World Report

Donald Duke
Governor of Cross River State

‘The state is naturally endowed with tourism sites’

Brief History

Cross River State has retained its present identity since the creation of Akwa Ibom State in 1987. The state is richly endowed with both natural and human resources. In terms of human resources, it has an estimated population of about 2.5m made of over 25 ethnically diverse peoples. Yet, even with its diversity, the peoples of the state have under my administration come together and have succeeded in transforming their seeming diversity to forge a strong unifying weapon for the development we have so far seen impacting in the state today. There are 18 local government councils and three senatorial zones just as there are three distinct languages - Efik, Ejagham and Bekwara. The Southern zone is dominated by the Efiks, the Ejaghams are in the Central zone, while the people of Bekwara are in the Northern axis. The state is bounded by Akwa - Ibom, Cameroun, Benue and Ebonyi states respectively. Although there is secularity in religion, the people are predominantly Christains and a few percentage of practicing Muslims among them. In terms of economic production, the state is largely endowed with arable land, a rain forest and a climatic condition that guarantee agricultural success. This advantage accounts for why a huge percentage of the population is into subsistent farming.

Cross River 1987 - 2005

There is undoubtedly a remarkable difference that can be attested to by the people between 1987 when the state was created and within the last six years plus, beginning from 1999 when I assumed leadership of the state. These impacts are more manifest in the areas of the provision of super infrastructure and the redirection of our energies to areas where we had comparative advantages. In the past, successive administrations had dissipated meager resources on the payment of salaries and allowances to an unproductive workforce that constituted less than 30 per cent of the entire population. Under the circumstance, little or no attention was paid to capital expenditure and thus the much desired development remained an illusion. It was therefore with these lessons of hindsight in mind that when we came in 1999, we opted to chart a deliberately different economic course choosing to create a conducive environment for businesses to strive and in the long run stimulate internal production. Today, we have invested heavily in infrastructure, education, health sector, environment and human development so that our cardinal thrust of driving tourism and agriculture would find lasting meaning on the polity, and it has.

Main Achievements and Challenges

When we started out in 1999, we were under no illusion that it would be an easy task; on the contrary, we were quite aware of the enormous task confronting us. To really come to grasp with the economic realities on ground, a pre-1999 study was conducted to ascertain the actual economic strength and weakness in our state, the opportunities and disadvantages and the way forward. That academic endeavor eventually gave birth to the economic blueprint in use today. It was this study that provided that vital indices that have remained crucial to our accurate economic forecasts and achievements to date. For instance, the state is naturally endowed with tourism sites that if tapped, could readily transform it to a destination in the very near future. Additionally, it was also discovered that with the abundant rainfall, rain forest and arablland, agriculture could hold a vital key to economic prosperity. It was based on this realization that tourism and agriculture became the main thrust and cardinal focus for this administration. However, another hurdle of how to muster the much needed capital to tackle a capital intensive sector like tourism reared its head. Although, the state is oil producing in status, revenue receipts are not commensurate with this status. The administration decided to prioritise such areas as roads, electricity, potable water, education, health and environment. As a sampler, in the area of roads, government has through its Urban renewal Scheme spent over N10b on road construction and rehabilitation. This initiative has seen the linking of all council headquarters with access road network across the state. In Calabar, the state capital, virtually all the feeder and access road networks have been macadamized. In the same vein, government has, in realizing the vital role electricity plays in economic growth, linked all the council headquarters to the national grid, while also ensuring that about 80 per cent of the entire communities in the state have been energized.

If not for anything else, this administration would take credit for evolving a vibrant economic model that has shifted from a civil service oriented economy to a market driven public/private sector participation one. This would seek to divert attention and pressure from the civil service to the private sector for jobs, earnings and skills acquisition.

Achievements and Key to Success

This administration has succeeded largely because it has judiciously applied its resources to creating an environment conducive for the further creation of wealth. It is to its credit that Tinapa Business Resort and Leisure is born, it has also committed almost N10b to upgrade facilities at the Obudu Cattle Ranch Resort. These two projects have a combined capacity of generating over 5000 job opportunities and an average annual income of N30b annually. We have slated this year for the completion of the Tinapa Business Resort, while the necessary framework for the completion and privatization of the Ranch Resort in June is already in place. It is the thinking of government that five years after the two eventually come on stream in 2006, an alternative source to revenue other than from the federation account as is now the case would have been sought.

Economic Incentives

Government is aware of the deep seated apprehension and doubts that international investors harbor about investing in the country. This is informed by apprehension over political instability which has arisen as a result of several years of military interregnum. To make our state a destination and attractive for investment, we succeeded in persuading the Federal Government to declare the zone a free trade zone. This is a huge incentive for export oriented industry; added to this is the allocation of land and tax holidays for prospective investors. While other areas in the zone may be regarded as unsafe for travelers, the state is known for its safe, secured and serene environment with a equally friendly and hospitable people.

