From Aidoghie Paulinus, Abuja
The managing director and chief executive officer, The Diplomatic Village, Abuja, a diplomatic duty-free facility, Mr. Uche Odozor, has explained the rationale behind the establishment of the first diplomatic duty-free zone in Abuja.
In this interview with Daily Sun, Odozor, an aviation expert, said the management of the village succeeded in providing the shopping needs of diplomats serving in the country in a very secure and convenient place.
He explained that the management assisted the federal government in solving a problem by reciprocating the gesture enjoyed by Nigerian diplomats abroad.
The Imo State-born entrepreneur further said, by establishing the diplomatic village in Abuja, government has succeeded in domesticating the Vienna Convention Act of 1961.
What necessitated the establishment of the Diplomatic Duty-free Village in Abuja, which is the first in Nigeria?
Yes, it is the first and the only one in Nigeria, and not also restricted to Abuja. But, with time, government could also see the need for us to further accommodate the diplomats that you find in Lagos, who are usually like either on transit into the country or out of the country. So, ours is just to make sure that we provide their shopping needs in a very secured and convenient place.
I will go to your initial question, what prompted me. I am an entrepreneur and I have worked in the aviation sector, so I understand the familiarities around duty-free transport, air cargo and all of that. But diplomatic village came as something that struck me many years in 2010 and I started doing my findings. I realised that the shopping convenience for diplomats in Nigeria is not structured; hence it created a huge gap. And as somebody who was living overseas as a diasporan, doing anything in Nigeria, there is just too much negativity about our country. But I decided to venture into it and that was 13 years ago and, today, it has proven that despite where you live as a Nigerian, as a diasporan, if you are a businessman, there is a saying that ‘charity begins at home.’ There is need for us to put aside the negative things around us. It has taken a rigorous process from 2010. At that time, the Ministry of Foreign Affairs was in another side of town.
What were the bottlenecks you encountered while trying to establish the Diplomatic Duty-free Village?
The bottlenecks were simply realistic bottlenecks, if I may say. Realistic in the sense that being the first time this is happening, you needed to educate more, especially the civil servants. There is need to actually educate them and create some level of comfort around the fact that look, you mean well for Nigerians, you mean well for the diplomatic community and you are genuine when it comes to all your intentions. And if you say bottlenecks, documentation in this kind of project is everything. It took 23 technical presentations between 2011 till 2021. And in all those technical discussions, at a point, the Minister of Finance created a committee on the establishment of the Diplomatic Village Duty Free for Diplomats. And that committee was at the directorate level – Ministry of Finance, Director, Technical Services; Budget and National Planning, there was also a Deputy Director from there; the Ministry of Foreign Affairs, by the Chief of Protocol and we also had from the Nigeria Customs, the Comptroller in Charge of Licensing and Permit; Comptroller also in Charge of FCT Command, from the State Security Department, who also did all the security checks around the persons or the personalities involved and of course, the Nigeria Police and the Central Bank of Nigeria. So, it bothers on tax, discounts and how do they mitigate against these losses that government is incurring through arbitrary importation of goods for diplomats. Before now, of course, diplomats were entitled to bring in these goods personally, but you needed to create a data base, a proper documentation as to ascertain the value of discounts in taxes and duties that you give to diplomats. So, it wasn’t structured. What most countries of the world have done is to formalise a unique shopping facility, exclusively for diplomats. In that case, you know what you are discounting, how much duties that they have in a year, in years and you will be able to say these things, you check their bills that they are not ending up on the streets. Nigerian diplomats overseas also enjoy these benefits. Remember that this forms part of the trade privileges and protocols reached at the Vienna Convention in 1961.
Diplomatic Duty-free Village, according to the Minister of Finance, is meant for diplomats and members of their household. Are there steps put in place to ensure that non-diplomats don’t shop here?
Unfortunately, you can see the rigours you encountered coming into my office, which happens to be within the wing. We have very big premises and in the right wing, you can see it is clearly stated there: ‘Diplomats Only.’ And diplomats are entitled to be processed, using a unique card, which we issued on their first arrival. On their first arrival, they identify themselves, they present their legitimation cards and we issue them the duty-free diplomatic cards. With that card, they can conduct their shopping and they do not have to be stopped at the entrance. You can see the number of enforcement officers and our security personnel.
So, they cannot transfer the card to their friends?
No. They cannot transfer the card to any of their friends because we have a unique identification. So, if anybody other than the holder presents that card on a particular visit, we have a way of finding out if that is the real owner of that card.
How about the members of their household?
