Tinapa Resort: When A Dream Becomes A Mirage

By Joseph Osuji:

Tourism in some countries like the Queensland is the second largest export earner, generating $14 billion a year in revenue for the state and directly employing over 150,000 people.

Tourism provides the host state with an opportunity to display their region’s distinct and unique cultural and natural assets, while creating employment and diversifying the regional economy.

Apparently with this mindset of enhancing the socio economic development of the state, the then Governor of Cross River State, Governor Donald Duke, set out to work on various projects that will serve to boost its tourism potentials, showcasing the rich cultural values and at the same attracting revenue to the state. One of the outcomes of that initiative was the biggest primer resort in Africa, the Tinapa Business and Leisure Resort, which many Nigerians call the ‘Dubai of Africa’, due to its positioning as a tourism destination for those who love the good life and can afford it.

Located north of Calabar, a town in Cross River, a state which shares boundaries with Benue State to the north, Enugu and Abia States to the west, Cameroon Republic to the east and Akwa-Ibom State, alongside the Atlantic Ocean, to the south, the Tinapa Business and Leisure Resort is associated with the Calabar Free Trade Zone.

In capacity, the Tinapa Business and Leisure Resort has facilities for retail and wholesale activities, as well as leisure and entertainment. The resort has about 80,000 square metres (860,000 sq ft) of lettable space for retail and wholesale, made up of four emporiums of 10,000 square metres (110,000 sq ft) each and smaller shops, warehouses and so on. The entertainment strip contains a casino, digital cinema, children’s arcade, restaurants, a mini amphitheater, night club and pubs. Business facilities include an open exhibition area for trade exhibitions and other events, as well as a movie production studio.

In the very first phase of its execution alone, over $350 million was expended, with the resort commissioned on the 2nd of April 2007 by the Nigeria’s former president, Olusegun Obasanjo. However, in the last five years, the resort, as a business enterprise, has been saddled with several challenges, ranging from the debt profile to issues of patronage, which seem to be hampering the attainment of its noble objectives. On the other hand, it is seems that the state government, over the years, has explored several avenues of salvaging the situation to no avail.

Tinapa Resort: When A Dream Becomes A Mirage

With such a huge investment, one would think that, by now, there would be a heavy traffic of leisure seekers and business people alike trooping into Cross River, as is the case in some other parts of the world where similar ventures have been put on the ground. Rather, many Nigerians still prefer to visit resorts that offer similar or less value outside the shores of the country. What could have lead to such trend, and where did the state government get it wrong?

In the first instance, the free trade zone was not just for the interest of Cross River State alone, but also for the federal government, as most of the companies operating in it, being limited liability companies, and governed by national laws, pay taxes, not only to the state government, but also to the federal government, in form of customs duties etc.

With the federal government taking a share of dividends from the resort, one would have expected it to ensure that policies that will enhance a more robust patronage are in place to make it more conducive for more investors to carry out their businesses at Tinapa. Rather than do that, the Nigerian Customs, which is under the direct control of the federal government, rather chose to frustrate the businesses of investors by seizing and closing the offices of the first set of investors who sought to do business in the resort, thereby hampering its growth.

The management of Tinapa and top officials of the Nigerian Customs at Onne Port, through which consignments are imported into Tinapa even made matters worse, as there was constant seizure of the goods and unnecessary delay in the clearing of containers and cargoes meant for onward passage to Calabar, their final destination, thereby making investors pay demurrage on daily basis on the seized containers. At least, it was due to moves similar to this that many investors were scared away, thereby lowering the monthly revenue turnover of the resort.

It is mind boggling that within a space of five to six years, the government has incurred such a huge debt of over N18 billion on the project.

With about N6.4 million spent weekly to purchase 40,000 litres of diesel needed to power the resort, and the government paying at least N800 million monthly to service loans taken from banks, the noble resort has become more of a burden to the state government, draining the state of resources that could be put to good use within the state.

For a project of that magnitude, it doesn’t take any brilliance for any casual observer to wonder why the government did not connect it to the country’s national grid to help reduce the cost of running it and increase the revenue base of the state and the federal government. With 40,000 litres of diesel used in running the resort weekly, amounting to N6.4 million per week, an N800 million loan servicing regime, and the N300 million spent annually on other servicing and maintenance costs, it would take super government to harness the dividends such a project should have offered to government.

With the resort operations not properly in place and with huge sums having been spent on the project, government had no option than to ensure that more funds were invested in it, just so as to keep the project running at a minimal level, thereby leading to the huge debt regime that was incurred by the state government. Finding itself in such a precarious situation, the state government was left with no other option of salvaging the resort, other than to privatize it.

It is pertinent that the government and other investors, who might want to venture into future projects like the Tinapa project, take a cue from the issues that the resort has had to contend with, and subject it to a well scrutinized plan, so as to avoid venturing into a project that might turn out to be a drain pipe.