NI G ERIA Nigerian state presses federal government to grant duty-free status to troubled project on the hook for $400 million in development costs Federations

 2008 LY JUNE | JU REUTERS/Ak intunde Ak in l e y e Tinapa business resort stands empty in , , in December 2007. Cross River state did not get full approval beforehand from the federal government.

By Dejo Olatoye on revenue from the federation account, billion naira loan (US$382 million) was which funds all state governments and taken out by Cross River state on orders inapa Resort is a ghost town which in turn comes in large part from of then governor . The state today instead of the free trade Nigeria’s oil revenues. To develop the borrowed the money from several com- zone that had been promoted Tinapa project, the state has had to take mercial banks and from the capital as Nigeria’s answer to Dubai. out large bank loans. market. The expectation was that Tinapa T Unfortunately, the state seems to have would be an instant success and a source The resort and mega-shopping centre near the Atlantic coast in Nigeria was put all its eggs in one basket. One year of income to the state. supposed to be the jewel of Cross River after the colourful inauguration of the state. It was intended to be in operation Tinapa Business and Leisure Resort in Resort stands empty by now, even churning out films for Calabar in April 2007, no international or However, no free trade zone has yet been Nigeria’s huge “Nollywood” film indus- high-profile merchant has begun operat- created. Tinapa has become a place for try. The goal was to bring revenue to the ing there. Tinapa’s website has little to selling cell phones and telephone cards. state by offering tax-free goods to wealthy lure business or customers – a nearly Its largest activity to date was the Miss Nigerians who were spending millions empty calendar and photos of a press Nigeria contest in late May 2008. As a outside the country in places like Dubai, conference aren’t exactly inspiring. result, the resort has not been generating and to tip the trade balance by luring Modelled on similar facilities in enough revenue to pay the interest on upscale consumers from other African Dubai, Hong Kong and elsewhere, the the loans. The burden of loan payments countries. US$400-million project was aimed at has already been damaging to the state’s Cross River, one of Nigeria’s 36 states, combining business and leisure. But economy. is unlike its sister states of Delta, River somehow the take-off of the project was The federal government has been and Bayelsa in the Niger Delta as it has scuttled. deducting interest payments to service very little oil on its territory. It depends To finance the construction, a 45 the debt from Cross River’s federation account allocation. This has had a seri- ous effect on the state’s ability to perform Dejo Olatoye, a journalist based in , Nigeria, is a former deputy editor-in-chief of the other functions effectively. For instance, News Agency of Nigeria. forumfed.org customs officials have been scaring away investors. A different point of view is offered by Dr. Nya Asuquo, a former lecturer in eco- nomics at the University of Calabar, who said Tinapa “is one of the products of Nigeria’s penchant for fancy and white elephant projects, which cannot be eco- nomically viable because of the current level of development in the state.” Asuquo said before Tinapa can thrive as REUTERS/S an economically viable venture, there must be a good network of roads and effi- unda cient air and rail services. He said the Federations y A

ghae idea of replicating Dubai in Calabar is z

e merely a fantasy that does not corre-  Umaru Yar’Adua (right), President of Nigeria, talks to supporters during March 2007 spond to the socio-economic realities of elections. , Governor of Cross , and Yar’Adua inherited the Tinapa the country. resort headache. The Tinapa Hotel, with 243 rooms and

2008 a river view, is supposed to be ready for LY the project’s monorail linking the airport former president Obasanjo’s office that the FIFA World Cup games for athletes and the resort – to be jointly financed by Tinapa would enjoy free trade status, but under the age of 17, which is to be held in the state and the federal government – there is no paperwork to prove that the Nigeria in 2009. Governor Imoke set up a

JUNE | JU cannot be built because the state is too former president made the commitment. 21-man local organizing committee in strapped for cash. Civil service promo- The Tinapa project is still being con- February 2008 to compete with other tions and allowance increases in Cross sidered by the federal government but Nigerian states for the right to host the River have also been delayed. the Customs Service has so far refused to games. The committee had been pro- The managing director of the resort, give its approval. Ndem said the pres- moting Calabar’s facilities. Bassey Ego Ndem, said Tinapa was ence of customs officials at the resort – However, in April, the Tinapa designed to provide Nigerian business- who carry out orders from head office Business Resort Hotel, which could people with a local alternative to Dubai not to allow the duty free zone to operate house competing teams, the media and and to retain some of the large amounts – had been a stumbling block to its spectators, was not yet open. Bassey of money which have been flowing out of operations. Ndem, the managing director of Tinapa, Nigeria. Ndem blamed Tinapa’s prob- said finishing touches were still being lems on the failure of Nigeria’s federal Investors scared away added to the hotel project, adding that it government to provide legal backing to Liyel Imoke, the current governor of did not yet have a website or a telephone the resort’s operations. Such legal back- Cross River state, used a recent public number. He said he could not specify ing, he said, was expected to include function to appeal to the federal govern- when it will open for business because conferring on Tinapa the status of a free ment to adopt legislation that would the Cross River State government is wait- trade zone. enable economic activities to start in ear- ing for an enabling law to be passed Former governor Duke’s administra- nest at the resort. He said the absence of by the federal government before tion reportedly received assurances from this legal backing and the presence of continued on page 9

