Project Title Or Company Name

Growth & Employment Project (GEM)

Federal Ministry of Industry, Trade & Investment World Bank Assisted

Final report – Meetings, Incentives, Conferences & Events (M.I.C.E) Industry Value Chain

Reliance Restricted 15 May 2018 | Version 1.0 15 May 2018 | Version 1.0

Reliance Restricted The Project Coordinator, Block G, Room 225, Old secretariat, Area 1, Garki, Abuja. Nigeria.

Ernst & Young Nigeria Market Study Report - MICE Segment 15 May 2018 UBA House 10th Floor Dear Sirs, 57, Marina Lagos In accordance with your instructions, we have performed the work set out in your engagement agreement dated 11 September 2017 (the “Engagement Agreement”) in connection with the market study of four (4) value chains across different locations (the ey.com “Market Study”). Purpose of our Report and restrictions on its use This report was prepared on the specific instructions of the Federal Ministry of Industry Trade & Investment for the Growth and Employment (GEM) project objectives and should not be used or relied upon for any other purpose. This Report and its contents may not be quoted, referred to or shown to any other parties except as provided in the Engagement Agreement. We accept no responsibility or liability to any person other than GEM or to such party to whom we have agreed in writing to John Uwajumogu accept responsibility in respect of this Report, and accordingly if such other persons choose to rely upon any of the contents of Partner this Report they do so at their own risk. Transaction Advisory Services Nature and scope of the services T +234 1 844 9962 M +234 815 082 9090 The scope and nature of our work, including the basis and limitations, are detailed in our engagement letter. F +234 1 844 9963 E [email protected] This report comprises the MICE segment market assessment, where we have summarised our key findings, together with references to the supporting analysis. Our work commenced on 15 November 2017 and was completed on 23 February 2018, therefore, does not take account of events or circumstances arising after 23 February 2018. Whilst each part of our Report addresses different aspects of the terms of reference for this engagement, the entire Report should be read for a full understanding of our findings and advice. We appreciate the opportunity to provide our services to Federal Ministry of Industry Trade & Investment. Please do not hesitate to contact us if you have any questions about this engagement or if we may be of any further assistance. Yours faithfully,

John Uwajumogu

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Dashboard 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Table of contents 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Background, Executive International Nigerian overview objectives & ... summary overview 1 2 3 4

Page 4 Page 7 Page 14 Page 18

Market sizing and Value chain Competitive Policy, legislation growth forecast landscape & case studies 5 6 7 8

Page 23 Page 27 Page 31 Page 39

Business & Risk assessment Strategic Appendices policy factors ... recommendat ... 9 10 11 12

Page 45 Page 50 Page 54 Page 61

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In this section Page

Background, objective and study methodology 5

Definition of MICE 6

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1 Background, objectives & study methodology 1 Background, objectives ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Background, objective and study methodology 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Background Objectives of the assignment

► The Government of Nigeria has emphasized the importance of diversifying the economy, ► The objective of this assignment is to provide the GEM project with a deep market supporting sectors that have potential for growth and creating massive employment. understanding of selected value chains within Nigeria and an appraisal of their competitiveness in relation to other countries recognized for significant trading in ► In line with this commitment, the Federal Government has sought the assistance of the World Bank in supporting Micro, Small and Medium Enterprises (MSMEs) operating in different high these value chains and also increase growth and employment in participating firms in potential sectors throughout Nigeria. Nigeria. ► This analysis will be used to inform the development of GEM supported interventions, ► This support is being implemented under the Federal Ministry of Industry, Trade and Investment (FMITI) and operationalized in the Growth and Employment (GEM) Project by the Project as well as providing valuable insights to private sector value chain stakeholders, Implementation Unit (PIU). towards the goal of creating jobs and economic growth.

► The project focuses on manufacturing and service sectors, specifically supporting ICT, entertainment, tourism and hospitality, light manufacturing and construction.

Study methodology We adopted three methodologies namely desk research, qualitative interviews with industry stakeholders and a quantitative survey on selected value chain players across several states in the locations listed below. The table summarizes the population samples of the primary research conducted.

Location Event Planners Rentals Event Centers Entertainment Catering/Drinks Incentive Travel Sub-Total Lagos 98 96 95 60 58 95 502 Calabar 17 16 17 16 16 16 98 Abuja 51 50 50 50 50 50 301 Kano 18 16 17 16 16 18 101 Total 184 178 179 142 140 179 1,002

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1 Background, objectives & study methodology 1 Background, objectives ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Definition of MICE 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Overview

The International Congress and Convention Association (ICCA) defines MICE as Meetings, Incentives, Conferencing and Exhibitions, a type of tourism in which large groups, usually planned well in advance are brought together for a particular purpose. The industry trending towards using the term 'meetings industry' to avoid confusion from the use of an acronym. Other industry educators are recommending the use of "events industry" to be an umbrella term for the vast scope of the activities in the meeting and events profession.

Meeting: General term indicating the coming together of a number of people in one place, to confer or carry out a particular activity. Frequency: can be on an ad hoc basis or M according to a set pattern (e.g annual general meetings, committee meetings, etc.)

Incentive: Meeting event as part of a programme which is offered to its participants to reward a previous performance. Incentive tourism is usually undertaken as a type of employee reward by a company or institution for targets met or exceeded, or a job well done. Unlike the other types of MICE tourism, incentive tourism (festivals & carnivals is I usually conducted primarily for entertainment, rather than professional or education purposes).

Conference: Participatory meeting designed for discussion, fact-finding, problem solving and consultation. As compared with a congress, a conference is normally smaller in scale and more select in character - features which tend to facilitate the exchange of information. The term "conference" carries no special connotation as to frequency. Though C not inherently limited in time, conferences are usually of limited duration with specific objectives. E Exhibition: Events at which products and services are displayed.

Recently, there has been an industry driven initiative to not use the "MICE Market" label and instead say "The Meetings Industry" which encompasses all the above. Most components of MICE are well understood in the market place perhaps with the exception of incentives.

For the purpose of our report, the MICE sub-categories focus will be on Event Planning, Event Centres, Incentive Travel, Catering & Drinks, Entertainment and Rentals. We will detail our findings across four major locations: Lagos, Abuja, Calabar and Kano.

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In this section Page

Summary 8

Strategic recommendation and road map 13

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2 Executive summary 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Summary 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Background and Objectives of the study International overview ► The Government of Nigeria has emphasized the importance of diversifying the economy, MICE market is large and diverse. It consists of organisers and suppliers engaging in the supporting sectors that have potential for growth and creating massive employment. development and delivery of meetings, conferences, exhibitions and events of all types ► In line with this commitment, the Federal Government has sought the assistance of the World ranging from professional/business meetings, entertainment, cultural, academic etc. These Bank in supporting Micro, Small and Medium Enterprises (MSMEs) operating in different high can also be categorized into several groups based on their objectives and goals, some of potential sectors throughout Nigeria. which are mentioned below:

► This support is being implemented under the Federal Ministry of Industry, Trade and Investment • Award functions — films, music, art, science, etc. (FMITI) and operationalized in the Growth and Employment (GEM) Project by the Project • Leisure events — leisure sport, music, fine art, beauty pageants, fashion shows Implementation Unit (PIU). • Cultural events — ceremonial and religious festivals, heritage, and folklore-related ► The project focuses on manufacturing and service sectors, specifically supporting ICT, events entertainment, tourism and hospitality, light manufacturing and construction. • Organizational and academic events — trade exhibitions, business meetings, annual ► The objective of this assignment is to provide the GEM project with a deep market understanding general meetings, trainings, seminars, conferences, product launches, expos, of selected value chains within Nigeria and an appraisal of their competitiveness in relation to examinations etc. other countries recognized for significant trading in these value chains and also increase growth and employment in participating firms in Nigeria. The activities of this industry play a key role in the growth and development of businesses, cities and destinations and hence are considered as critical drivers of economic growth and ► This analysis will be used to inform the development of GEM supported interventions, as well as GDP. (This assertion is also supported by the global economy and the World Tourism providing valuable insights to private sector value chain stakeholders, towards the goal of Organization ).The countries that are considered most significant in the global MICE creating jobs and economic growth. industry in the last 3 years (2014 to 2016) include the United States, Germany, United Study methodology Kingdom, Spain and France. This is because these countries have hosted the highest number of corporate meetings in recent times We adopted three methodologies namely desk research, qualitative interviews with industry stakeholders and a quantitative survey on selected value chain players across several states in the Top 5 countries ranked based on number of key corporate meetings organized in 2016 locations (Lagos, Calabar, Abuja and Kano). The total sample size was 1,002 across the sub segments: Event planners, rentals, event centres, catering/drinks and incentive travel. 1,000 925 900

Definition of M.I.C.E d 800 l

e 667 h 700 s

The International Congress and Convention Association (ICCA) defines MICE as Meetings, g 582 572 n i Incentives, Conferencing and Exhibitions, a type of tourism in which large groups, usually planned t 600 522 e e 500 well in advance are brought together for a particular purpose. m f o 400 r

The industry trending towards using the term 'meetings industry' to avoid confusion from the use of e b 300 an acronym. Other industry educators are recommending the use of "events industry" to be an m u umbrella term for the vast scope of the activities in the meeting and events profession n 200 100 0 US Germany UK Spain France

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International Industry Trends Nigerian Overview Nigeria is the most populous country in Africa with a population of 192m. Nigeria is ► The global MICE industry is currently witnessing a new generation of customers that are committed to the idea of an open and interconnected world. Some seek new fulfilling experiences principally an oil based economy, income from the sale of crude oil constitutes about 75% of that deliver emotional engagements. budgetary revenues and close to 90% of its exports. Nigeria is the second largest crude oil exporter in Africa and has the largest natural gas reserves of 5,173 bcm on the African The major trends that are likely to drive consumers include the following: continent. Nigeria witnessed robust economic growth with an annual average rate of 7% between 2005-2014 owing to favorable oil price and economic reforms embarked on by ► Localization: A useful example is found in a remote location in the south of Seoul in South successive governments since the return to democratic rule in 1999. Korea. There, guests are invited to cook a meal in an ancient Buddhist Temple and learn about food sharing for Asian communities & cultures. Also in remote Myanmar, a guided sailboat ride The Nigerian economy is expected to rebound moderately over the next 3 years to 2020 as on tranquil waters with local fisherman which reveal spectacular cooperative fishing between the Federal Government implement its Economic Recovery and Growth Plan (ERGP) by dolphins and fisherman, a practice that dates back centuries. supporting agricultural independence, energy sufficiency and infrastructural development. The primary objective of the ERGP is the diversification of the economy, with less reliance ► Cultural Immersion: Experiences of operators over the years have also shown that MICE on crude oil trade. attendees enjoy immersive, behind-the-scenes experiences with local Experts. Examples of this include handcrafting carnival masks with Italian artists in their Venetian workshops and sitting In addition, stability in crude oil prices, expected from the continuous implementation of with local Artisans in Vietnam for stories about their art traditions and culture. production cut agreements reached by OPEC members is expected to boost government revenue and alleviate public investment cuts. ► Community Impact: MICE attendees also desire to actively participate in communities they visit. For example, in Barcelona, there is a growing practice where guests are invited to a special Global trends impacting the performance of the market segment in Nigeria cooking class not led by professional chefs, but by immigrants who have found a way to share their culture and start a new life. In Istanbul, guests can connect through music, where bespoke ► The global MICE trends has not significantly impacted the activities of local MICE programs bring them together with displaced children who are hoping to build a future through industry in the past but will potentially grow the industry in the near future. Despite this, their music talents. some of the Operators in Nigeria are hosting international events.

► Unusual Destinations: According to Pacific World (a Global Destination and Event ► Calabar international convention centre has outlined plans and is entering into Management company in over 38 countries), today’s MICE travelers increasingly want to visit partnerships with foreign players to host international events. Also, the National remote places or to experience known destinations in new ways. In Scotland, for example, Association of Tour Operators (NATOP), one of the core drivers of the domestic tourism groups can explore the countryside via new whiskey trails and in China, they can experience a sector, recently initiated an awareness compaign aimed at promoting new services and secluded Shaolin Temple near Luoyang. destination vistas in Nigeria. This initiative has been able to create awareness about the domestic relevance of tourism, its importance to the economic growth of the people and Business opportunities for Nigerian MICE companies country and has attracted the interest of young operators within the local MICE sector.

► The local MICE industry is evolving, some international MICE companies had organized ► An analysis of the 2017 tourism year would also show how remarkable tourism trends conferences and meetings and exhibitions in Nigeria. Some of the locations used in Nigeria were introduced by the private sector to boost promotion, marketing and tourists arrivals include Eko Hotels and Suites, Federal Palace Hotel, International Conference Centre in Abuja to domestic destination. In that year, MICE took a leading role, with organizers of and Calabar. The prospect of this trend continuing is dependent, among other things, on social Akwaaba African Travel Market, Bantaba, Accra Weizo introducing a MICE and hotel infrastructure, security, improved services from the Operators, among others. show in Abuja tagged JABAMAH.

► Also, the trending attitudes and desires of global MICE consumers will no doubt change the Factors driving geographic distribution of MICE market in Nigeria local industry dynamics as the MICE companies will have to scale up in order to attract a • Access to market significant share of the global market. • Access to suppliers

• Existence of related business clusters

• Other reasons.