Poverty Eradication and Wealth Creation

The cardinal driver of our tourism initiative is basically to create both wealth and employment opportunities. A platform to achieve this has been put in place since the inception of this administration. For instance since 2000, this administration has evolved a yearly Xmas festival which seeks to create a convivial holiday environment for tourists and the people. Last year, we added the Trinidad and Tobago styled Carnival which attracted tourists worldwide. The gains of the Xmas Festival and Carnival are enormous. Statistics gathered after the carnival indicated that accommodation sold out in Calabar, Ranch Resort and environs. It also opened a vista of investment opportunities in food and beverages, accommodation and arts and crafts. It is our expectations that our people would seize these opportunities and build more hotels, open new eateries, arts and crafts shops, taxi services and of course fast foods and bread and breakfast (B&B) outlets. At the last festival, every discernible eye with an eye for investment would have seen the large opportunities that presented themselves and begging to be tapped. These are the areas that we hope to create wealth and employment opportunities for our people.

Tinapa Business and Leisure Resort

Tinapa is a mixed - used retail and resort development on a peninsula within Calabar, the capital of Cross River State, Nigeria. A project of the scale and nature proposed will be revolutionary in the Nigerian context providing direction and setting the tone for future development of this kind. The project is located in the Tinapa Free zone, which is near the Calabar Free Trade Zone, allowing the development to capitalize in the manufacturing, wholesale, retail and import opportunities presented by the free trade zone area. A phased approach to the development has been adopted, focusing at the initial stages on the aspects of the project which will stimulate trade and commerce (including light manufacturing). Thereafter, the subsequent phases will focus on the business tourism aspects of the project. This will ultimately create a base upon which both domestic and international tourism can emerge.

The first phase of the project is proposed to contain the following components: A business and resort complex comprising four whole scale emporia of 10,000 square metres each (about 2/6 of football field), 100 retail outlets, a food court for five fast food outlets, a game arcade, an internet and news café, a children's play area, an administrative centre and packing for cars and coaches. It would also have a warehouse cluster of four warehouses with a combined rentable area of 15,600 sq metres. Others are, an entertainment strip "leading out of the shopping complex which will include cinemas, a casino, five restaurants and a fisherman's village (comprising three theme bars, a themed night club and an arts and craft village with 20 stalls). In the area of accommodation facilities, provision has been made to include a 2-star 300-roomed hotel. There would also be landscaped gardens and an outdoor leisure and entertainment complex and support services and amenities which will include management offices and medical facilities. The construction of phase one started 2004 and is expected to be commission by November 2006.

The Cross River State Government is at present facilitating the provision of the necessary infrastructure - roads, sewage, water and power - at the cost of N9.1billion (US 68 million) and intends to recover same from the Tinapa Business
Resort Limited (TBRL).

Work Level at Tinapa

Right now, civil work is speedily progressing and at various stages of completion in the first phase and we have no doubt that Julius Berger will deliver at the stipulated date because already 53 % of contract sum has been paid to them.

Business Model and Financial Structure

The Tinapa project is designed to be an integrated commercial and leisure resort development in Calabar. The development of the resort is to be undertaken in phases, so as to create a critical mass at an early stage, whilst other components will be rolled out as the project develops. Demand for the resort will initially be built upon business tourism through the provision of a strong trade component. Consequently, the design of phase one of the project is based on the principle that the creation of trade hub inclusive of wholesale, retail, product distribution and light manufacturing elements, supported by business tourism and entertainment facilities, will attract investors, traders and business travelers and subsequently domestic, regional and international leisure tourists.

The TBRL will serve as a holding company for the development and act as project sponsor and developer and also handle negotiations with prospecting tenants, marketing /brand management, resort management and maintenance. As a legal entity, TBRL will enter into contracts with tenants and providers of key services. The TBRL is proudly the sponsor of Cross River State government as the main promoter. The state government intends to restrict the equity participation of the state and its agencies to a maximum of 10 percent of the total shareholding of TBRL with the balance of the shareholding (90%) being held by local and international and individual investors.

Tinapa Business Resort Limited (TBRL) is a limited liability company that would serve as the holding company for the development and general management of the project. TBRL in the interim has a Chief Executive Officer (CEO) together with an Interim Board of Directors to provide strategic direction to its operation. TBRL has retained the services of Broll property group, an internationally renowned property and facility manager based in South Africa, to manage the operations of the Tinapa.

Incentives and Attraction to Investors

In line with the Federal Government reform programmes to diversify the national economy from oil and the increasing realization by the government in recent years of the opportunities presented by tourism for economic growth, we thus found it imperative to propose and implement some policies which also govern the running of Tinapa. Such policies include

*Encouraging domestic and foreign private sector investment in tourism developments by offering incentives like tax holidays and soft loans.
*Identification of centre of attraction for tourism purposes by Federal Government, State and Local government and promotion of such centres.
*fostering a favorable environment for foreigners, and establish effective and co-coordinated agencies for planning, development, promotion and marketing of tourism within and outsides Nigeria.

