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Real threat to Tinapa as Dubai World invests $800m in Senegal
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Hayford Alile (l), chairman, Oceanic Bank plc with Cecilia Ibru, managing director, at the bank’s yearly general meeting held in Abuja on monday.
Prospects of Tinapa Business Resort Centre emerging as the sole shopping paradise in the sub-region has been blighted as Dubai World Group’s Jafza subsidiary Monday signed an $800-million (N96-billion) deal to build and run a special economic zone in Senegal, its chairman said.
“We are going to invest $800-million ... construction will start this year and hopefully we will finish the first phase by 2010,” Dubai World chairman, Sultan Ahmed Bin Sulayem, said at the signing ceremony in Dakar.
The coming on stream of the resort in Dakar will pose a major challenge to the fledgling Tinapa which is priding itself as a handy alternative to the famous shopping destination in Dubai. Incidentally, the promoters of the Dakar project are the same managers of the Dubai resort.
Tinapa was commissioned on April 2, 2007 after about $340-million (N40.8-billion) had been spent since construction began in 2005. Up to 80,000 square meters of pristine retail space have been completed but most of them lie empty while the project is still beset by challenges bordering on inclement government policies and tax regimes.
One of the high points of the attractions to investors was the tax-free regime for products at the resort which is supposed to have the attributes of a free trade zone. However, the Nigeria Customs Service has failed to effect a blanket tax free regime due to the absence of an enabling law.
The tax issue is one of the cases of government’s policy inconsistencies that have tended to frustrate the project. Government’s import prohibition list has always been subjected to frequent reviews, making medium and long term business plans by investors at the resort difficult.
Although the project was earlier scheduled for completion in 2006, inadequate funding has continued to confront the project’s promoters and is a compelling factor for the phased construction of the resort.
A new and, perhaps, more debilitating challenge before Tinapa is the resurgence of militant activities by the numerous armed gangs in the Niger Delta who have vowed to cripple business life in the area as part of their campaign for a greater share of the oil revenue for oil producing states. Their campaign which is characterised by hostage taking and sabotage of oil installations has brought economic life in the area to a halt.
Donald Duke, former governor of Cross River State and the brain behind the resort had projected that three years after completion, Tinapa would be drawing three million visitors a year and generating N300-billion ($2.5-billion) yearly with an enormous multiplier effect on the economy of Cross River and Nigeria as a whole.
Another affiliate of the Dubai World Group, ports operator DP World, in October signed a 25-year concession to develop and operate Senegal’s main container port and invest more than $600-million in future port expansion.
This involves plans to build a new shipping terminal near the Senegalese capital.
Arab companies have recently stepped up an investment drive in predominantly Muslim Senegal and other West African states.
The coming on stream of the resort in Dakar will pose a major challenge to the fledgling Tinapa which is priding itself as a handy alternative to the famous shopping destination in Dubai. Incidentally, the promoters of the Dakar project are the same managers of the Dubai resort.
Tinapa was commissioned on April 2, 2007 after about $340-million (N40.8-billion) had been spent since construction began in 2005. Up to 80,000 square meters of pristine retail space have been completed but most of them lie empty while the project is still beset by challenges bordering on inclement government policies and tax regimes.
One of the high points of the attractions to investors was the tax-free regime for products at the resort which is supposed to have the attributes of a free trade zone. However, the Nigeria Customs Service has failed to effect a blanket tax free regime due to the absence of an enabling law.
The tax issue is one of the cases of government’s policy inconsistencies that have tended to frustrate the project. Government’s import prohibition list has always been subjected to frequent reviews, making medium and long term business plans by investors at the resort difficult.
Although the project was earlier scheduled for completion in 2006, inadequate funding has continued to confront the project’s promoters and is a compelling factor for the phased construction of the resort.
A new and, perhaps, more debilitating challenge before Tinapa is the resurgence of militant activities by the numerous armed gangs in the Niger Delta who have vowed to cripple business life in the area as part of their campaign for a greater share of the oil revenue for oil producing states. Their campaign which is characterised by hostage taking and sabotage of oil installations has brought economic life in the area to a halt.
Donald Duke, former governor of Cross River State and the brain behind the resort had projected that three years after completion, Tinapa would be drawing three million visitors a year and generating N300-billion ($2.5-billion) yearly with an enormous multiplier effect on the economy of Cross River and Nigeria as a whole.
Another affiliate of the Dubai World Group, ports operator DP World, in October signed a 25-year concession to develop and operate Senegal’s main container port and invest more than $600-million in future port expansion.
This involves plans to build a new shipping terminal near the Senegalese capital.
Arab companies have recently stepped up an investment drive in predominantly Muslim Senegal and other West African states.
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Comments (6 posted):
You might have a legitimate concern, but don't be too quick to jump the gun. Nobody goes into business expecting to fail or loose money. A $340-million project from a tangible economic prospective must have gone through various probes and hurdles, in order to be certain that the project survives and also profitable. Like any business student or business analyst will tell you,there are definitely bound to be some issue beyond your control, that will crop up. And that will bring some unique challenges to the management.
Challenges like the one stated above, puts managements back on the drawing board, to come up with other alternative to jump start the business.
Just to give you an idea, the American economy is not performing as expected. Now, see what the president is proposing. They are proposing a cash rebate incentives to tax payers. This is to give you an example of what Duke and is people can do to jump start the project. Maybe the government and state policies are not well aligned and are conflicting one another.
So "NEVER" SAY "NEVER. Because you can learn a lot from your failure.
However, Tinapa can take advantage of the gap between now and 2010 to raise their game so that they can become a worthy rival. It should be seen as a challenge and not a stumbling block as most of the other comments may suggest
Looking at it from the average man's point of view, if tinapa is a good project and holds promise (which I believe is absolutely true), then there is nothing stopping our dear friends from Dubai from doing same in neighbouring Senegal. We don't have to start crying or cursing because this has happened 'or is happening', I agree with Jaiye and I want us to know that if Nigeria intends to be in the top 20 economies by 2020, it should be ready to face this and have the positive and strong mental attitude that we can beat it. Another trade resort in Senegal is very good and welcome, what is expected is let Tinapa beat it then we can say we are on course on our 2020 agenda. Tinapa can't be solitary in this region and say it is the leading business resort in this region. Let Senegal be set up them we can pride in being leading. Our forms of economic technocracy is expected to come to the fore now.
Friends believe me, we can beat it.
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