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Direct contribution of travel & tourism to GDP Historical market demand The Travel & Tourism Economic Impact Report(2017) defines the direct contribution of Travel & Assumptions: Tourism to GDP as a reflection of the ‘internal’ spending on Travel & Tourism, as well as ► Travel & tourism sector’s overall direct contribution of 1.7% to national GDP in 2016, government 'individual' spending. The direct contribution of Travel & Tourism to GDP is provides an indication of each state’s travel & tourism’s value in relation to state’s calculated from total internal spending by ‘netting out’ the purchases made by the different GDP tourism sectors. This measure is consistent with the definition of Tourism GDP, specified in the 2008 Tourism Satellite Account. The total contribution of Travel & Tourism includes its ‘wider ► MICE constitutes 50% of the travel & tourism’s contribution to national GDP. impacts’ (i.e. the indirect and induced impacts) on the economy. ► Meetings, conferences & exhibitions (MCE) together constitute 75% of the MICE sector, while incentive travel averages 25% (Travel & Tourism Economic Impact Contribution of travel & tourism to GDP & employment Report - 2017)

► Average cost of each meeting, conference, occasion or exhibition hosted by 3.0 2.5 t

n companies or middle class families is N2.8m (primary research findings, 2017) e P m

2.5 y D 2.0 o ► l Average cost of overseas incentive travel for deserving staff is N450k (primary G p y

m research findings, 2017) m

2.0 e o

y 1.5 n o m c 1.5 o Meetings/Conferences (Nm) Unit e n o e l c 1.0 o e

h South-West 174,150 235,276 1.0 e l w o f h o 0.5 w South-South % 0.5 f 164,662 222,457 o

0.0 % 0.0 South-East 81,297 109,831 7 8 9 0 1 2 3 4 5 6 7 7 7 8 9 0 1 2 3 4 5 6 7 7 0 0 0 1 1 1 1 1 1 1 1 2 0 0 0 1 1 1 1 1 1 1 1 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 North-West 97,156 131,257

Opportunities and risk factors North-East 49,462 66,822 OPPORTUNITIES North-Central 90,538 122,315

§ Opportunity to explore possible partnership opportunities with global players, to offer the Total 657,265 887,959 local and cultural content which global attendees presently crave state of infrastructure especially in the area of event planning and event centres. Incentive travel (Nm) Unit

• Taking advantage of the N300 million MoU signed with the Bank of Industry and National South-West 58,050 129,000 Council for Arts and Culture (NCAC). South-South 54,887 121,972 • Exploration of Nigeria’s rich cultural heritage and historical infrastructure, South-East 27,099 60,220 RISK North-West 32,385 71,967 § Lack of political will to drive MICE industry growth by government. North-East 16,487 36,638 § Poor state of infrastructure in the country. North-Central 30,179 67,065 § Political instability, conflicts and insecurity will creates disincentives for potential MICE players interested in Nigeria. Total 219,088 486,863

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MICE Value Chain Competitive Landscape The MICE value chain in Nigeria has large and small players in each of the sub segments. These The market is generally considered fragmented, however, in the event centre sub- providers offer venues for meetings/conferences and events, and there are planners who act as category, top 5 players are considered a cartel. intermediary between the service providers and users of these services. A significant proportion of players in this sector operate informally (including many of the For companies using incentives to reward employees for exemplary performance, they engage travel registered players). Primary research findings suggest that about 36% of players are not agencies/tour operators to arrange and implement such packages. The structure of the MICE industry is formally registered, while 40% operate with registration of business names. captured below: The MICE competitive landscape cuts across event planning, event centres, incentives, catering & drinks, entertainment and rentals. It also includes activities that directly or MICE value chain structure indirectly impact these sub categories.

Meetings Conference/ Events Exhibition Incentives Monopolies, informal & hidden rules along the value chain The MICE market is fragmented and highly competitive. However, some level of concentration exist at certain segments of the market. Generally, the industry players’ promotions and advertisement to gain customer loyalties Music/DJ MC Venues/Halls and increase market share. They also use price, locations, quality of services and Travel Arrangement equipment as a differentiating factor. Despite this competition level, the hidden rules in the industry does not permit any player to make disparaging comments about another Stationery/IVS Confectioners competitor(s) in the public domain. In essence, competition in the Nigeria MICE market is a healthy one and has positive impact of improving opportunity for collaboration Fabrics Flower/decor Direct access via among the operators, which in turn improves the delivery of services to the customers. website Assumptions for market players Caterers Drinks In determining the top players in each sub-category as well as their market shares, we have used the following: Photography Web designers Tour operator ► Conducted interviews with stakeholders

► Sourced for information available via secondary platforms Rentals Hair/make up ► Estimated a percentage for which top 10 players account for in the total market via our research findings Bridal wears Souvenirs Travel agency ► Determined and apportioned weights of top 10 players based on interviews and surveys carried out. Event planner Entertainment

Distribution environment and effects on regional trade • Distribution channels in MICE typically describe the long list of people and institutions necessary to deliver services to consumers. These include the meeting/event planners, event centers, entertainment providers, incentive houses, destination marketing companies and hoteliers amongst others. • There are however some distribution channels that can be considered as ‘major’ in terms of their ability to intermediate across a wide variety of stakeholders. Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 11 of 64 15 May 2018 | Version 1.0

Tax incentives available in the MICE sector Key policy factors impacting Nigeria MICE industry development • Incentive for reserve made out of profit for tourism development. Government policy direction is also a critical factor that affects the growth and development of the MICE industry. Policy direction that also focuses on attracting big conventions and • Accelerated Capital Allowance Scheme international meetings to hold in Nigeria will also re-energise the industry and create • Low Tax Treaty Concession Rate of 7.5 percent for foreign investors from treaty Nations. opportunities for growth. • Repatriation of net earnings outside Nigeria by foreign investors To help achieve this, the NTDC has a roadmap with short, medium and long-term objectives that are distilled into a 5-point action plan with the acronym CHIEF. This represents • Loss Relief Corporate Governance & Regulations; Human Capital Development; Infrastructural Development; Events & Marketing; and Finance & Investment.

Federal legislation regulating business activities in MICE industry Factors impacting MICE industry development

• Business activities within the MICE sector in Nigeria are regulated under the broader tourism Factors industry by the Nigerian Tourism Development Authority Act (1992) which mandates the Nigerian impacting Tourism Development Corporation (NTDC) to promote, develop and regulate tourism and MICE hospitality in Nigeria. • Until recently, there have been no amendments made to the 1992 NTDC Act to adequately reflect the current global trends and development in the tourism industry. Relaxation, Curiosity & Profession & Location Rest & • The proposed amendment provides the creation of Tourism Enterprises in all the States of the Business Culture Recreation Federation, which will be accredited for the purposes of standardization, quality assurance, consumer protection and public health and safety.

Business factors impacting market segment development Risk assessment

• Industry perception • Access to funds • Corporate governance and corruption H • Infrastructural deficiencies • Innovation • Infrastructural deficiencies H • Security • Lack of trained professionals • Security, crime and corruption H

• Crime and corruption • Lack of internal business structure • Access to finance H • High import duty/tariffs and exchange rates • High import duty/tariffs & exchange rates H • Inflation Risk H • High Cost of Borrowing Opportunities in the MICE market segment in Nigeria H • Foreign Exchange Risk H • Experience tourism • Demand and supply risk H • More non-traditional properties • Security risk H • Connecting MICE and social media • Political risk H • Combining incentives and meetings

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2 Executive summary 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Strategic recommendation and road map 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Strategic recommendation and road map

1 2 3 Establish a registered MICE Support infrastructural development Ease the access to finance for MICE association via Public Private Partnership (PPP) companies

4 5 6 Review the existing regulation to Reduce the import duties paid by Address the security challenges improve MICE governance MICE companies around MICE activity centers

7 8 9 Provide foreign exchange for MICE Provide subsidies & tax breaks for Increase MICE Promotional importers MICE promotional organisations Organisation / MICE Publicity

Improve strategic Communication policies

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In this section Page

The United States of America is the global leader in the M.I.C.E market 15

Contribution of travel & tourism to GDP and employment 17

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3 International overview 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... The United States of America is the global leader in the M.I.C.E market 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

General overview The International Congress and Convention Association (ICCA) defines MICE as Meetings, Incentives, Conferencing and Exhibitions, a type of tourism in which large groups, usually planned well in advance are brought together for a particular purpose. MICE market is large and diverse. It consists of organisers and suppliers engaging in the development and delivery of meetings, conferences, exhibitions and events of all types ranging from professional/business meetings, entertainment, cultural, academic etc. These can also be categorized into several groups based on their objectives and goals, some of which are mentioned below:

► Award functions — films, music, art, science, etc.

► Leisure events — leisure sport, music, fine art, beauty pageants, fashion shows

► Cultural events — ceremonial and religious festivals, heritage, and folklore-related events

► Organizational and academic events — trade exhibitions, business meetings, annual general meetings, trainings, seminars, conferences, product launches, expos, examinations etc. The activities of this industry play a key role in the growth and development of businesses, cities and destinations and hence are considered as critical drivers of economic growth and GDP. This assertion is also supported by the World Tourism Organization.

Countries that are most significant in the global MICE industry Major companies operating in this market segment

The countries that are considered most significant in the global MICE industry in the last 3 years (2014 to 2016) # Of Corporate Home include the United States, Germany, United Kingdom, Spain and France. This is because these countries have hosted Key Players in the global MICE market Meetings Held Country the highest number of corporate meetings in recent times. (2016)

Top 5 countries ranked based on Top 5 countries ranked based on Top 5 countries ranked based on American Express Meetings & Events US 70,191 number of key corporate meetings number of key corporate meetings number of key corporate meetings organized in 2016 organized in 2015 organized in 2014 Maritz Global Events US 5,593 George P. Johnson Experience Marketing US 2,000 1,000 925 1,000 934 1,000 Koelnmesse Gmbh Germany 2,000 900 900 858 851 850

d 900 l 800 800 e s 689 Ashfield Meetings & Events US 1,692 h s

667 g 800 g n s

700 i 700 n t g 636 582 582 i 624

572 t 700 e n i 545 e

e 533 t 600 522 600 CWT Meetings & Events US 763 e e

m 600 e m f

500 500 f o m 500 o f r Banks Sadler UK 570+ r o 400 e 400 e b r 400 b e m b m 300 u 300 300 Ashfield Meetings & Events UK Undisclosed u m N u 200 200 N n 200 Jack Morton Worldwide UK Undisclosed 100 100 100 0 0 0 Interface Tourism France France Undisclosed

E & TB Group Spain Undisclosed

Maximice Events Group Spain Undisclosed

These Event Planners organize meetings across the globe, hence the meetings recorded across their names were held in various countries outside the countries they operate from.

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International Industry Trends ► Growing preferences for localization and immersions in so many destinations ► The global MICE industry is currently witnessing a new generation of customers that are committed however have some risks including exposing MICE attendees to security risk to the idea of an open and interconnected world. Some seek new fulfilling experiences that deliver arising from increasing insecurity challenges around the World. emotional engagements. Business opportunities for Nigerian MICE companies ► The major trends that are likely to drive consumers include the following: ► The local MICE industry is evolving, some international MICE companies had ► Localization: A useful example is found in a remote location in the south of Seoul in South organized conferences and meetings and exhibitions in Nigeria. Some of the Korea. There, guests are invited to cook a meal in an ancient Buddhist Temple and learn locations used in Nigeria include Eko Hotels and Suites, Federal Palace Hotel, about food sharing for Asian communities & cultures. Also in remote Myanmar, a guided International Conference Centre in Abuja and Calabar. The prospect of this trend sailboat ride on tranquil waters with local fisherman which reveal spectacular cooperative continuing is dependent, among other things, on social infrastructure, security, fishing between dolphins and fisherman, a practice that dates back centuries. improved services from the Operators, among others. ► Cultural Immersion: Experiences of operators over the years have also shown that MICE ► Also, the trending attitudes and desires of global MICE consumers will no doubt attendees enjoy immersive, behind-the-scenes experiences with local Experts. Examples change the local industry dynamics as the MICE companies will have to scale up in of this include handcrafting carnival masks with Italian artists in their Venetian workshops order to attract a significant share of the global market. and sitting with local Artisans in Vietnam for stories about their art traditions and culture.

► Community Impact: MICE attendees also desire to actively participate in communities they visit. For example, in Barcelona, there is a growing practice where guests are invited to a special cooking class not led by professional chefs, but by immigrants who have found Macro-economic outlook (Average from 2018 – 2022) a way to share their culture and start a new life. In Istanbul, guests can connect through music, where bespoke programs bring them together with displaced children who are Nominal GDP (US$, hoping to build a future through their music talents. Inflation (%) FDI (US$, million) million)

► Unusual Destinations: According to Pacific World (a Global Destination and Event United States 2.60 161,475 21,751,736 Management company in over 38 countries), today’s MICE travelers increasingly want to visit remote places or to experience known destinations in new ways. In Scotland, for Germany 1.16 90,452 4,401,426 example, groups can explore the countryside via new whiskey trails and in China, they can United Kingdom 1.09 23,229 3,162,537 experience a secluded Shaolin Temple near Luoyang. France 1.05 9,197 3,016,893

Spain 1.07 46,896 1,575,985

Business opportunities for global MICE companies Business outlook

► For the global MICE players, the trends above provides them with opportunities for expansion. ► Based on the macro economic indices for these countries as well as the international The players also work together in order to enhance the business. An example of such opportunity occurences, the outlook for global players seems optimistic. However, one of the is provided by Worldwide Events, a program for hotels seeking to increase their share in the MICE greatest challenges that global MICE players will face will be retaining their share in market. The program targets those hotels for whom MICE is an important business segment and an increasingly competitive market place. An understanding of the drivers of MICE have the capacity to handle a wide variety of MICE opportunities. consumers and how to attract them in future will be a key winning factor. ► Additional benefits also include extended sales support, access to world events season launches, world events showcases and MICE trade shows.

