BusinessDay... the voice of business: Real threat to Tinapa as Dubai World invests $800m in Senegal

Real threat to Tinapa as Dubai World invests $800m in Senegal
================================================================================
Pius Mordi, with agency report on 21 January, 2008 01:00:00
 
“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.