr Onwuanibe said. The outcome of negotiations between the government and the Landmark Group could be known in the coming days or weeks. In the meantime, Mr Onwuanibe says, business will carry on as usual at the Landmark site.
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This episode could turn out in one of two ways: an instance in which an amicable settlement marries private and public interests; or a cautionary tale about how poor government handling of a dispute with business could discourage much-needed Foreign Direct Investment.
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