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3 International overview 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Contribution of travel & tourism to GDP and employment 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Contribution of travel & tourism to GDP Contribution of travel & tourism to GDP

US Toursim UK Tourism

5 6

4 4 % % 3 2

2 0 2005 2010 2015 2020 2025 2030 2005 2010 2015 2020 2025 2030

Source: WTTC 2017 GDP EMPLOYMENT GDP Employment Source: WTTC 2017

Contribution of travel & tourism to GDP Contribution of travel & tourism to GDP

Spain Tourism France Toursim

6.0 5 5.0 4 % 3

4.0 % 2 3.0 1 2005 2010 2015 2020 2025 2030 2005 2010 2015 2020 2025 2030 Source: WTTC 2017 GDP Employment GDP Employment Source: WTTC 2017

Contribution of travel & tourism to GDP

Over the historical period under review, the contribution of travel and Germany Tourism tourism to GDP and employment in USA, UK, Spain, Germany and France 9 have trended in the same direction as they appeared in the various charts above. 7 In France however, the contribution of travel and tourism to employment % 5 dipped in 2013 as a result of the increase in unemployment rates generally 3 in the country which has since corrected over time. The dipped in 2005 2010 2015 2020 2025 2030 employment had no impact in the contribution of tourism to GDP.

GDP Employment Source: WTTC 2017 Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 17 of 64 15 May 2018 | Version 1.0 4 Nigerian overview

In this section Page

In 2016, MICE contributed about 0.9% to Nigeria’s GDP while creating about 1.3 milli ... 20

In Nigeria, the MICE sector is evolving and is officially categorized under a broader ... 21

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4 Nigerian overview 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Macroeconomic overview of Nigeria 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Country profile Population as at 2017e Chart 2.1: GDP (2017e US$ billions) Nigeria is principally an oil based economy, income from the sale of crude oil constitutes about 75% of budgetary revenues and close to 90% of exports. The Nigeria 366 country is the second largest crude oil exporter in Africa, with the largest natural gas 192m reserves of 5,173 bcm on the African continent. South Africa 347 Oxford Economics, 2017 Nigeria witnessed robust economic growth with an annual average rate of 7% between 2005-2014 owing to favourable oil price and economic reforms embarked Angola 132 on by successive governments since the return to democratic rule in 1999. GDP per capita – 2017e However, the growth witnessed in the past decade has been negatively impacted by Kenya 77 the decline in government revenues arising from dwindling crude oil prices since the second half of 2014, pipeline vandalism and security threats posed by terrorism. This $1,912 Ethiopia 75 has put pressure on the country’s external reserves, consequently resulting in the depreciation of the Naira and the hike in inflation rate. Oxford Economics, 2017

Ghana 47 The Nigerian economy plunged into its first recession in 30 years after recording negative growth in each of the four quarters of 2016. However, NBS figures show that the economy rebounded in 2017 with growth rates of (0.91%), 0.7% and 1.4% in Nominal GDP – 2017e Cameroon 34 Q1, Q2 and Q3 2016 respectively. Nigeria's inflation rate averaged 10.0% over the last 10 years to 2016. However, Source: Oxford Economics, 2017 since 2016 inflation has consistently increased, peaking at 18.7% in January 2017. $366b As at March 2018, the inflation rate had declined moderately to 13.3%. The decline Oxford Economics, 2017 Table 2.1: Macroeconomic results (historical) has been primarily driven by the CBN expansionary monetary policies aimed at bridging shortfalls in the foreign exchange market. Indicator 2015A 2016A 2017E Table 2.1: Macroeconomic indicators Nominal GDP, US$b 495 406 366 Table 2.2: Macroeconomic outlook Macroeconomic outlook Real GDP growth, % yoy 2.8% -1.5% 0.8% Indicator 2018F 2019F 2020F The Nigerian economy is expected to rebound moderately over the next 3 years to Nominal GDP per capita, US$ 2,714 2,144 1,912 2020 as the Federal Government ensures implementation of its Economic Recovery Nominal GDP, US$b 387 416 436 and Growth Plan (ERGP) by supporting agricultural independence, energy Inflation, CPI % yoy Real GDP growth, % yoy 2.6% 3.2% 4.3% 9 16 16 sufficiency and infrastructural development. The primary objective of the ERGP is Interest rate (MPR) % 11 14 14 the diversification of the economy, with less reliance on crude oil trade. Nominal GDP per capita, US$ 1,966 2,058 2,116

Foreign reserves (US’b) 28.3 27 35 In addition, stability in crude oil prices, expected from the continuous implementation Inflation, CPI % yoy 13 12 11 of production cut agreements reached by OPEC members is expected to boost Average exchange rate: Interest rate (MPR) % 13.5 13.3 12 192 256 314 government revenue and alleviate public investment cuts. NGN/US$ Foreign reserves (US’b) 32..1 35 48 Also, the ability of the Federal Government to sustain the relative peace in the oil Source: Oxford Economics, 2017; CBN; World Bank, NBS rich Niger Delta region is expected to increase oil production thereby boosting Average exchange rate: 390 430 425 government revenues over the near to medium term. NGN/US$ Source: Oxford Economics, 2017; CBN; World Bank

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4 Nigerian overview 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... In 2016, MICE contributed about 0.9% to Nigeria’s GDP while creating 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment about 1.3 million jobs 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

General overview

Africa is currently the worldwide focus for business with many African countries listed among the fastest growing economies in the World. Given this economic boom in Africa, the interest of the World on Africa keep increasing as a destination for business travels, thereby opening up tremendous opportunities for the MICE industry. In Nigeria, the MICE sector is evolving and is officially categorized under a broader Hospitality and Tourism industry, just like in other part of the developed World. This industry is important and has come to the attention of government because it contributes to the growth of the economy by providing employment opportunities.

Global trends impacting the performance of the market segment in Nigeria

► The global MICE trends has not significantly impacted the activities of local MICE industry in the past but will potentially grow the industry in the near future. Despite this, some of the Operators in Nigeria are hosting international events.

► Calabar international convention centre has outlined plans and is entering into partnerships with foreign players to host international events. Also, the National Association of Tour Operators (NATOP), one of the core drivers of the domestic tourism sector, recently initiated an awareness compaign aimed at promoting new services and destination vistas in Nigeria. This initiative has been able to create awareness about the domestic relevance of tourism, its importance to the economic growth of the people and country and has attracted the interest of young operators within the local MICE sector.

► An analysis of the 2017 tourism year would also show how remarkable tourism trends were introduced by the private sector to boost promotion, marketing and tourists arrivals to domestic destination. In that year, MICE took a leading role, with organizers of Akwaaba African Travel Market, Bantaba, Accra Weizo introducing a MICE and hotel show in Abuja tagged JABAMAH. The shows, in addition to opening up new vistas of opportunities for stakeholders, also educated participants on the latest trends of sustaining the travel & tour business through attendee experience.

► The organizers of JABAMAH, who used the Abuja event to organize an experience tour of Kaduna famous Kajuru Castle, also thrilled participants to an Abuja-Kaduna-Abuja return train tour. These are indicators that global MICE trends are creating opportunities for local operators and influencing the development of new product and service options.

Factors driving geographic distribution of MICE market in Nigeria

The factors listed above drive the geographic distribution of MICE. 4.5 Geographically in Nigeria, Lagos state has the highest concentration of 14.4 MICE activities this is because of the intense presence of the above listed Acess to market factors.

23.6 57.5 Access to suppliers

Existence of related business clusters

other reasons

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4 Nigerian overview 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... In Nigeria, the MICE sector is evolving and is officially categorized under a 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment broader Hospitality and Tourism industry 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Direct contribution of travel & tourism to GDP The Travel & Tourism Economic Impact Report(2017) defines the direct contribution of Travel & Tourism to GDP as a reflection of the ‘internal’ spending on Travel & Tourism, as well as government 'individual' spending. The direct contribution of Travel & Tourism to GDP is calculated from total internal spending by ‘netting out’ the purchases made by the different tourism sectors. This measure is consistent with the definition of Tourism GDP, specified in the 2008 Tourism Satellite Account. The total contribution of Travel & Tourism includes its ‘wider impacts’ (i.e. the indirect and induced impacts) on the economy. The indirect contribution includes the GDP and jobs supported by: ► Travel & Tourism investment spending – an important aspect of both current and future activity that includes investment activity such as the purchase of new aircraft and construction of new hotels;

► Government 'collective' spending, which helps Travel & Tourism activity in many different ways as it is made on behalf of the ‘community at large’ – e.g. tourism marketing and promotion, aviation, administration, security services, resort area security services, resort area sanitation services, etc.;

► Domestic purchases of goods and services by the sectors dealing directly with tourists – including, for example, purchases of food in the hotels and catering services by airlines, and IT services by travel agents. The estimated direct contribution of Travel & Tourism to GDP in 2017 was NGN1,752bn (1.7% of GDP). This is forecast to grow by 3.6% to NGN1,815bn in 2018. This primarily reflects the economic activity generated by industries such as hotels, travel agents, MICE, airlines and other passenger transportation services (excluding commuter services). Travel & Tourism as a whole generated 2.6m jobs directly in 2017 (1.6% of total employment) and this is forecast to grow by 3.4% in 2018 to 2.7m (1.6% of total employment). This includes employment by hotels, travel agents, MICE, airlines and other passenger transportation services (excluding commuter services).

Contribution of travel & tourism to GDP Contribution of travel & tourism to Employment 3.0 2.5 3,000 4,500 t n 4,000 e P m N

2.5 y 2,500 D 2.0 o B l

G 3,500 N p y G m

2,000 m 2.0 3,000 s e N o b

y 1.5 n 6 o 2,500 o 1 J m c 0

1,500 o

1.5 0 e 2 n

0 2,000 t o e 0 l n ' c 1.0 o a e

t 1,000 1,500 h

s 1.0 e w l n f o

o 1,000 o h

C 500 0.5 0.5 w %

500 f 0 0 o % 0.0 7 8 9 0 1 2 3 4 5 6 7 7 0.0 7 8 9 0 1 2 3 4 5 6 7 7 0 0 0 1 1 1 1 1 1 1 1 2 0 0 0 1 1 1 1 1 1 1 1 2 7 8 9 0 1 2 3 4 5 6 7 7 7 8 9 0 1 2 3 4 5 6 7 7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 2 0 0 0 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

MICE distribution throughout Nigeria in terms of GDP MICE distribution throughout Nigeria in terms of employment

MICE Distribution in terms of GDP MICE Distribution in terms of employment Regions (N’m 2016) Regions (2016)

South-West 230,289 South-West 249,275

South-South 217,742 South-South 223,398

South-East 107,504 South-East 148,052

North-West 128,475 North-West 323,587

North-East 65,406 North-East 171,461

North-Central 119,723 North-Central 183,158

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Opportunities and risk factors SOME OF NIGERIA’s TOURIST CENTRES / FESTIVALS & CARNIVALS OPPORTUNITIES

§ Opportunity to explore possible partnership opportunities with global players, to offer the local and cultural content which global attendees presently crave state of infrastructure especially in the area of event planning and event centres.

• Taking advantage of the N300 million MoU signed with the Bank of Industry and Riyom rock formation National Council for Arts and Culture (NCAC) as this is intended to serve as a Gurara waterfalls Ikogosi warm springs Mambilla Plateau catalyst for the development of Nigeria’s rich craft industries and which also creates a financial window for operators, to access funds for capacity building.

• Exploration of Nigeria’s rich cultural heritage and historical infrastructure, such as the Gurara Water Falls, Ikogosi and Wikki warm springs, Mambilla Plateau, Riyom rock formation, Idanre Hills, Zuma Rock, Olumo Rock, Ikom Water Falls,Ikeja water parks, Snake Island, Ibadan Amusement Centre, Abuja parks Olumo Rock and Amusement, Elegushi beach, Obudu Cattle Ranch,, Yankari, New Bussa Idanre Hills Zuma Rock Ikom Water Falls and Bauchi Game Reserves. Plateau Gardens and Monuments, Kano and Ibadan zoo’s, Cross river boat and fishing regatta, Argungu fishing festival, Atilogu Dancers, kuntigi and kalangu local guitarists, Yam festival, Gale and GboyaNupeTraditon, Eyo masquerades, Ekwechi Festival in Ebira Bronze Statutes from Benin, local fan and hat from Northern Nigeria, local cloth dyers from China etc. Dambe and Langa Traditional from Northern Nigeria. Snake island Obudu Cattle Ranch Elegushi beach Ibadan Amusement

RISK

§ Lack of political will to drive MICE industry growth by government, despite the current administration’s description of the sector as a low hanging fruit, capable of changing Nigeria’s economic story, and as a source of alternative revenue to that derived from the dwindling value of oil in the global market. Cross river boat and Yankari Plateau Gardens Eyo masquerades fishing regatta and Monuments § Poor state of infrastructure in the country. This is a significant risk in Nigeria. The infrastructure situation is characterized by roads in bad shape, inadequate and in some cases absence of portable water, erratic power supply, poor communication networks. The enabling structures required to support MICE are non- existence, which will not augur well for the MICE industry.