Regarding the members of their household, minors are not allowed to shop here, if you are below 16 years of age. They must be accompanied by the principal account holder. That is how it works. And some of them may request for additional cards for their wives, especially the very frequently travelling ones. But the cards are linked. So, every shopping that is done on that particular card, the report is going straight into your email. If there is any purchase, of course, you will receive it. It is automated and you will see even purchases that have been made against your name. It is your unique card. Even if you need that report any day, we are able to give you that report. And it helps us to keep our systems very sterile in the sense that it is easy to keep the data base to know the quantum of goods discounted, what has come in, what you have, what you don’t have, how many diplomats accessed the place and the level of discounts that the government has also given. Remember that all our goods arrive the country without any form of duties, taxes or even VAT. We don’t pay or remit VAT to the Federal Inland Revenue Service (FIRS) because we don’t collect VAT from diplomats. They are entitled to that based on the Vienna Convention Act.
Nigeria does not give rebate for VAT payment. So, how will you operate?
This is not within the sole jurisdiction of the Nigerian law. Nigeria is signatory to the Vienna Convention Act of 1961 and in turn domesticated it in 1962. So, within these trade privileges and protocols, diplomats are exempted from VAT payments. If we collect VAT from these diplomats, even Nigeria will still have to return it to them. That is why it is not just only VAT, duties are not to be applicable to all the goods they purchase for personal use.
Businesses are set up for one to make profit. For the uninformed, how do you hope to make profit from this kind of business environment?
That is a very good question. But you find out that, as an entrepreneur, your hunger, your drive is not often because you want to make money. And at that, you also want to establish how successful a business is through the return on investment, especially when people have invested in such business. But if you look at where we are, we have other businesses that survive this particular business. We have a spa, a state-of-the-art diplomatic village spa, it is not duty-free. It is services. So, you can go there, relax with your family, finish whatever thing and you pay. The only thing we don’t charge is that, if you are a diplomat, you don’t pay VAT as well. We have a clinic, a state-of-the-art clinic here, also being run by one of us from the diaspora as well. That is why I go back to say that, look, it is not all bad when it comes to receiving diasporans, bringing their ideas and operating in Nigeria. But we have to be patient. Our system lacks a lot of things, but like I said, 13 years through this process. It didn’t start yesterday; over 23 technical presentations. So, you have to be patient with the government agencies; documentations have to be done right. But you find out that you get into trouble when you think you have money and you want to pay your way through. It never happened through these processes because we never came across a civil servant who insisted that, Oh, no, your file is here, money must change hands. Truly speaking, I am very proud of this country.
Why didn’t you chicken out during the rigorous process? What was the drive, the idea behind all these?
Entrepreneurs don’t chicken out. You must see to the end of every dream. You must see to the end of every ambition. And being a serial entrepreneur, how do you justify tomorrow, even an hour that you have invested in this? So, if it has taken three thousand hours, you’ve got to justify it. That is the way we think as entrepreneurs.
Are you getting any form of assistance from the government?
Yes, through policy availability. These policies are there and the government has been able to establish the fact that this is not in conflict with any trade protocol. In fact, we are solving a problem for them because they have been thinking all these years how they were going to reciprocate this. They have been under pressure from the diplomatic corps to say, look, you need to give us this or we will stop Nigerian diplomats overseas from enjoying this same thing.
So, what you have done is by giving the government a face-saving measure?
Yes, we have solved the problem. As entrepreneurs, yours is just to solve problems.
How have your years in the aviation sector assisted you in establishing the Diplomatic Duty-free Village?
My years in the aviation sector were quite remarkable. But, personally, my venture started as an economist. I graduated in Nigeria, from the University of Ilorin; I am from Imo State, Amucha, Njaba, to be precise. I went to Saint Augustine Grammar School, Nkwerre, in Imo State, and then University of Ilorin where I obtained a BSc in Education Economics, after which I worked briefly for like a year before I went to South Africa. In South Africa, I worked with Old Mutual Group, one of the biggest life assurance companies on the continent, after which I also worked with Standard Bank Group, owners of Stanbic IBTC Nigeria. I worked with those groups as a financial consultant, after which I worked with Nedbank, another bank in South Africa. After all the years, as a young man, I ventured into aviation, where I picked interest. Rather than continue to go into pilot training and stuff like that, I took over an aviation academy in South Africa, where I trained a lot of people. So, I have a lot of students all over the sky. The other day, I got a call, about five of my students were busy in the same airspace here in Nigeria. And they were calling me to say, Sir, we were actually on air last night. Five of my students! So, that tells you how many students I have who are successful pilots today, cutting across Air Peace, Dana, Arik; they are all over. But most importantly, we created a niche market, which is agriculture-aviation. That is the area that I majored and we are the sole representative of Air Tractor on the continent, sub-Saharan and even up to Eastern Europe. Air Tractors are agriculture aeroplanes manufactured only in the United States of America and they are used for fumigation, pest control, rice seedling, and others. We hold that exclusive franchise through Ag Aviation Africa, which is the parent company sitting in Cape Town. So, all those aeroplanes are used for food production. We saw the need to establish in Nigeria and help the ministries to grow food.
