In an interview with Fortune magazine, Sultan Ahmed Bin Sulayem, Founder and Chairman of Dubai World a holding company with billion in assets was asked his formula for success he replied
“build a port, establish a free trade zone around the port and then build luxury hotels and housing nearby”.
It sounds so simple but Dubai holdings has pulled it off. It’s model is a success It owns the Barneys in New York, owns the “Palms inlands” in Dubai. Dubai worlds is also building a $28billion city in Saudi Arabia, $20 billion worth of luxury projects in Algeria, resorts in Morocco, Housing in Vietnam, Free trade zone in Senegal, and Game parks in South Africa. Dubai World is investing $230 million in Rwanda national parks.
The wealth of Dubai has come from positioning herself as a world class destination to trade, shop and rest. Taiwan and Singapore with absolutely no natural resource have prospered on free trade, efficient ports and manufacturing.
Cross River state in my estimation is the most forward thinking and innovate state in Nigeria. Tinapa in Cross River is a visionary project. The plan was simple and well thought out. Tinapa is designed as a trading and resort hub, near a port, near a free trade zone. Tinapa in Calaber was designed to become a little Dubai in Nigeria.
The Tinapa Business Centre, according to Julius Berger who built it, “is the single largest purely private infrastructure investment in Africa”. Tinapa consists of four wholesale emporiums of 10,000 square meters each, 100 retail outlets, 54 line shops, parking lot for about 4,000 cars. A 242-room hotel (inclusive of 59 executive suites) of three-star standard. a water park, casino, cinema, and a film Studio a fisherman’s village comprising themed bars, a themed nightclub and an arts and crafts village with 20 stalls, A warehouse cluster of four warehouses with a combined lettable area of 17,000 sqm. (this is not some mall).
The infrastructure work in Tinapa is complete, they built an Independent Power Project, They dredged the lake, the Tinapa zone also secured certain key fiscal approvals i.e. goods up to a maximum of N50,000 within Tinapa Free Zone, shall be entitled to be imported into the Nigerian Customs Territory, duty free”…However, Tinapa has not functioned at optimum, Why? The devil is in the details….
First the port, or sorry the lack of a port in Tinapa.
The 84-nautical mile Calaber port access channel is not properly dredged, This is in spite of two contracts awarded by Abacha and Obasanjo. The shallowness of the Calabar channel means large ships can’t berth there. According to ECM Terminals Ltd, who are the concessionaires to terminal B in the Calaber Port , they handled only 384 vessels in the last three years of full operations. Some goods for Tinapa land in Port Harcourt.
Secondly, is Tinapa really a free trade zone?
Tinapa itself is not a Free Trade Zone, Calaber port is the Free Trade Zone, Tinapa is a Free Zone…NOT a free trade Zone.
In a Free Trade Zone, Legislative provisions pertaining to taxes, levies, duties and foreign exchange regulations shall not apply; No import or export licenses shall be required. To be specific, even banned goods in the extant fiscal policy are allowed into the zones, but are not be diverted into the customs territory except under special circumstances and subject to the applicable customs regulations.
The the former MD of Tinapa , Chief Bassey Ndem, said, “Nigerian Customs seized about 75 containers that were meant for Tinapa at Port Harcourt and they wanted the investors to come and clear the containers in Port Harcourt, but we disagreed, saying that was not what the law said. “By making people go to other ports to clear their goods, you are subjecting them to the same bureaucracy and corruption they were running away from.”
The Nigerian Customs Service however pointed out that it discovered cases of diversion and smuggling of prohibited items from the Free Trade Zone into its territory, hence it had to come up with stricter measures.
The reality is that as the operators in Tinapa saw the disagreement between Tinapa and the Nigerian Customs Service, they stopped importing to retail in Tinapa, Tinapa suffered.
so where do we stand?
So again, the Dubai model, “build a port, establish a free trade zone around the port and then build luxury hotels and housing nearby”. Tinapa has not worked because, there technically is no real port and no free trade zone. Its baffling and annoying that past administrations have not taken this seriously, if say Warren Buffet had established Tinapa, as a foreign Investor, he would have gotten his licenses with fanfare, and met with the President but Cross River as “local” investors has to battle Nigerian Customs. (you can’t blame the Customs Service).
These are issues that could have been cleared up, so that this investment can function. The Calaber Port can be dredged via PPP, the Tinapa complex can be given a joint FTZ license with the Calaber FTZ…This is after all a $470m investment that a state without crude oil earnings committed to create jobs for her people, and grow the national economy.
If I was the Governor of Abia in 2015, and I saw the hassle Cross River has gone through over Tinapa, I would be a fool to contemplate such a project, I will simply look for Shoprite to occupy a mall and move on, (and that Is what many have done).
If Tinapa, that is local, that is diversification, that is job creating, that is simulative, that generates revenues for the state and federal government cannot work, then pray, what can work in Nigeria?
Lets not kill vision. Lets not kill Tinapa over “paperwork”
Its our problem, we can fix it