§ Political instability, conflicts and insecurity will creates disincentives for Afrika shrine potential MICE players interested in Nigeria. Lekki conservation Takwa bay National theater centre

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In this section Page

The estimated market size for MICE in Nigeria is N869b and Lagos state is the large ... 24

Historical demand and supply between 2013 - 2017 25

Forecast demand and supply 2018 - 2022 26

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5 Market sizing and growth forecast 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... The estimated market size for MICE in Nigeria is N869b and Lagos state is 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment the largest contributor 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Historical market demand 2017 MICE market demand by region

In 2016, the contribution of travel and tourism to GDP was NGN1,738b, which equated about Meetings/Conferences (Nm) Unit 1.7% of GDP. The historical market demand of tourism was determined based on the assumptions below: South-West 174,150 235,276

5 years historical market demand (2013 - 2017) South-South 164,662 222,457

Assumptions: South-East 81,297 109,831 ► Travel & tourism sector’s overall direct contribution of 1.7% to national GDP in 2016, provides an indication of each state’s travel & tourism’s value in relation to state’s GDP North-West 97,156 131,257

► MICE constitutes 50% of the travel & tourism’s contribution to national GDP. North-East ** 49,462 66,822

► Meetings, conferences & exhibitions (MCE) together constitute 75% of the MICE sector, North-Central 90,538 122,315 while incentive travel averages 25% (Travel & Tourism Economic Impact Report - 2017) Total 657,265 887,959 ► Average cost of each meeting, conference, occasion or exhibition hosted by companies or middle class families is N2.8m (primary research findings, 2017) Incentive travel (Nm) Unit ► Average cost of overseas incentive travel for deserving staff is N450k (primary research findings, 2017) South-West 58,050 129,000

MICE market demand by region (2017 estimates) South-South 54,887 121,972 South-East 27,099 60,220 ► The MICE designation covers entities competing in the following segments: Agriculture & Food Events; Building & Household Events; Corporate Events; Educational Events; Fashion North-West 32,385 71,967 Events; Trade Fairs & Shows; Carnivals & Parades; Health Care Events; Product Launches; Sports Events; Seminars; Private Events; Music Events; Training Events; Festivals; North-East ** 16,487 36,638 Exhibitions; Movies & Cinemas; Industrial Events; Technology Events; Pageant & Beauty Contest. North-Central 30,179 67,065 Distribution of key MICE customers in Nigerian and among the four focused states Total 219,088 486,863

Other ** The North-East has been plagued by insecurities over the last few years. States like Kano states Borno and Adamawa have faced this particular challenge to the largest extent amongst the 79% Calabar 11% 3% North-Eastern states. This has seen a fluctuation in the number of meetings recorded Calabar compared to the other parts of the country. Abuja 11% 3% Also, of the 6 states in the region, only the 2 earlier mentioned states are majorly affected Lagos by the insecurities faced in the region. Kano 47% 4% Nevertheless, several meetings have been held in the other North Eastern states such as the stakeholder meeting on the state of education in the North-East organized by The Lagos Centre for Information Technology & Development (CITD) with support from United States 11% Abuja Agency for International Development (USAID), held in Gombe State. 31%

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5 Market sizing and growth forecast 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Historical demand and supply between 2013 - 2017 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

5 year historical MICE market demand by sub-category

Market Demand - Historical Market Supply - Historical

Sub-category Sub-category

MICE Value N'm 2017 2016 2015 2014 2013 MICE Value N'm Multiplier 2017 2016 2015 2014 2013

Event Planning 92,017 91,260 92,762 90,368 85,004 Event Planning 1 92,017 91,260 92,762 90,368 85,004

Event Centre 164,316 162,964 165,647 161,371 151,793 Event Centre 2 328,632 325,927 331,294 322,742 303,585

Incentive Travel 219,088 217,285 220,863 215,161 202,390 Incentive Travel 3 657,265 651,855 662,588 645,483 607,171

Catering & Drinks 144,598 143,408 145,769 142,006 133,578 Catering & Drinks 2 289,197 286,816 291,539 284,013 267,155

Entertainment 105,162 104,297 106,014 103,277 97,147 Entertainment 2 210,325 208,593 212,028 206,555 194,295

Rentals 151,171 149,927 152,395 148,461 139,649 Rentals 2 302,342 299,853 304,791 296,922 279,299

Total 876,353 869,139 883,451 860,644 809,561 Total 1,879,778 1,864,304 1,895,003 1,846,082 1,736,508

MICE Units 2017 2016 2015 2014 2013 MICE Units Multiplier 2017 2016 2015 2014 2013

Event Planning 70,102 69,525 70,670 68,845 64,759 Event Planning 1 70,102 69,525 70,670 68,845 64,759

Event Centre 233,673 231,750 235,566 229,485 215,864 Event Centre 2 467,347 463,500 471,132 458,969 431,727

Incentive Travel 486,863 482,855 490,806 478,136 449,756 Incentive Travel 3 1,460,589 1,448,566 1,472,419 1,434,407 1,349,268

Catering & Drinks 233,673 231,750 235,566 229,485 215,864 Catering & Drinks 2 467,347 463,500 471,132 458,969 431,727

Entertainment 233,673 231,750 235,566 229,485 215,864 Entertainment 2 467,347 463,500 471,132 458,969 431,727

Rentals 116,837 115,875 117,783 114,742 107,932 Rentals 2 233,673 231,750 235,566 229,485 215,864

The tables above shows that the major categories of consumption are: ► Event Centre's

► Catering/drinks

► Entertainment & rentals. Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 25 of 64 15 May 2018 | Version 1.0

5 Market sizing and growth forecast 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Forecast demand and supply 2018 - 2022 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

5 year projections of MICE market demand using 2016 estimates Travel & Tourism Economic Impact Report (2017) predicts that the sector is expected to grow by 1.1% in 2017 and by another 3.6% per annum from 2018-2027. Using these estimates, the growth potential of the MICE industry can be estimated as detailed below. Also, Macroeconomic trends that can however hinder growth forecast include constraints in access to finance, high interest rates, poor policy formulation, multiple taxation by the various tiers of government that has significantly increased operational costs, weak infrastructure, crime and corruption, high import duties, tariffs and exchange rates amongst others.

Market Demand - Forecast Market Supply- Forecast MICE Value N'm 2017 2018 2019 2020 2021 2022 MICE Value N'm 2017 2018 2019 2020 2021 2022

Events 92,017 95,330 98,762 102,317 106,000 109,816 Event Planning 92,017 95,330 98,762 102,317 106,000 109,816

Event Centre 164,316 170,232 176,360 182,709 189,286 196,101 Event Centre 328,632 340,463 352,720 365,418 378,573 392,202

Incentive 219,088 226,975 235,147 243,612 252,382 261,468 Incentive Travel 657,265 680,926 705,440 730,836 757,146 784,403

Catering 144,598 149,804 155,197 160,784 166,572 172,569 Catering & Drinks 289,197 299,608 310,394 321,568 333,144 345,137

Entertainment 105,162 108,948 112,870 116,934 121,143 125,504 Entertainment 210,325 217,896 225,741 233,867 242,287 251,009

Rentals 151,171 156,613 162,251 168,092 174,144 180,413 Rentals 302,342 313,226 324,502 336,184 348,287 360,825

Total 876,353 907,902 940,586 974,448 1,009,528 1,045,871 Total 1,879,778 1,947,450 2,017,558 2,090,190 2,165,437 2,243,393

MICE Units 2017 2018 2019 2020 2021 2022 MICE Units 2017 2018 2019 2020 2021 2022

Event Event 70,102 72,626 75,240 77,949 80,755 83,662 70,102 72,626 75,240 77,949 80,755 83,662

Event Centre Event Centre 233,673 242,086 250,801 259,830 269,183 278,874 467,347 484,171 501,602 519,659 538,367 557,748

Incentive Incentive 486,863 504,390 522,548 541,360 560,849 581,039 1,460,589 1,513,170 1,567,644 1,624,079 1,682,546 1,743,118

Catering Catering 233,673 242,086 250,801 259,830 269,183 278,874 467,347 484,171 501,602 519,659 538,367 557,748

Entertainment Entertainment 233,673 242,086 250,801 259,830 269,183 278,874 467,347 484,171 501,602 519,659 538,367 557,748

Rentals Rentals 116,837 121,043 125,400 129,915 134,592 139,437 233,673 242,086 250,801 259,830 269,183 278,874

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In this section Page

Overall, the MICE market is largely dominated by the South-West and the South-South 28

Value chain – Local/foreign addition 29

Event Centre operators have the highest margin among the value chain players 30

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6 Value chain 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Overall, the MICE market is largely dominated by the South-West and the 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment South-South 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

General overview MICE geographical distribution showing top 10 states MICE value chain in Nigeria has large and small players in each of the sub segments. These providers offer venues for meetings/conferences and events, and there are planners who act as intermediary between the service providers and users of these services. For companies using incentives to reward employees for exemplary performance, they engage travel agencies/tour operators to arrange and implement such packages. Presently, travel agencies and tour operators dominate the incentive travel niche, offering services traditionally offered by incentive travel Kano houses and destination marketing companies. Other incentives include gift vouchers for shopping etc. The structure of the MICE industry is captured below:

MICE value chain structure FCT Oyo

Meetings Conference/ Events Exhibition Incentives Ogun Lagos – 11% Edo Lagos Rivers – 7% Delta – 6% Imo – 5% Delta Imo Music/DJ MC Venues/Halls Oyo – 5% Edo – 4% Travel Arrangement RiversAkwa- Abuja – 4% Stationery/IVS Confectioners Ibom Akwa Ibom – 4% Kano – 4% Fabrics Ogun – 4% Flower/decor Direct access via website ► The chart above shows the top 10 states with the largest MICE activities. These 10 states account for about 54% of the total MICE market in Nigeria Caterers Drinks ► Overall, the MICE market is largely dominated by the South-West and the South- South Photography Web designers Tour operator

Rentals Hair/make up

Bridal wears Souvenirs Travel agency

Event planner Entertainment

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6 Value chain 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Value chain – Local/foreign addition 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Value chain structure: Local vs Imported Trends in the Nigerian MICE industry, majorly revolves round the event management stage of the value chain, The interrelationships between event planners and other value chain players (Local Vs International) are captured below:

Sub-Categories Local value addition Foreign value addition

• Ushers • Imported decoration items, stationery, invitation cards etc. • Training of ushers, hosts and hostesses • Signage • Provision of backdrops, flower vases etc. • Online/social media • Web designers Events Planning • Hair and makeup • Local stationery • Event branding • Publicity/media items & relations • Post-event surveys and publicity • Catering and local drinks • Foreign wines, spirits and drinks • Cooks/Servers • Expatriate chefs Catering/Drinks • Confectioners • Drinks/cocktails • Equipment operators • Decoration lights and other materials • Facility managers • Photographic equipment Event Centers • Technicians and other personnel • Audio-video equipment • Security staff • Locally produced gift items such as bags, washing soap etc. • Imported promo and gift items, plaques etc. • Delivery to door steps Incentives • Training of gift wrappers

• Importation of turn-tables, speakers, microphones and audio-visual • Face painting equipment Entertainment • Live band • Alaga-Iduro / MC

• Construction/fabrication of stages, gas burners, cold chests etc. • Imported canopies • Local fabrication of tents and canopies • Kitchen wares/plates & dishes, cutleries etc. Rentals • Construction of delivery carts • Delivery vehicles • Local chair fabrics • Foreign chair fabrics

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6 Value chain 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Event Centre operators have the highest margin among the value chain 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment players 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Distribution environment and effects on regional trade Factors limiting potential of the MICE industry

• Distribution channels in MICE typically describe the long list of people and institutions necessary to deliver services to consumers. These include the meeting/event planners, event centers, entertainment providers, incentive houses, destination marketing companies and hoteliers amongst others. 35% • There are however some distribution channels that can be considered as ‘major’ in terms of Non Specialization Among Value Chain their ability to intermediate across a wide variety of stakeholders. Infrastructural Changes

Cost-revenue analysis at each stage of the value chain in Nigeria Import retriction Unfavourable Government Policies 100% 3.5 7.5 7 8 12 2 10 High Exchange Rate 90% 6 10 35% 12% Market Demolitions 2 5 7 3 15 Economic Stagnation 80% 5 15 5 35 6% 5 Access to Finance 70% 5 4% 1% 4% 2% Others 8 10 1% 60% 10 5 50% 66.5 15 25 50 40% 12 45 Effect of future market conditions on the value chain player's margin in Nigeria 15 5 30% 5 5 ► It is expected that with positive market conditions, margins of value chain players will ultimately be increased and vice-versa. 20% ► The MICE industry is evolving and there are significant efforts being made to standardize 28 25 25 10% 18 the services provided, build capacities and improve synergies between players. Efforts are 14 15 also being made to improve MICE and other support infrastructure. All of these should 0% reduce the inefficiencies observed along the chain, and significantly improve the margins of Event Planning Catering/ Drinks Event Centres Incentive Travel Entertainment Rentals value chain players over the next 5 years. Gross margin Inputs/equipment Electricity (incl. generator) Staff costs ► However, the impact of foreign exchange fluctuations, as well as, inflationary pressures Taxes Security Equipment transport Equipment maintenance may negatively impact operators in this segment, particularly operators who depend on importation of some of the materials required to render their service. Source: Survey research, 2017

The gross margins of event centre operators (28%) are the highest among the sub- categories, while players in the event planning sub-category make the lowest margins (14%).

