The establishment of a new fund to support the tourism sector is setting the stage for expansion in one of Nigeria’s most promising but least developed industries.
Though nowhere near as prominent as the country’s other tertiary segments, tourism in Nigeria is an increasing priority for the government, due both to its employment potential and the need to diversify away from commodity production. The Nigerian Tourism Development Corporation (NTDC) said in late 2011 that the country generates approximately N80bn ($509m) annually from tourism, which is extremely modest in comparison to financial services and telecommunications, in spite of the wide range of attractions the country has to offer.
In a bid to better leverage the country’s potential, Nigeria recently launched the Tourism Development Fund. Once it becomes available for disbursement, the N5bn ($31.8m) fund will be used to support different aspects of the sector, from directly funding programmes to bolstering training.
While details have yet to be finalised, the fund, according to Edem Duke, the minister for tourism, culture and national orientation, will be financed by private sector contributions and supported by a percentage from sales of, among other things, airline tickets and hotel rooms.
“Our vision is that 70% of the tourism fund will go to visual art, some toward tourism infrastructure, while a certain percentage will be set aside for the development of tourism products, as well as training,” Duke told local media in January. The training component would establish tourism education programmes throughout the country, providing new opportunities for the more than 20m unemployed youth.
A similar fund, also funded through a levy on hotel rooms, was recently launched in Ghana, by the Ghana Tourism Authority, in order to provide seed capital and financing for new hospitality and tourism-related developments.
The growth of Nigeria’s tourism industry has been bolstered in part by increased connectivity, with the country’s continuing economic expansion and political stability bringing about an increase in the number of business visitors. To cater to the rise in demand, major airlines are increasing the number of flights into the country, which in turn will help to lay the foundations for improved tourist access as well. Air France recently announced that it would launch a daily flight to Abuja starting in June, and the US-based Delta airlines has formed a partnership with Air Nigeria, which will provide reciprocity between the two company’s frequent flyer programmes.
The increase in flights will help to accommodate the estimated 1.84m international tourists who will cross its borders in 2012, according to the WTTC – a figure that is expected to rise to 2.93m by 2022.
Crucially, hotel capacity is also expending and rapidly. According to a recent study conducted by the W Hospitality group, Nigeria ranks first in hotel construction, with 43 new hotels in the works and more than 6800 rooms set to open in the next five years. Groups with hotels under construction in the country include Accor, Hilton, IHG and Protea, while newcomers hoping to get their foot in the door include Kempinski, Mantis, Marriott and Wyndham, all of who have recently signed agreements to manage hotels in Nigeria.
Though there are projects throughout the country, Lagos, one of the country’s largest cities and its business hub, has emerged as the most lucrative site for hotel construction, with Radisson Blu, Four Points by Sheraton, Ibis and Legacy having recently opened new hotels in the city and Hilton developing two of its brands there.
Of course, attracting tourists outside of the corporate and MICE segments will be difficult unless the country is able to adequately develop and maintain sites of interest. The Ministry of Tourism (MoT), for example, has identified a number of landmarks around the country as potential tourist attractions. In Cross River State, for example, plans are underway to designate the residence of Mary Slessor, a Scottish missionary; St. Patrick’s College, one of the first secondary schools east of the Niger; and sites relating to the Eyo dynasty as national heritage sites.
The NTDC has set a goal of developing at least one major tourism product in each state. For example, the NTDC is collaborating with the Kwara State government to endorse the Pategi Boat Regatta, an annual festival featuring boat displays, fishing and swimming competitions, and promote the Owu waterfalls, considered to be among the tallest in West Africa.