So, you are in Nigeria now?
Yes, we are in Nigeria. You could find the aeroplane operating in Olam Farm, the very successful farms, Olam Farm at Rukubi, Nasarawa; you will find the aeroplane operating there. That is why they are largely the best and the largest rice production farm. It is simply because of what the aeroplane does.
What is your relationship with the Ministry of Foreign Affairs in carrying out a project like this?
The whole thing started with the Ministry of Foreign Affairs. Actually, I remain very grateful to one man I will mention his name, Ambassador Martins Uhomoibhi. At that time, the Ministry of Foreign Affairs was still in Wuse Zone 3. I came from overseas, went straight to his office and I was kept waiting because I had no appointment. So, after many hours, he came out and questioned why I was not allowed to see him. He was really very upset and almost fired the secretary. That encounter really changed me and changed my impression about Nigeria. Remember that I was coming from the diaspora and there was this negative impression and I got one. So, I decided to sit in. Later on, he allowed me in and I introduced myself and told him that this is the vision that I share. And in his words, he said look, there is a gap, be patient with us, put it on paper and let us start the process. So, the process started in 2011. In 2012, the name ‘Diplomatic Village’ was registered and then, the process began at the Ministry of Foreign Affairs with series and series of everything aligning it with the policy. By the time we finished at the Ministry of Foreign Affairs, the minister communicated their readiness and their acceptance to the Ministry of Finance with all the files and said look, this is something, a concept that has a gap and that they were happy that this young man has educated them and helping them to solve a problem, please look into it and grant the necessary waiver where all your conditions are as well met. So, it went to the Ministry of Finance and the process also began. That was during the time of Okonjo-Iweala. We did many presentations during that time, from Okonjo-Iweala to Kemi Adeosun; from Kemi Adeosun, the process was completed by the current Minister of Finance, Hajia Zainab Ahmed. She stumbled on the file and was really elated and liked the concept and the process continued. Finally, in 2019, the approval also came. That was the second layer of approval after all other ones in between. And the final approval also to commence the project proper came out in 2022.
How about funding? How were you able to raise funds to put the village together?
One thing with entrepreneurs is that we don’t give up. It has been very, very difficult actually because nobody believed in this very vague, huge idea of a village where diplomats shop. Too many questions! Why duty-free in a city? Why diplomats?
Can you put figures to it? Can you say you invested N5 billion or N10 billion to put it together?
No, no, no. If I have N5 billion, I promise you, you probably would have been seeing a four-storey or 10-storey building. We are far from that. This mansion you see today was really in a derelict condition, but we had the opportunity of reaching the owner who was like, let me even see your concept. This was during COVID-19, early 2020. We shared the concept and he fell in love with it. And one thing that he said that thrilled him was that these were young men. Myself, my partner, Hadiza, a very young lady, I feel very old around her because I am 47/48. She is still in her 30s. So, I feel like a grandfather around her. But we were given the opportunity and we entered into a long lease agreement and did all the major renovation, including the access road. Of course, in between these lines, we had a partner and investor that came in full-time, who became convinced of what we are doing, Sir Chineme Iheaku. It was really difficult for somebody to be convinced, but he gave us that opportunity and will say the lifeline. That was before Uncle Tony came in and said this is what I could also do for you people to secure the premises. But our major investment has been through the God-sent investor and businessman, Sir Chineme Iheaku.
Some are also wondering, how can you operate duty-free zone outside the airport?
It is the law of jurisdiction. This has nothing to do with the airport. It has to do with diplomats and you must operate within the diplomatic zone where they are resident. That is why we are within the Central Area and then, making it green area for them to do their shopping. Since you have been sitting here, you have seen how many of them walked in here because it has to be in a secured place within their environment and they want to be able to do their shopping free from security breaches and stuff like that.
How are you ensuring the security of the village?
The village is very secure. As I said earlier, we partnered with very major security companies and a few of them, outside of the country, to provide consultation. But of course, the Department of State Security also gave guidance as to what should be done and what shouldn’t be done. So, the security here is watertight. They factored in that a lot of diplomats will visit this premises. Of course, it will inconvenience people like you experienced while coming in, but for diplomats, it is an easy access for them to come in. Again, the security here is very watertight, so we do not fear anything about breaches.