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In this section Page

Nigeria MICE market is a perfect market and highly fragmented 32

Market share - Event planners 33

Market share - Event centers 34

Market share - Incentives 35

Market share - Catering 36

Market share - Entertainment 37

Market share - Rentals 38

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7 Competitive landscape 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Nigeria MICE market is a perfect market and highly fragmented 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

MICE industry competitive landscape The market is generally considered fragmented, however, in the event centre sub-category, top 5 players (Eko hotel, Landmark event centre, Federal palace hotel, Oriental hotel and Intercontinental hotel) are considered a cartel. A significant proportion of players in this sector operate informally (including many of the registered players). Primary research findings suggest that about 36% of players are not formally registered, while 40% operate with registration of business names. The MICE competitive landscape cuts across event planning, event centres, incentives, catering & drinks, entertainment and rentals. It also includes activities that directly or indirectly impact these sub categories. Future market conditions will also positively impact the industry, particularly the recent move by the Nigerian Bureau of Statistics, to use a ‘Tourism Satellite Account framework’ to ensure a more robust and realistic aggregation of tourism statistics in Nigeria. This framework, recommended by the World Tourism Organization and adopted in 2015 by the NBS, links all tourism & travel statistics in the country with the national accounts framework before the nation’s Gross Domestic Product is calculated. Monopolies, informal & hidden rules along the value chain As stated above, the MICE market is fragmented and highly competitive. However, some level of concentration exist at certain segments of the market. An example is the event planning sub segment in Lagos, which has over 100 players, but the top 10 players control about 40% of the market. Zapphire Event, 2706Events and Bisola Trendy bee Events together covers 58% of the 40% of market share held by the top 10 operators. Another example in the Lagos MICE market is the event centre sub category where Eko Hotel & Suites, Federal Palace Hotel, Oriental Hotel and Landmark event centres control approximately 45% of the market. These players have significant influence in the market in terms of setting standards of quality and on price. Generally, the industry players’ promotions and advertisement to gain customer loyalties and increase market share. They also use price, locations, quality of services and equipment as a differentiating factor. Despite this competition level, the hidden rules in the industry does not permit any player to make disparaging comments about another competitor(s) in the public domain. In essence, competition in the Nigeria MICE market is a healthy one and has positive impact of improving opportunity for collaboration among the operators, which in turn improves the delivery of services to the customers.

Assumptions for market players In determining the top players in each sub-category as well as their market shares, we have used the following:

► Conducted interviews with stakeholders

► Sourced for information available via secondary platforms

► Estimated a percentage for which top 10 players account for in the total market via our research findings

► Determined and apportioned weights of top 10 players based on interviews and surveys carried out.

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Top 10 players in the market segment

LAGOS Lagos ABUJAAbuja Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Zapphire Event 360,961,676 12.80% AAA Events and Design 129,061,430 14.40% 2706Events 157,920,733 5.60% D Manager Event 56,464,376 2.00% BisolaTrendybee Events 135,360,629 4.80% Geo Event Planner 48,398,036 1.72% IPC Events 124,080,576 4.40% Party Master 44,364,867 1.57% 3003events 90,240,419 3.20% Blu Boom Events 32,265,357 1.14% Ball Events Concepts 78,960,367 2.80% C J Events Mananagemnet 28,232,188 1.00% Magna Events 67,680,314 2.40% Jb2k Events 24,199,018 0.86% Elizabeth R Events 56,400,262 2.00% Rariora Events 20,165,848 0.72% June5ive Events 33,840,157 1.20% Dominion Events Limited 12,099,509 0.43% Signature Events 22,560,105 0.80% Hi Quest Solutions 8,066,339 0.29%

CALABAR KANOKano Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Harira Event Planners 66,412,276 8.54% Sme Events 124,486,175 16.00% Almeer Event Planners 29,055,371 3.73% Top Notch Ict Media Consult 54,462,701 7.00% Eliel Event Planners 24,904,603 3.20% Jeromian Innovative Point 46,682,315 6.00% Haadaz Event Planners 22,829,220 2.93% Uwayen S Events Bridal 42,792,122 5.50% Hanameel Event Planners 16,603,069 2.13% Zeaalous Minds 31,121,544 4.00% Logas Event Planners 14,527,685 1.87% 520kolanutcentre 27,231,351 3.50% Masik Event Planners 12,452,302 1.60% Multitainment Nigeria 23,341,158 3.00% Mayor Event Planners 10,376,918 1.33% Palm Craft Resources 19,450,965 2.50% Mirriya Event Planners 6,226,151 0.80% Me Make Over And Events 11,670,579 1.50% Muna Event Planners 4,150,767 0.53% Centright Decorations Events 7,780,386 1.00% Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 33 of 64 15 May 2018 | Version 1.0

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Top 10 players in the market segment

LAGOS Lagos ABUJAAbuja Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Eko Hotel & Suites 1,208,577,042 7.20% Abuja International conf. Center 512,148,532 9.60% Landmark Events Centre 1,057,504,911 6.30% Sheraton hotel 448,129,965 8.40% Federal Palace Hotel 981,968,846 5.85% Transcorp Hilton 416,120,682 7.80% Oriental Hotel 906,432,781 5.40% Shehu Musa Yar'adua Center, Abuja 384,111,399 7.20% Intercontinental Hotel 830,896,716 4.95% Nicon luxury conference 352,102,115 6.60% Four Points by Sheraton 755,360,651 4.50% Bahamas event centre 320,092,832 6.00% LCCI Conference Centre 679,824,586 4.05% Gracious hotel banquet hall 288,083,549 5.40% Civic Centre 453,216,391 2.70% Whitewalls tents & events 192,055,699 3.60% Victoria Crown Hotel 377,680,325 2.25% Citilodge hotel conference 160,046,416 3.00% Anchor Events Place 302,144,260 1.80% Agura hotel 128,037,133 2.40%

CALABAR KANOKano Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Bristow palace hotel 592,966,746 9.60% Calabar International Convention 444,593,480 9.60% Meena events centre 518,845,903 8.40% Kolanut conference and event centre 389,019,295 8.40% AB Event Centre 481,785,481 7.80% Mary Ekpiken conference center 361,232,203 7.80% Tahir guest palace & conference 444,725,059 7.20% Transcorp metropolitan hotel 333,445,110 7.20% Nimah guest palace 407,664,638 6.60% Monty suite event hall 305,658,018 6.60% Grand central hoel & conference 370,604,216 6.00% Orange resort 277,870,925 6.00% Burj Al-Kano hotel 333,543,795 5.40% Calabar Grand Hotel Hall 250,083,833 5.40% The prince hotel & conference 222,362,530 3.60% Calabar harbour resort hall 166,722,555 3.60% Zerephat International hotel 185,302,108 3.00% Dannic Hotels King David Hall 138,935,463 3.00% Zainab Celebration services 148,241,686 2.40% Mary hall gomays plaza hotels 111,148,370 2.40% Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 34 of 64 15 May 2018 | Version 1.0

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Top 10 players in the market segment

LAGOS Lagos ABUJAAbuja Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Tour Brokers Int (TBI) Nig 716,193,802 3.20% Cgsk Tours 204,859,413 2.88% Zenith Travels & Tours Ltd 626,669,577 2.80% Diani Wilderness Tours 179,251,986 2.52% Mayfair Travel Nig Ltd 581,907,464 2.60% Essential Travels And Tour Ltd 166,448,273 2.34% Travelstart 537,145,352 2.40% Diplomat Travels & Tourism Agency 153,644,559 2.16% Bespoke Vacations 492,383,239 2.20% Jolie Global Travels & Tours Ltd 140,840,846 1.98% Gadeshire Travels & Tours Ltd 447,621,127 2.00% E-Travels & Tours Ltd 128,037,133 1.80% God’s Power Travel 402,859,014 1.80% Leisure Afrique 115,233,420 1.62% Aeroport Travels & Tours Ltd 268,572,676 1.20% World Link Travels Centre 76,822,280 1.08% Wakanow Nig. Ltd 223,810,563 1.00% Batijay Travels Ltd 64,018,566 0.90% Dip Tour Ltd 179,048,451 0.80% Beulah Land Travel And Tours Ltd 51,214,853 0.72%

CALABAR KANOKano Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Altirhal Global Links Travel And Tours 65,885,194 0.80% Angel Touch Travel And Tours Ltd 148,197,827 2.40% Koki Travel And Tours 57,649,545 0.70% Ekun Tourism Services Ltd 129,673,098 2.10% Karayefunpark 53,531,720 0.65% Remlords Tours 120,410,734 1.95% Belas Travel And Tours Limited 49,413,895 0.60% Wonder World Travels And Tours 111,148,370 1.80% M Seven Travels And Tour Limited 45,296,071 0.55% Skytrip Services Ltd 101,886,006 1.65% Tic Travels And Tours Limited 41,178,246 0.50% Angel Touch Travel And Tours Ltd 92,623,642 1.50% Al Fathia Travel And Tours 37,060,422 0.45% Kez & Honours Ltd 83,361,278 1.35% Al Bukhari Travel And Tours 24,706,948 0.30% Skytrip Services Ltd 55,574,185 0.90% Alhajasu Tours And Travels Limited 20,589,123 0.25% Alvasta Tourism 46,311,821 0.75% Silvergate Travels Limited 16,471,298 0.20% Jimen Travels & Tours Limited 37,049,457 0.60% Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 35 of 64 15 May 2018 | Version 1.0

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Top 10 players in the market segment

LAGOS Lagos ABUJAAbuja Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Astoria Catering Services 2,206,577,190 6.40% Gods Favour Catering Services 484,075,205 4.80% Bollass Catering Services 1,930,755,041 5.60% Blitz Choice Bar And Catering Services 423,565,804 4.20% Choppy Catering & Management 1,792,843,967 5.20% Baby J Catering Services 393,311,104 3.90% Chucason Catering Services 1,654,932,892 4.80% Cha S Catering Services 363,056,403 3.60% Dominion Catering 1,517,021,818 4.40% Zeena S Meal And Finger Foods 332,801,703 3.30% Oriental Catering Services 1,379,110,744 4.00% Eventsplanet4u 302,547,003 3.00% Saint Pennylisdom Catering 1,241,199,669 3.60% 4everyrefreshment 272,292,303 2.70% Mascot Catering Services 827,466,446 2.40% Light Catering Service 181,528,202 1.80% Her Excellency Catering Serives 689,555,372 2.00% Jamel Catering Training & Services 151,273,501 1.50% Foresight Catering Services 551,644,297 1.60% Ayonora Services 121,018,801 1.20%

CALABAR KANOKano Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Eliel Catering Services 402,631,741 4.00% Daking Cakes And Catering Services 391,242,263 4.80% Hanameel Catering Services 352,302,773 3.50% Catering And Errand Services 342,336,980 4.20% Winner Catering Services 327,138,290 3.25% Maykas Catering Service 317,884,339 3.90% Hajia Amina Catering Services 301,973,806 3.00% Ennywealths Kitchen And Cakes 293,431,697 3.60% Mazy Event Planning And Catering 276,809,322 2.75% Jenny Catering Services 268,979,056 3.30% Harvesters Snacks And Catering 251,644,838 2.50% Pefanny Catering Services 244,526,414 3.00% Jayne S Delight 226,480,354 2.25% De Meg S Delight Intergratted 220,073,773 2.70% Sky Care Catering Services 150,986,903 1.50% Timmy Tasty 146,715,849 1.80% Fahad Restaurant & Catering Services 125,822,419 1.25% Amiable Event And Catering 122,263,207 1.50% Kingsbite Catering Services 100,657,935 1.00% Nejjeed Catering Services 97,810,566 1.20% Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 36 of 64 15 May 2018 | Version 1.0

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Top 10 players in the market segment

LAGOS Lagos ABUJAAbuja Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share DJ Xclusive 51,028,808 0.48% 432 Entertainment 19,461,644 0.57% DJ Spinall 45,657,355 0.43% Next motion 17,413,050 0.51% DJ Cuppy 37,600,175 0.35% Dj Ize Entertainment 14,340,159 0.42% DJ Jimmy Jatt 34,914,448 0.33% Streetwise Entertainment 13,315,862 0.39% DJ Neptune 26,857,268 0.25% prosper global villa 10,242,971 0.30% DJ Humility 21,485,814 0.20% DJ Charly Entertainment 8,194,377 0.24% DJ Sose 18,800,087 0.18% Hitwaves Records 7,170,079 0.21% DJ Lambo 13,428,634 0.13% Mo Hight 5,121,485 0.15% DJ Consequence 10,742,907 0.10% Gm Entertainment Talent 4,097,188 0.12% DJ Caise 8,057,180 0.08% Aima Events and Occasion 3,072,891 0.09%