Cross River state in a nutshell coastal areas. and the country, but it was eventually Although Cross River State has one lost to Cameroon after a prolonged According to Nigeria’s 2006 census, of the largest expanses of rain forest in legal battle before the World Court. Cross River State has a population of the country, it falls within the group of 2.89 million. Census figures have always states with the lowest population. It One thing Cross River State has to its been a subject of controversy in Nigeria accounts for two per cent of Nigeria’s credit is its peaceful atmosphere. The because they have always run counter population of 140 million. Within the restiveness that has been a feature of to the established demographic pat- Niger Delta, it also has the second-low- life in parts of the Niger Delta has not tern. While population movements are est population. Oil-rich surfaced in Cross River. As well, there known to be toward the coastal areas in has the smallest population with 1.7 has been no ethnic or political violence other parts of the world, the opposite million. in the state. The manner in which polit- has been the case in Nigeria. The coun- Beyond Cross River’s borders – and ical posts are distributed among the try’s arid zones have consistently had outside of Nigeria’s – is the Bakassi state’s 24 ethnic groups has ensured higher population growth rates than Peninsula. Bakassi might have been a effective balancing of ethnic interests. source of oil wealth for both the state

forumfed.org Catalonia. parliamentary elections will be held in facto by the two largest parties – have There will also be the umpteenth 2009 at the latest. Any of the possible sce- mirrored the political tensions between attempt to add reform of the Senate to narios – whether the referendum is the government and the opposition the decision-making agenda. The other forbidden, whether it is held and won or forces. These tensions between the pro- major regional issue is the attempt to whether it is held and lost – will have pro- ponents and opponents of territorial reform the statutes of the 10 regions that found effects. They will certainly affect reform also exist among the judges of the have not yet been amended. the outcome of the Basque parliamen- Constitutional Court. The first wave of legislation is likely to tary elections and probably will also Thus, the composition of the Court is bring two types of revisions to other affect the direction taken in the future a crucial factor. Soon, the Court will have regions’ statutes of autonomy: a rather process to reform the Basque statute. to partially renew its composition. The ambitious one or a modest one. In terms of four of the 12 judges will expire, regional referendums, Catalonia already Challenging Catalonia and three of these were appointed by the approved an ambitious revision while The new statutes of other regions will be conservatives. The socialists and conser- Valencia approved a modest one. These heavily dependent on the coming ruling vatives are expected to agree to appoint Federations reforms will probably set the pace for the of the Spanish Constitutional Court two judges each. Under this scenario, the reforms to follow. Of the 10 possible about the constitutionality of several conservative judges would be in the  reforms, three of them could easily gen- aspects of the Catalan statute. The court’s minority, meaning that the reformed erate conflicts and disagreements: the ruling will also affect the approach and Catalan statute is more likely to remain statutes of the Canary Islands, Galicia schedule for the creation and implemen- intact. and the Basque Country. tation of the new statutes. At first glance, it might appear that the 2008 Reforms to the regions of the Canary The conservative People’s Party Spanish general election of 2008 has LY Islands and of Galicia could generate expressed its fundamental disagreement reinforced the bipartisan nature of cen- conflict because of ordinary party poli- with the political approach taken by the tral politics. But minority parties, in

tics, but the Basque case is quite Catalan statute by challenging large parts holding the balance of power, maintain a JUNE | JU different. of it before the Constitutional Court. key role and have already shown they can In a challenge to the central govern- Several aspects of the implementation of fight back. ment, the president of the Basque the Catalan statute, and other statutes Zapatero is only the second prime government, the nationalist José that followed, are on standby, waiting for minister in recent history to be elected in Ibarretxe, has said his government the court’s ruling. the second round of voting. This could intends to call for a referendum for The Court itself has been at the centre mean he will govern Spain from the cen- Basque independence in October 2008. of the political debate on territorial tre to achieve a broader consensus. Whether or not it is constitutionally pos- reforms. Its members, appointed by the sible and politically feasible, the Basque Spanish government and parliament – de

Nigeria [from page 6] service, has been blamed for the fact that Donald Duke. almost nothing is open yet in Tinapa. Duke, the then governor of Cross the Business Resort can get off the Even an honest customs service could River, was genial and amiable. He did not ground. have reasons to hesitate before opening become involved in controversies. He Calabar’s airport, the Margaret Ekpo such a major duty-free zone. was not a crony of then president International Airport, was supposed to An article by Reuters news agency in Obasanjo. Relat ions between the federal be a key link in bringing Nigerians and December 2007 quoted one senior offi- government and the Cross River State international visitors to Tinapa. cial as saying the customs service has “a were cordial then when the two men By March 2008, it had only one run- powerful vested interest against duty free were in office because Duke avoided way, which is 2,500 metres long. Only trade.” Also, the federal government itself confrontation with Obasanjo. In retro- four airlines – all from Nigeria – were may be reluctant to forego the tax reve- spect, Duke’s major misstep seems to operating out of the airport. In April 2007, nue it would lose from an internal have been to take verbal undocumented the former governor of Cross River held a duty-free zone, in exchange for a boom promises for a duty free zone from then ground-breaking ceremony for a 13-kilo- to the economy of just one state. president Obasanjo. metre monorail link from the airport to Since his election in 2007, Nigerian Tinapa. One year later, although feasibil- Investment lies dormant President Umaru Yar’Adua, a former ity studies and a survey have been Wherever the fault may lie, one fact is chemistry teacher, has demonstrated a completed, construction work has yet to incontrovertible: Tinapa remains a vast style that has won him considerable begin. but dormant investment. Solving this respect. Opposition figures see him as a problem is perhaps the biggest challenge breath of fresh air. He will have to sum- Governors were innovators facing Governor Imoke. A year ago, his mon all of his interpersonal people skills, Although Cross River has a greater repu- Cross River state was highlighted by the and then some, to work with Governor tation for honesty than other states in the Economist for its “impressive transforma- Imoke in breathing new life into the country, corruption elsewhere, particu- tion over the past eight years,” brought Tinapa project. larly in the Nigerian federal customs about by Imoke’s predecessor, Governor forumfed.org