The increasing focus of the Federal government on growing the tourism industry is
positive for the project Tinapa. We realize that the major trading commodity in the state is peace and I think that is what any investor needs, (enabling business environments) to thrive, this in itself will attract potential investor because we are repositioning to become an investors haven here in Cross river.

Driving Force to Tinapa

Cross River State with the population of 2.5 million people, has one of the richest accumulations of natural resources in Nigeria with agriculture being the mainstay of its economy which contributes over two third of its GDP. The Calabar Free Trade Zone in Cross River State was created to encourage industrial and manufacturing diversification in the state, create opportunities for backward integration between other sectors of the state economy and through these initiatives transform the state into a trade hub for the region which will in turn create job opportunities to our teeming unemployed youths. The market and financial feasibility study conducted by KPMG indicates that Tinapa will be capable of attracting approximately 1.6 million people annually including Nigerian traders and wholesalers, West African traders and Shoppers, Calabar residents, and target population in South-South and South-eastern Nigeria, expatriates resident in Nigeria and international visitors. This is why we see Tinapa as one of such projects that would accommodate our peculiar needs.

AGRIC SECTOR, EPZ AND TINAPA, INTEGRATION TO MAXIMISE STATE ECONOMIC POTENTIALS
As we know, Cross River State is agricultural bound, though clustered all over are subsistence farmers but government has over the years tried to encourage large scale farming especially through its pineapple and oil palm pilot programmes across the state. Apart from increasing output, it also looks at full utilization of Export Promotion Zone (EPZ) through the various produce from the farms for manufacturing and subsequent export of final goods. It is expected that the potential investors on seeing these agricultural potentials will come in to the EPZ with their equipments, (duties free) to establish and assemble them at the zone in Calabar and have their factories fed by our agricultural produce (as their raw materials). After manufacturing, the produce will then either be exported through the free zone or be moved to Tinapa for final consumption. We can clearly see how the economic potential of the state will be fully utilize with EPZ and Tinapa as the main components. With all these incentives therefore, an investor will achieve a comparatively high profit outlay which in itself is enough to lure any person to invest in this project.

SEEDS' Programme Intervention

Basically, SEEDS is our own home grown equivalent of poverty reduction strategy. It is a programme support document and a total picture of our economic blue print. In other words, it is a road map that fashions out our economic directions. It has a minimum content which is anchored on our priority as a state. We are concentrating on the area that we have comparative advantage - Tourism and Agriculture. Since our developmental approach is multi-sectoral, we will not over look Urban Renewal, not even rural infrastructure, electrification and the health sector. You can also see that our flagship in tourism is the Tinapa project and Obudu Cattle Ranch Resort. We are investing heavily in this sector particularly in the development of infrastructure. At the end of the day, these investments by government are expected to be private sector driven. That is why we are developing these structure so that they can thrive. We have set a target to become Africa's Tourism destination by 2010 and this target is enshrined in our SEEDS initiative. In the same way as in "NEEDS" - National Economic Empowerment Development Strategy of the federal government, SEEDS is our own home grown equivalent of needs. The Federal government has fashioned its own NEEDS. So we have, in line with our own peculiar circumstance fashioned out our programme to address our economic problem. What government is doing is just providing a frame work to the peoples programme (SEEDS), government does not own it. This document was not formulated by government but was put together drawing from people's input during the Stakeholders' workshop and at the different senatorial fora. We also presented these documents for criticique which we achieved and today we now have an economic blue print which we now implement, that is the "State Economic Empowerment Development Strategy" "SEEDS". Evidently, the programme is purely people oriented though it encompasses our blue print as government. Even in our development plan, we adopt a bottom-top approach development strategy here in the state. It is all about ownership by the people. After all these consultations were made, we now have a document we intend to finalize within this quarter. We are working with the United Nations Development Programme consultants who have assisted us technically in developing these documents and they are coming again to assist us in this final process.

SEEDS' Objectives
1. Wealth Creation
2. Poverty Reduction/Eradication
3. Employment Generation
4. Value re-orientation

Impact on People

Since it is people oriented programme, the 'SEEDS' initiative has already impacted positively on the people, for instance, Cross River State has currently covered about 75% rural electrification and by the end of 2006 almost all the rural community will be linked to the National grip. So SEEDS is addressing the rural economy problems which had existed before now. We are developing the non-oil sector generally to boost our economy and to generate employment because if there is anything that is like a time bomb in the nation today, its unemployment. We are using tourism development to address this problem, both in Agriculture and Tourism, the State economy will drastically improve and it will be better for both the state and its citizenry. We are committed to better the lots of our people through "SEEDS"

Legacy

I would love to leave a peaceful state with a market driven economy that would shift our current dependence on Federal Government statutory allocation. My focus is that in the next few years, we would be a model state where our investment would open wide vista of employment opportunities, attract viable businesses and create wealth for our people.