CALABAR KANOKano Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Dj Richy Musical Production Limited 7,510,912 0.19% Mr Splendid World 11,263,035 0.38% Abba Sound Studio 6,720,290 0.17% Shining Star Movie Entertainment 10,077,452 0.34% Revelation Venture 5,534,356 0.14% Addicted To Praise 8,299,078 0.28% Yakasai Nigeria Limited 5,139,045 0.13% De Max Entertainment 7,706,287 0.26% Kumbo Productions 3,953,112 0.10% Dj Dfrnce Entertainment 5,927,913 0.20% Top Class Studio 3,162,489 0.08% Dj Home Passion Musical 4,742,330 0.16% Lafazee Entertainment 2,767,178 0.07% Great Mind Investment 4,149,539 0.14% Da Blaze Recon 1,976,556 0.05% Sound And Light Entertainment 2,963,957 0.10% Vocal Sound Studio 1,581,245 0.04% Zest Music Entertainment Company 2,371,165 0.08% Guarantee Multimedia Company 1,185,933 0.03% Space Bar 1,778,374 0.06% Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 37 of 64 15 May 2018 | Version 1.0

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Top 10 players in the market segment

LAGOS Lagos ABUJAAbuja Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Rentals Options Nigeria Ltd 111,189,088 4.80% KC Rentals 31,804,424 4.32% Rentals World 97,290,452 4.20% Big Joe Rentals 27,828,871 3.78% Partyneed Rentals 90,341,134 3.90% CCC Rentals 25,841,094 3.51% KFA Event And Rentals 83,391,816 3.60% Olowo Rentals 23,853,318 3.24% Geo Geo Rentals 76,442,498 3.30% Surich Rentals 21,865,541 2.97% Denny Rentals & Events 69,493,180 3.00% Ziva Rentals 19,877,765 2.70% Bankole Rentals 62,543,862 2.70% Shalom Party Rentals 17,889,988 2.43% Sifad Event Rentals 41,695,908 1.80% Geo-Events Limited 11,926,659 1.62% Ajetomobi Rentals 34,746,590 1.50% Amicale Rental Services 9,938,882 1.35% Choice Rentals 27,797,272 1.20% Just For Kids Party Rentals 7,951,106 1.08%

CALABAR KANOKano Name Est. Turnover (N) Market Share Name Est. Turnover (N) Market Share Abc Rentals 27,276,470 3.20% Akito Rentals 25,564,125 4.00% Fidna Rentals 23,866,912 2.80% Alexico Rentals 22,368,609 3.50% Marsa Rentals 22,162,132 2.60% Basel Rentals 20,770,852 3.25% Rita Rentals 20,457,353 2.40% Bellasima Rentals 19,173,094 3.00% Sancity Rentals 18,752,573 2.20% Elegant Rentals 17,575,336 2.75% Sky Rentals 17,047,794 2.00% G&A Rentals 15,977,578 2.50% Tariq Rentals 15,343,015 1.80% Imma Asi Rentals 14,379,820 2.25% Shamzy Rentals 10,228,676 1.20% Koksy Rentals 9,586,547 1.50% Kamal Rentals 8,523,897 1.00% Tata Rentals 7,988,789 1.25% U. Siraka Rentals & Decorations 6,819,118 0.80% TJ Rentals 6,391,031 1.00% Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 38 of 64 15 May 2018 | Version 1.0 8 Policy, legislation & case studies

In this section Page

Tax incentives offered to operators in MICE market in Nigeria 40

Legislation regulating business activities in other MICE market 42

Case studies 44

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8 Policy, legislation & case studies 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Tax incentives offered to operators in MICE market in Nigeria 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Tax incentives offered to MICE in Nigeria

Incentive for 25% of incomes derived from tourists by hotels in foreign reserve made currencies are exempted from tax provided such income are put out of profit for in a reserve fund to be utilized within five (5) years for expansion This incentive was introduced as part of the 1999 Fiscal Policy. It tourism or construction of new hotels or facilities used for development of Low Tax Treaty is applicable to investment income such as royalty, interest, rent development tourism. Concession Rate and dividend earned by Non-residents who are citizens of treaty of 7.5 percent for nations (i.e. countries having Double Taxation Agreements with foreign investors Nigeria) which are liable to withholding tax deduction at 7.5%. A from treaty rate of 10 percent is applicable to non-residents who are citizens Nations. of Non-Treaty nations. Foreign investors in the MICE industry from treaty nations can enjoy this

Schedule 2 to the CITA gives the details on this. MICE companies which incur qualifying capital expenditure in doing their business Accelerated are entitled to enjoy capital allowances. Unrelieved capital Capital allowances are allowed to be carried forward indefinitely. This is Allowance available to be enjoyed by both foreign and local investors in the Scheme MICE industry The applicable statute is Section 31 (2) of CITA 2004. The loss relief is subject to four (4) year carry forward limit. This is also Loss Relief available for all local and foreign MICE industry operators to enjoy

Repatriation of Section 101 Subsection 5 of CITA is the relevant provision on this. net earnings There is opportunity for foreign investors in the MICE industry and outside Nigeria other industries to repatriate their net earnings outside Nigeria by foreign immediately the tax obligation on the income has been fulfilled investors

These tax incentives have been in place well beyond a 5 year period and have not changed significantly from the time they were introduced.

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A comparison of these tax incentives, with that of other international MICE countries is the Federal Legislation regulating business activities in MICE industry focus of the table below • Business activities within the MICE sector in Nigeria are regulated under the broader tourism industry by the Nigerian Tourism Development Comparison Authority Act (1992) which mandates the Nigerian Tourism Development Tax incentives in Nigeria with other MICE Corporation (NTDC) to promote, develop and regulate tourism and countries hospitality in Nigeria.

US Germany UK Spain France • Until recently, there have been no amendments made to the 1992 NTDC Act to adequately reflect the current global trends and development in the • Investment Tax Credit on qualifying capital tourism industry. expenditure û û û û û • The proposed amendment provides the creation of Tourism Enterprises in • 25% of incomes derived from tourists by hotels all the States of the Federation, which will be accredited for the purposes in convertible currencies are exempted from tax of standardization, quality assurance, consumer protection and public ü û û û û health and safety. • Tax Treaty Concession for foreign investors from treaty Nations • The proposed amendment will also establish operating tour services in û û û û û Nigeria. • Loss relief • When eventually passed into law, the new act will seek to promote û û û û û domestic tourism through the provision of infrastructure and the promotion • Repatriation of net earnings outside Nigeria by of activities in the areas of tourist attractions and festivals of food, fashion Foreign Investors û û û û û and culture, entertainment, water tourism, historic sites, museums, parks, game reserves, beaches, natural beauty spots, holiday resorts, and Below is the relevant investment incentive that government recently launched to encourage souvenir industries investments in the economy, which the MICE sub-sector benefits from • The DG, NTDC has outlined the cardinal points of his administration in the acronym, CHIEF – Corporate Governance & Regulations, Human Capital Comparison with other MICE Investment incentives for Nigeria Development, Infrastructural Development, Events & Marketing, and countries Finance & Investment. Quoting the DG NTDC, “The key to this law is the freedom it gives to the individual. It allows choice. It is based on alliances US Germany UK Spain France not enforcement. If we are to build a solid domestic platform on which international tourism will rise, we must operate to internationally accredited • 25% of income in convertible currencies exempted • There are no similar investment incentives and recognized standards”. from tax. in these other leading MICE countries • Lagos and Cross River states have enacted laws regulating hotels, food, • Section 37 CITA (Companies Income Tax Act gaming and liquor business. CAP. C21 LFN 2004, as amended 2007) provides that such income must be generated from tourists and be put in a reserved fund to be utilized within 5 years for the building and expansion of new hotels, conference centres and new facilities for the purpose of tourism development.

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8 Policy, legislation & case studies 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Legislation regulating business activities in other MICE market 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Legislation regulating business activities in other MICE markets

United States of America MICE market United Kingdom MICE market Germany MICE market

The following activities listed below are regulated by The Government has just published its Tourism Action In Germany, the Consumer Protection Office issues various laws in the United States of America: Plan that includes some new initiatives and measures to catering/restaurant permits. In order to meet the help Britain compete other major tourism destinations, requirements for a license to be issued, one must • Theft or crime committed within hotel premises welcoming more international visitors. Working in demonstrate, among other things, that the premises to • Guests refusing to settle their bills partnership with the Tourism Industry Council, the be used for the hotel and catering business are suitable following areas of regulation were identified where (by means of construction drawings/floor plans of all • Safety of hotel guests progress can be made to allow tourism businesses to business areas inclusive of rooms designed to • Breach of contracts for reservation flourish: accommodate staff). Also in Germany, price display is regulated by the Display of Prices Act of 14th March • Health and safety of employees in catering • Deregulation of Private Hire Vehicle (PHV) licenses. 1985. operations This will allow owners of hotels to transport visitors from train stations/ ports of entry, without having to This regulation contains the most important principles • Children and young people working in catering apply for PHV licenses (operator, vehicle and driver). regarding pricing information for the goods and services • Dismissal of employees on offer in retail outlets, in the services sector and in • Introduction of a new, light-touch licensing notice, the hospitality and accommodation industry. Everything • Safety of guest’s property which will allow small quantities of alcohol to be sold that is served must be priced. The prices indicated in by small accommodation providers to their guests, and • Catering/restaurant permits the price lists must be final prices, i.e. they must include by community groups at local events. any additional charges (e.g. VAT). Price lists must be • Price lists and stipulations displayed or provided as follows: • Safety and working conditions for employees • The price list must be provided in the form of a food or drinks menu prior to taking the order or on specific request • Food and drinks menu must be displayed on every table • Food and drinks menu must be otherwise displayed where it is clearly legible.

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Legislation regulating business activities in other MICE markets How changes in legislation will impact Nigeria MICE industry

France MICE market Spanish MICE market • The NTDC Act of 1992 regulates tourism in Nigeria, established some of its agencies without any law to back their existence. Tourism in France comes under the ministry of Changes in VAT regulation offer event organizers, • The Act was also too rigid and did not give established agencies tourism responsible for economic & financial opportunity to make savings of up to 21 per cent on enough flexibility to operate and meet their set objectives and to matters. In 2009, the law on development & events. generate revenue to guarantee their continued operations. modernization of tourism services established Atout • The new regulation means that there are more • This Act has also not gone through any review or amendment France as the National Tourism Organization possibilities for Spanish destination despite several years of socio-political and economic changes in the responsible for development of tourism in France. management companies (DMCs) to invoice country. Recently, policy has focused principally on the clients without the addition of VAT. following: • It is like most laws made under the military regime; characterized by • This regulation could potentially deepen several inadequacies and shortcomings and out of consonance with • Strengthening the promotion of France abroad: competition in the MICE market. For event global trends. The promotion abroad of France as a planners, this regulation would enable them • Areas to which changes will benefit the sector include, fashion & destination is one of the tasks assigned to Atout qualify for special tax arrangements for events culture, entertainment, water tourism, historic sites, museums, France. Promotion aimed at customers in booked through DMCs. emerging countries has been stepped up. One parks, game reserves, beaches, natural beauty spots, holiday indication of that effort is that 9% of the • Also, the Associated Spanish Event Agencies resorts, & souvenir industries. (AEVEA) comprising 37 event agencies has promotional expenditure of French tourist offices • For instance, with the passing of the new NTDC Bill, it is to be been created out of the Spanish MICE abroad is aimed at customers from BRIC expected that issues mitigating local MICE industry development industry’s need for its own set of regulations and countries. such as lack of adequate MICE infrastructure would be handled. for protecting its legal, financial and creative • Modernization & adaptation of supply: The 2009 rights • Presently, the law seeks to effect major changes such as Nigerian law on the development & modernization of Travel Bureau becoming the Tour Operating Company & a Tourism tourism services improved tourist Development Levy introduced. accommodation, which was then entrusted entirely to Atout France. The purpose of the • Added to that would be a Tourism Development Fund, which should reform was to encourage an upgrading of all inject added funding aside the statutory funding from the federation types of tourism offer. account, & help the NTDC better regulate the industry. • The proposed Tour Operating Company is expected to serve as a flagship tour operating company in Nigeria that should lead in devising creative tour programs that will stimulate tourists’ interests both locally & internationally.

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8 Policy, legislation & case studies 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Case studies 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Century Hotel , Ago palace way FOMWAN Hotel and event Centre , Utako FCT Century Hotel has been in existence for upwards of 25 years and has been Case studies FOMWAN Hotel and Events Centre is a MICE facility owned and the hotel of choice for both public and private institutions. In 1996, the operated in the FCT by the Federation of Muslim Women's management of Century Hotel experienced a decline in revenue as a result Associations in Nigeria. They are regulated under the relevant of a policy by government, restricting public sector workers to government government guidelines, including guidelines on pest and vector guest houses & its facilities only. This action led to a decline in the revenue control, aimed at reducing man-pest/vector-contact in order to of the hotel by 25% to 30% as their key customers, who were mainly maintain and promote public health. To this end, facilities such as workers of the Central Bank of Nigeria, stopped their patronage in this are expected to take measures to exclude pest and vector from compliance with this policy. such premises by conducting fumigations on a quarterly basis. Government regulations also specify that government- The hotel management expressed concerns regarding how their business approved service providers must carry out the fumigation. was negatively impacted, as the policy created an uneven playing field, putting at risk, income that otherwise would have been generated from The management of this facility however faults the requirement to lodging, meals & conference facilities. As a result, the hotel had to layoff a use only registered and approved service providers, accusing such number of their staff, and introduced ‘shifts’ for those remaining. service providers of using sub-standard chemicals, executing their service poorly, yet charging above market rates. They are thus of The hotel encouraged the reversal of this policy that has significantly the view that the resources expended on this regulatory reduced their ability to generate enough revenue to meet their obligations requirement makes it an expensive venture in the long run, and to their staff & government. does not give value for money in return.

