TINAPA: Dukes Vision, Investors’ Haven

Aug 02, 2007 07:08:26

The vision of Donald Duke, Governor of Cross River State to build TINAPA, a world class integrated business resort in the mould of Hong Kong and Dubai free zones, may have suddenly opened a new vistas in the nation’s industrial landscape. Specifically, it has evolved a new determination to redirect business from most industrial clusters around the world to Nigeria.At the investment forum in Lagos last week, Duke, his trade and investment commissioner, Sam Anani and the various consultants to the project made presentations which centred on the cost/benefit analysis and strategies for achieving the set objectives. The multi purpose business resort will provide international standard wholesale emporium, integrated shopping complexes and produce distribution supported by business tourism and entertainment facilities. Located in close proximity to Calabar Export Processing Zone, TINAPA is designed as a distribution point into Nigeria, and an economic hub of West Africa. According to promoters of the project, “the vision builds on the principle that the creation of a trade hub will attract investors, traders and business travelers and subsequently domestic, regional and international leisure tourists.” To achieve the set objectives of TINAPA whose cost outlay is put at $124,663 million (N17.45 billion) with sales revenue of N80 billion in five years, the Cross River state government has received the support of the Federal Government. According to Duke, the project would be officially launched by president Obasanjo at Aso Rock next month. Government support is also demonstrated by the incentives allowed investors in TINAPA.These include exemption from all federal, state and local government taxes, levies and rates; entitlement to approved enterprise to imports, free from customs duty on capital goods, consumer good and raw materials. They would also enjoy freedom from legislative provisions with regards to taxes, levies, duties and foreign exchange regulations and unrestricted repatriation of investors’ profits.To further protect investors against government interference, investors have been given the drivers seat as over 80 per cent of TINAPA is private sector owned. Accordingly, the state government would own between 10 to 15 per cent interest.Following the project evaluation and return projections, investors at the forum appeared convinced that the project which is planned to return about 25 per cent to investors is viable. To realize the huge capital outlay, the capital structure has been diversified with 30 per cent from equity holders; 30 per cent from; 20 short term debt instrument and 20 per cent from long term debts.Expected to attract 1.6 million visitors annually, yield income to investors from 2007 and employ 1,820 people, TINAPA indeed appears set to emerge as a continental business hub. she spoke glowingly in favour of the project and recommended it to investors. For Nick Okoye, Ndi’s Technical Adviser and Head of Derivatives Market, the facilities in TINAPA would save businessmen the foreign currencies spent in going to Hong Kong and Dubai for business harvest.By the capital structure of TINAPA, it is would appear that the project may be floated on the stock exchange to enjoy the transparency associated with quoted companies. One investor said the idea of allowing the private sector take majority interest in TINAPA would hedge against the fear of Governor Duke’s tenureship. In other words, the project is designed to sail even if the governor takes his exist in 2007 However, as one banker said at the Forum, a giangantic and viable project like TINAPA would need the support of the private sector and international investors. Particularly with the huge foreign exchange exposure of the project.There should also be an assurance of poliy consistency and functional infrastructure.