Ogavenue A sector-specific experience that can better describe how to improve the competitiveness of the local MICE industry is that of 24 year-old Andrew Airelobhegbe who was engaged in planning his sister’s wedding. During the course of planning, Andrew experienced difficulties deciding on and securing a venue largely due to a lack of online visibility. According to Andrew, an online presence would have made his experience turn out differently. Andrew thus found a need for building such a platform, which led him into market research. He discovered the space was laden with many opportunities. The result of this discovery was OgaVenue; an online event/venue booking platform where users can search and book venues across all 36 states of Nigeria. At its core, OgaVenue is a typical example of an internet startup, as it maintains no form of physical interaction with the user. This culture is translated into the mind of anyone who steps foot into OgaVenue’s office space in Yaba, by the way the executive team go about their daily routine. Having launched formally in August 2015, Andrew’s OgaVenue is arguably the first Nigerian startup to stage a bold entrance into the event/venue booking industry. At the start, Andrew had to personally approach about 60% of the venue owners currently listed on OgaVenue, and then outsource the rest to individual agents for a small fee. The experience according to him was trailed with mixed emotions, as some of the venue owners were eager to come online while the others showed some resistance. After a year of trading, OgaVenue already covered 17 states across Nigeria, listing over 2000 venue options, including some of the busiest venues in Lagos. "Before we launched, none of these venues had any online presence, nobody knew anything about them,” he explains. The on-boarding process was however accelerated after the late adopters saw their early counterparts gain online visibility. “This made it a lot easy to on- board them on the OgaVenue’s platform,” he remarks. At present, the platform has grown to over 8000 venue listings; inevitably adding more credibility to an industry that has come to be valued highly. OgaVenue may not be a product that can keep investors ceaselessly chasing after it, but if there’s one thing Andrew’s exploits have proven, it is that the Nigerian MICE industry is large enough to accommodate more players. Another pointer to this fact is the likes of Hotels.ng and ToLet.com.ng

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Policy factors impacting market segment development 48

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9 Business & policy factors impacting market segment development 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Business factors impacting market segment development 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

The bedrock of the development of any industry, MICE inclusive, are the multiple cottage industries being run by passionate indigenes that has enabled such industry become the largest employers of labour in the world. Available data shows that many foreigners come to Nigeria on a daily basis, but the majority of these visits are strictly for business reasons and most visitors do not explore beyond their hotel environment until they return. Nigeria is not considered as a destination for international meetings, conferences or events. However, Nigerians are known to be avid travelers, going to the furthest parts of the world, not only for business meetings, conferences or events, but also for pleasure. There are several reasons for this lack of international patronage which includes (I) lack of infrastructure, (II) poor security and (III) poorly-maintained tourism sites. Other more commonly- mentioned reasons are highlighted below:

Industry perception E Crime and corruption E Innovation I This is one of the biggest problem While crime level and corruption also came Businesses needs innovation in order to according to the DG of NTDC. The safety of up as an impediment in our interaction with keep up with competitors. Innovation a tourist is among the primary factors for stakeholders, the latter appears to be more could come in the form of marketing, any successful tourism industry. Safety– pronounced given that the MICE industry is promotional initiatives, staff training as related problems whether real or perceived more of demand-driven. Suppliers are well as embracing new technology. A lack ,exert a negative impact on the reputation of sometimes forced to succumb to corrupt of innovation poses a serious risk to a the host country (Nigeria) practices just to get lucrative business growing business as no innovation will deals from government agencies. cause a company to become dull, stagnant and irrelevant. E Infrastructural deficiencies High import duty/tariffs and E Lack of trained professionals I This was one of the major business exchange rates impediment in our survey. Among decayed Another major impediments to the growth infrastructure mentioned was electricity To stakeholders engaged in rentals, high and development of the MICE sector supply and bad roads. On the issue of import duties/tariffs and exchange rates mentioned, is the lack of trained electricity, stakeholders particularly those have resulted in high cost of needed professionals. To industry players engaged in the hospitality sub-sector who are equipment. Where equipment have been generally, there is increase of personnel large power consumers state the epileptic procured and imported, difficult import into the industry without the requisite supply of electricity leads significant processes often lead to delays and training, experience and understanding of investment in private power supply additional costs to equipment owners. the sector. arrangements with its attendant high costs.

E E Lack of internal business Security Access to funds structure I Another of the commonly mentioned Access to affordable loans was Many Nigerian businesses operating in the business impediment is security. With a mentioned as a key impediment to MICE segment lack the required internal section of the country declared as unsafe the growth and development of the structure to enable them operate at high levels to local and international travelers, this required for segment development. Many of the would prove to be a huge business MICE industry. To stakeholders, they appear to be unattractive to firms lack appropriate record keeping of both impediment particularly to the growth and financial and non-financial information, strategic development of the MICE industry. commercial lenders, leaving them with very little options for raising development for growth etc. These factors amongst others impact the MICE market business capital segment development.

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Opportunities in the MICE market segment in Nigeria

Like in leisure tourism, experiences are becoming Meeting spaces are changing from traditional increasingly important in the MICE industry. MICE ‘boardroom’ styles to innovative approaches. travelers demand more added value from their MICE European MICE planners are increasingly events. Enriching experiences and activities are interested in non-traditional venues as locations. becoming more important to them than the For example outdoor venues, sporting venues, functionality of accommodations and venues. museums or aquariums. This is because non- Wellness related activities are an important trend for traditional venues are especially popular with the Incentive market.Suitable They for are also all acategories popular addition weddings , this trend is here to stay. to other business meetings. business and personal MoreExperience non-traditional tourism Tip: Tips: presentation Experience tourism properties • Be creative and innovative in your MICE venue • Offer a variety of interesting experiences and offerings. activities for MICE travelers. • Emphasize these experiences in your marketing

MICE events increasingly connect with social media platforms. These can be general platforms, or specific ones created especially for the event. Social media Some corporations offer incentive trips to motivate platforms can help MICE buyers and participants to their employees, distributors or clients. These trips connect, interact and share knowledge. Not only after are mostly recreational, but increasingly include the event, but also before and during. This creates a formal meeting components. This is because having much wider impact of the event over a longer period a meeting may provide corporate tax benefits. It also of time. Communication technologies and social offers additional value in terms of networking, media remain important for the development of MICE communication, education and team building. This Connecting MICE and Combining incentives in the future. trend is expected to continue in the coming years. social media and meetings Tips: Tip: • Use social media platforms for your MICE events. • Include optional meeting components in your • Create custom hashtags for you event. Speakers’ incentive programs. quotes, photos & experiences can be shared online across social platforms in real time. • Widely available high-speed internet access is extremely important

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9 Business & policy factors impacting market segment development 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Policy factors impacting market segment development 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Key policy factors impacting Nigeria MICE industry development

Government policy direction is also a critical factor that affects the growth and development of the MICE industry. Deliberate policies encouraging investments in training is regarded as a measure of the general health of the meetings and events industry. Policies that promote training also signify an imminent uplift in incentive programs as well as conferences and large meetings; and is related to a company investing in staff and growing its business. Policy direction that also focuses on attracting big conventions and international meetings to hold in Nigeria will also re-energise the industry and create opportunities for growth. The media also has a role to play in driving growth opportunities within the MICE industry. To this end, public-private partnerships can be leveraged upon. A case in point is the recent ‘Tour Nigeria’ policy focus of the NTDC. Tour Nigeria is a domestic tourism-driven vehicle on which essential tourism initiatives are being pushed. Through this policy drive, domestic tourism is expected to be vigorously pursued through the provision of infrastructure and the promotion of activities in the areas of tourist attractions and festivals of food, fashion & culture, entertainment, water tourism, historic sites, museums, parks, game reserves, beaches, natural beauty spots, holiday resorts and souvenir industries.

To help achieve this, the NTDC has a roadmap with short, medium and long-term objectives that are distilled into a 5-point action plan with the acronym CHIEF. This represents Corporate Governance & Regulations; Human Capital Development; Infrastructural Development; Events & Marketing; and Finance & Investment.

1. A review of the NTDC Act of 1992 and all tourism laws; 2. A review of the National Water Transportation policy and seeking the support of the National Inland Waterways Authority to promote and monitor tourism on the waterways; 3. Ensure the ease of entry and exit of tourists in and out of Some of the planned activities the country with prompt, accessible and affordable access under CHIEF include to visas; 4. Recommend the introduction of tourism education as a course across secondary schools and higher institutions in Nigeria; 5. Champion the upgrade of beaches and waterfronts across Nigeria’s coastline; 6. Empower a business development team to manage and optimize internally generated revenue, among many others.

Worthy of note is the NTDC’s strategy to harness digital and online communities like Facebook, Twitter and Instagram to promote destinations and tourism activities in Nigeria. Given the speed and reach of these social media platforms, their impact cannot be over emphasized. The main strategy of the NTDC is to utilise these social media platforms in driving the Tour Nigeria brand.

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Factors impacting MICE industry development

Location Relaxation, Rest and Recreation Location and accessibility is one of the most important Industrialization and urbanization has created great factors that affects some of the players in the various sub- pressures on modern living. The stress and strain of sectors of the MICE industry. The better the location as well modern city life has made it more necessary for people to as its accessibility, the more MICE activities what will be get away and relax in an atmosphere which is more witnessed. peaceful and healthy.. Accessibility relates to the necessary physical infrastructure required to access MICE offering facilities.

Curiosity & Culture Professional or Business An increasing number of people are visiting different lands, Attending conventions and conferences related to the especially those places having important historical or professions, industry or commerce or to some organization cultural associations with ancient civilizations or for those to which the individual belongs has become very popular. places holding special festivals for music Art, theatre and The ‘convention travel’ has made great strides in recent other cultural events of importance. Curiosity has been one times. of the major reasons for tourism.

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Risk assessment 51

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10 Risk assessment 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Risk assessment 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Sector-Specific Risk Impacting the Nigerian MICE Market

S/N Business Mechanism Impact on the industry Description

► Corporate governance is an important index that potential investors use for their decision-making.

► It is important that the MICE industry is perceived as having good corporate governance and that 1 Corporate governance and corruption H corruption is being tackled.

► Where it is apparent that corruption exists and corporate governance is poor, the impact on inflow of new investments into the industry would be negative

► For Nigeria to carve a niche for itself in the global MICE market, it is important that infrastructural challenges are addressed, particularly power, access roads and cost of internet connectivity.

► However, compared to several other countries in African, Nigeria has relatively advanced infrastructure 2 Infrastructural deficiencies H networks that cover extensive areas of the nation's territory.

► It is inadequate though and has been described as one of the leading impediments to the country's growth.

► Nigeria in recent times has witnessed an unprecedented level of insecurity. This has made national security threat to be a major issue for the government and has prompted huge allocation of the national budget to security.

► In order to reduce the incidence of crime, the federal government has embarked on criminalization of terrorism by passing the Anti-Terrorism Act in 2011, fundamental surveillance as well as investigation of 3 Security, crime and corruption H criminal related offences, heightening of physical security measures around the country aimed at deterring or disrupting potential attacks, strengthening of security agencies through the provision of security facilities and the development and broadcast of security tips in mass media.

► Despite these efforts, the level of insecurity in the country remain high. Nigeria has also consistently ranked low in the Global Peace Index, signifying a worsened state of insecurity.

► The industry is constituted primarily by MSMEs. Industry operators have accused commercial banks in the country of perceiving MSMEs as unviable & risky business ventures, and this has largely informed banks’ attitude to offering finance to this critical sector. 4 Access to finance H ► Access to finance is considered as one of the biggest risks to operators in the industry, as finance is critical to each of their operations and their overall well-being. Having SMEs source funds at high interest rates could serve as a disincentive to their remaining in business

► The high import duty tariffs and exchange rate is another risk to MICE market operators.

► The country is still largely dependent on imports, with low value addition and this makes operators High import duty/tariffs & exchange 5 depend on imported goods and services. rates H ► This is an area that need to be carefully examined to ensure a balance that will not hurt the economy, while serving the needs of industry players. Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 51 of 64 15 May 2018 | Version 1.0

Macroeconomic risk impacting the Nigerian MICE Industry

Inflation Risk § The risk that there will be a sustained increase in the general price levels, which will directly impact cost of MICE activities.

High Cost of Borrowing § The risk that players across the entire fashion value chain would be unable to access financing as a result of the high interest rates charged by financial institutions Foreign Exchange Risk § The risk that the price of the Naira will keep depreciating and hurt the ability of operators to purchase foreign goods and services needed for their business. Demand and supply risk § The risk that individuals, companies will not procure the services of MICE industry supply players e.g. DJs, event planers

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Other risk factors that will impact the MICE market segment

H M

Bureaucracy risk policies Unfavorable government policies • The risk that players across the MICE value • The risk that unfavorable government policies chain would be unable to access funds and would adversely impact the fashion industry. other government incentives as a result of administrative bottlenecks or delays. • The risk that industry players would be unable to plan and structure their business as a result of inconsistency in government policies

Polictical Risk

H Security risk Political Instability • The risk that the prevalent insurgency and terrorism issues will disrupt production of the • The risk that political instability would fashion upstream industry. discourage tourist from coming into the country for MICE related activities such as • Possibility of becoming involved in the political meeting, conferences and tourist visits. turmoil of the country being visited

Tourism's primary goal is to fulfil people's travel desire and holidays' expectations. In order to achieve the above mentioned goals, providers of tourist facilities need to make sure that safety and security of their guests are respected. "The tourism industry is safety and security dependent" (Tarlow & Santana, 2002). Perceptions of safety greatly influence tourists' intentions to travel internationally. "Lack of safety is a strong predictor of tourists avoiding some tourist destinations" (Sonmez & Graefe, 1998a). Also it is important to know that: "Perceptions of travel risk, anxiety, and perceptions of safety are important determinants of international travel" (Reisinger & Mavondo, 2005). The issue of Safety and Security has gained more importance in the Tourism industry during the past decade. Types of risk associated with tourism are highlighted below.

Cultural Risk Possibility of experiencing difficulties in communicating with foreigners, cultural misunderstanding, inability to adjust to a foreign way of life and standards

Financial Possibility of not obtaining value for money, losing or wasting money if travel expectations are not fulfilled

Health Risk Possibility of becoming sick while traveling or at the destination, Possibility of being physically injured, includes danger and injury detrimental to health (accidents)

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11 Strategic recommendation and road map 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Strategic recommendation and road map 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendati ... 6 Value chain 12 Appendices

1. Establishment of a Registered Association

The MICE market in Nigeria has a significant number of players operating in the sector. Research shows that only

about 36% of players are not formally registered. As a result of this, there is a lack of proper records of all the h g participants in the market space. i H

Another major impediment to the growth and development of the MICE sector is the lack of trained professionals. d o

There are no training standards for entry into the industry, therefore individuals who enter into the sector do not o h i

have the requisite training, experience and understanding of the sector. l e k

Service quality also remains a major challenge for players in this sector as the delivery of service by participants are i sometimes below standard. This can also be attributed to the lack of adequate training for sector players. L w o

A policy recommendation around the establishment of a registered association would help to alleviate this L challenge. One way this can be accomplished would be by requiring all players within the various sub-categories under this sector to register with the association. Mandate of the association would be to setup an institute for training and development by organizing structured training courses and issue certificates to individuals that have completed specific trainings. The association would Low High also be responsible for issuing annual certification to players in the sector after passing through necessary Impact validations of trainings and infrastructure requirement.

2. Infrastructural Development via Public Private Partnership (PPP)

Meetings industries are both capital and labor intensive, requiring specific ongoing investment and development in

hard infrastructure (e.g. venues), software (e.g. education) and transport to support a destination’s success and h g credibility. i H

Infrastructure deficiencies is one of the major business impediments in the sector. On an internal level, many d o

sector players lack the required and right type of infrastructure to aid their businesses. o h i On an external level, dilapidated infrastructure such as bad roads and electricity supply are the most pressing of l e k

infrastructure concerns. Stakeholders, particularly those engaged in the hospitality sub-sector describe that the i

epileptic supply of electricity leads them to invest in private power supply arrangements with its high attendant L w

costs. o L Lack of access to stakeholder venues and facilities due to bad roads and no automobile viable transportation option leads to a decline in the number of visitors recorded for the various tourism sites and this in turn affects the MICE sector. A policy recommendation around public private partnerships for the development of identified key infrastructure can Low High be adopted for the improvement of the sector. Also, private sector players should be invited to assist with the Impact development and refurbishment of key infrastructure in the tourism sector.

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3. Access To Finance

Commercial banks in Nigeria view MSMEs (where most of the MICE Operators are) as unviable and risky business

ventures, and this has largely informed banks’ negative attitude to offering finance to this critical sector. h g i

Access to affordable loans was mentioned as the key impediment to the growth and development of MICE H

business. To various stakeholders, MICE Operators appear to be unattractive to commercial lenders, leaving them d o

with very little options for raising capital. o h i l

We recommend the Federal Government should establish a Venture Capital Fund (VCF). Federal Ministry of e k

Finance will be the Sponsor and provide initial seed capital of pre determined amount for the launch of the Fund. i The Fund will provide capital to MICE Operators to support the latter’s early stage and or high growth potentials in L w

Nigeria. The Fund will be institutionalized to focus on MICE with the potential to engender innovation, generate good o L return on investment, create jobs, and promote entrepreneurship and social development in general. For MICE Operators to benefit, they will submit a 3-5 year business plan which will be reviewed by the Fund Manager. The capital provided will be for a maximum period of 5 years and shall be returned with annual dividend and interest for the equity and debt portion accordingly. By doing this, the funds in the VCF will be revolving and therefore be self sustained without injecting further capital from the Federal Government. Low High Impact

4. Review of Existing Regulation

A review of the existing legislation which is the Nigerian Tourism Development Corporation Act of 1992 (NTDC Act)

would be useful in the formulation and development of new policies that would impact the MICE sector. h g i

A review of this Act, would help determine the extent to which the MICE sector is affected as a whole and aid with H

the development of MICE specific solutions not addressed currently. The current amendments to the Act has some d

planned activities currently capable of improving the MICE sector to include o o h i • Review of the National Water Transportation policy, l e k • Ease of entry and exit of tourists in and out of the country, i L w

• An introduction of tourism education as a course across secondary schools and higher institutions in Nigeria, o L • Upgrade of beaches and waterfronts.

Low High Impact

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5. Security Measures

In recent times, the security of travelers in the country has been a major cause of concern at both the local and

international stage. Nigeria is plagued by terrorist attacks of the Boko Haram in the North-East to kidnapping and h g destruction of Government property in the South-South, as well as killings resulting from feuds between herdsmen i and farmers across various parts of the country. H d

The reasons above are why many foreign travelers are unwilling to travel into Nigeria as it has become an o o h

unattractive tourist destination. Locally, confidence on security is low. This is evident in the case of private i l

companies who choose to have retreats etc. outside of the country, which has lead to a loss of opportunities for the e k

local MICE operators i L

A policy recommendation around security for tourist centers and areas that have key MICE related activities would w o

help improve the sectors visibility as well as its performance. An example would be the establishment of security L checkpoints and increase surveillance around such places as this would help improve confidence around safety and security concerns.

Low High Impact 6. Import Duties

The high import duty is another risk to MICE market operators. To stakeholders engaged in rentals, high import

duties/tariffs have resulted in high cost of obtaining needed equipment. Where equipment have been procured and h g imported, difficult import processes often lead to delays and additional costs to equipment owners. i H

Nigeria is a country that is still largely dependent on imports and the federal government in its bid to expand the d economy and develop local capabilities has decided on a reduction of imports to improve the country’s trade o o h

position. This is an area that need to be carefully examined to ensure a balance that will not hurt the economy, while i l

serving the needs of industry players. e k i

However, in the short to medium term, a temporary reduction or outright removal of duties levied on any MICE L directly related activity would benefit sector players, improve margins, encourage entry into the sector and lead to w o

the overall development of the sector as a whole. L

Low High Impact

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7. Foreign Exchange

Exchange rate poses a risk to MICE market operators. As stated earlier, to stakeholders engaged in rentals, etc.

who require importing their tools of trade, high exchange rates have resulted in high cost of obtaining needed h g equipment. i H

The Central Bank of Nigeria, in its effort to move towards a stabilized exchange rate, placed a ban on 41 items that d are ineligible for foreign exchange. o o h i This area needs a care examination to ensure that items directly or indirectly related to MICE segment operators, in l e

the short to medium term are excluded from this list as it would spur overall sectorial improvement by benefiting k i

sector players and thus contributing to the overall development of the MICE sector. L w o L

Low High Impact 8. Subsidies & Tax Breaks

From our research findings, stakeholders engaged in the hospitality business mentioned the challenge of multiple

taxation by regulatory bodies. They alleged that several organs of local, state and federal government demand the h g same tax, but in different forms, thus significantly raising their operating costs. i H

Tax breaks can greatly reduce the tax liabilities for players in the MICE sector. Tax breaks trough tax deductions, d o

tax credits, tax exemptions and other incentives. o h i l e k i L w o L

Low High Impact

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9. MICE Promotional Organisation / MICE Publicity

From our research, we noted the awareness of the various tourist centres by the people of Nigeria is very poor.

There is need for increased publicity and advertisement of the various tourist centres in Nigeria, to be led by the h g Ministry of tourism, culture and national orientation. The Ministry will be charged with the responsibility to promote i H the nation’s rich tourism potentials and cultural heritage through identification, development and marketing of the d

diverse cultural and tourism opportunities, by implementing policies aimed at diversifying the economy and placing o o

culture and tourism on the path of sustainable growth and development, as well as re-orienting the populace for h i national development. l e k i L w o L

Low High Impact 10. Strategic Communication

One of the biggest problems directly impacting the MICE sector is the safety of a tourist and this is among the

primary factors for any successful tourism industry. Safety – related problems whether real or perceived, exert a h g negative impact on the reputation of the host country (Nigeria). i H

Meetings industries are dynamic and are impacted by local and world events. Effective strategic communications d o

can exploit opportunities and mitigate challenges. Nigeria needs to develop and implement a strategic o h i

communications plan to address misperceptions about the safety of Nigeria as a destination in addition to l

developing a MICE brand for Nigeria. e k i A strategic communications and market engagement program that includes a key message and story framework for L w

Nigeria’s MICE sector, which can be adapted to suit key target markets. This must be widely and consistently used o L by all industry stakeholders to successfully inspire the market to consider Nigeria as a meetings destination. Also, developing the controlling Ministry in charge of Tourism to provide Nigeria meetings industry stakeholders with strategic communications support on marketplace security misperceptions as well as the deployment of social media initiatives on the dissemination of information on the sector. Low High Impact

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11. Industry Leadership

Meetings industry ecosystems are complex and rely on a result-driven coalition approach led by an effective and

respected leadership organization to realize the following: (i) implement the required ecosystem elements, (ii) lead h g an effective marketplace and community presence, (iii) create and monitor transparent performance goals to build i trust and collaboration. H d

Nigeria needs to lead in this regard by focusing on this competitive niche segment. A policy recommendation on a o o h

way of achieving the outcomes above would be to develop a database of meeting and congress business i l

opportunities that align with MICE’s identified business priorities per above, which will become Nigeria’s primary e k meetings industry relationship management platform. i L w

In addition, a clear definition of industry communications policies and business opportunity support services as new o business opportunities are developed for the MICE sector in Nigeria would be key to the improvement of the sector. L Finally, the establishment of a transparent communication system with Nigerian MICE industry business partners to share information about participation opportunities and pending business opportunities.

Low High Impact

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Appendix A - MICE contribution to GDP (2016) by State 62

Appendix B - MICE contribution to employment (2016) by State 63

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12 Appendices 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Appendix A - MICE contribution to GDP (2016) by State 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Distribution in terms of GDP Zone States GDP (2016) Nm Zone States GDP (2016) Nm North-West Kaduna South-West Ogun 30,196 30,593 Kebbi Ekiti 9,613 8,322 Zamfara Ondo 12,047 24,586 Sokoto Osun 14,078 21,272 Kano Oyo 36,212 47,106 Jigawa Lagos 8,731 98,410 Katsina Regional Total: 17,596 230,289 Regional Total: 128,475

South-South Akwa Ibom 32,665 North-East Taraba Bayelsa 9,926 12,673 Borno Edo 15,136 34,737 Bauchi Cross River 13,771 27,151 Adamawa Rivers 13,389 61,575 Gombe Delta 7,308 48,941 Yobe Regional Total: 5,876 217,742 Regional Total: 65,406

South-East Ebonyi 7,983 North-Central Benue Enugu 20,057 12,845 Kogi Imo 13,564 41,528 Kwara Abia 11,223 25,383 Niger Anambra 17,538 19,764 Nassarawa Regional Total: 8,830 107,504 Plateau 15,060 FCT 33,451 Regional Total: 119,723 Growth & Employment Project (GEM): Federal Ministry of Industry, Trade & Investment | Page 62 of 64 15 May 2018 | Version 1.0

12 Appendices 1 Background, objectives & s ... 7 Competitive landscape 2 Executive summary 8 Policy, legislation & case ... Appendix B - MICE contribution to employment (2016) by State 3 International overview 9 Business & policy factors ... 4 Nigerian overview 10 Risk assessment 5 Market sizing and growth ... 11 Strategic recommendation ... 6 Value chain 12 Appendices

Distribution in terms of Employment Zone States Employment (2016)

Zone States Employment (2016) North-West Kaduna 54,827 South-West Ogun Kebbi 33,693 29,269 Ekiti Zamfara 21,548 29,461 Ondo Sokoto 31,099 33,412 Osun Kano 30,941 84,965 Oyo Jigawa 50,535 39,301 Lagos Katsina 81,461 52,351 Regional Total: Regional Total: 249,275 323,587

South-South Akwa Ibom North-East Taraba 35,429 20,793 Bayelsa Borno 12,719 37,517 Edo Bauchi 65,236 42,264 Cross River Adamawa 26,109 28,632 Rivers Gombe 46,864 21,273 Delta Yobe 37,040 20,982 Regional Total: Regional Total: 223,398 171,461

South-East Ebonyi North-Central Benue 19,643 38,132 Enugu Kogi 29,438 29,630 Imo Kwara 35,562 21,429 Abia Niger 25,613 35,701 Anambra Nassarawa 37,796 16,840 Regional Total: Plateau 148,052 28,728 FCT 12,700 Regional Total: 183,158

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