Has Abuja lost Africa’s conference centre status?

Agitation got stronger with the introduction of Entertainment Fee this year. The Federal Capital Territory Administration (FCTA) announced that it needs the five percent Entertainment Fee to improve health care, education and public transport. This tax is apart from Value Added Tax (VAT).But hotel owners say they are opposed to the new tax because their […]

Agitation got stronger with the introduction of Entertainment Fee this year. The Federal Capital Territory Administration (FCTA) announced that it needs the five percent Entertainment Fee to improve health care, education and public transport. This tax is apart from Value Added Tax (VAT).
But hotel owners say they are opposed to the new tax because their business is already weighed down by many unfavourable conditions.
Lack of access to land
Many hotels in Abuja suffer due to lack of land for expansion. Hotels that were built when the city was small need to be made big but the land is not just there.
President of the Federation of Tourism Association of Nigeria (FTAN), Mr Tomi Akingbogun complained that “Land is out of reach of a common investor in Nigeria. Abuja is over 50 years. We’ve been saying, open up the destination for us. Land as we understand is in the hands of the civil servants. If you want to buy a plot of land in Wuse II, it’s N300 million, N400 million, N500 million. What are you going to put on it? What rent are you going to get from it?”
According to him, efforts by operators in the tourism sector to access the waterfront (Jabi lake often described as tourism centre) has met brick wall. “It’s only now that we see a structure coming up. We all have been applying for access into that. But they held all these things into their armpits. That’s supposed to be a top tourism centre for Abuja,” the FTAN president stated.
FTAN is a privately driven umbrella body for all tourism related acquisitions in Nigeria.
He condemned FCTA for giving title to an unknown firm on the shores of Nigeria to build a shopping mall in the waterfront saying, “We don’t know who is building the structure there. It’s only in Nigeria that we do things without proper advertisement. They are supposed to belong to the organized private sector. If you are entering an industry, you have to be registered.”
He noted that top grade restaurants which started nicely in Nigeria like Mr Bigg’s which should have expanded to attain the status of the likes of MacDonald’s are constrained due to tough business climate in Nigeria.
He said FTAN is making government to see the negative impact its policies have on the economy. “Government must make the environment conducive for us to expand. We are not expanding. We can’t get land,” he complained.

Expenses on power
The major headache to investors in the tourism sector is lack of electricity. They say power is the major constraint to development. It is either electricity is not there or what is supplied is poor. Some say electricity here burns buildings or damages equipment.
It is gathered that an average hotel of 30-50 rooms pays N1.2million to N1.5 million. This excludes another N600,000/N800,000 spent on diesel.
Group Managing Director of Nanet Group, manager of hotels, fast food, restaurants and contract catering services, Mr Ini Akpabio said power generation takes up to 20 percent of his business’ total income.
He lamented, “The hospitability sector especially hotels, fast food and restaurants, we’re already putting much of our money in the generation of power. Most of us spend huge amount of money acquiring generating sets, a lot of money maintaining them. We spend a lot of money buying diesel. We also had massive increases in electricity bills we pay.”
He condemned government’s tax regime: “We in the hospitality and tourism sector feel that we’re being pursued. There’s too much emphasis on getting so many types of taxes and levies from us.” He maintained that the new entertainment tax will cripple business and send many into the labour market.
The Nigerian Electricity Regulatory Commission (NERC) increased electricity bill by 58 percent this year so investors in power can enjoy a competitive market. However, electricity consumers say there is no corresponding improvement in supply. “They can cut power six, seven times a day. Some of our members have accused government – that it’s likely that these people make more money when they don’t give us electricity constantly,” FTAN president suggested.

Numerous charges
Another trouble hotel owners face is huge charges. Hotels built in residential areas for instance are a source of additional revenue for FCTA. The FTAN president said, “Small scale hotels in residential areas are made to pay N2 million, N3 million, N4 million per year. Some pay as high as N10 million as contravention fee. Because they are in residential area, they’re permanently going to be surcharged that amount apart from other bills that they pay. The bills are many.”
He said instead of adjusting the master plan to accommodate those facilities government places charges.
Stakeholders therefore described the new Entertainment Fee as unnecessary. Akingbogun who owns Hotel Rosebud in Garki, Abuja reacted thus, “If it’s event centre, entertainment center, maybe a hall, but no, they said all hotels, all restaurants, all night clubs, everybody will pay five percent and the five percent is not only on your bill, they will add the VAT you pay to government. You add everything together then apply five percent on top of it. It’s not done anywhere in the world. VAT is going to FCTA. Why do they want another five percent? That’s 10 percent gone. To get money from a Nigerian bank is 25 percent – 23 percent Central Bank plus two percent administrative charges, that’s 25 percent. So 10 percent plus 25 percent what’s that? 35 percent! How much is left?
“We’ve written authorities severally. Nobody is coordinating to see the real cost of doing business. If we go on like this, how can we talk about employment? Are we not the ones to create employment? The cost of doing business in Nigeria is too high. That’s why you don’t see hotels expanding.”

 Unregistered hotels abound
One disturbing trend is surfeit of unregistered hotels. There are around 2,000 of them in Abuja, FTAN president said. Government has not captured them. He gave the number of registered ones as 200.
He said, “Majority of them are under different names. That give us a bad name because if something happens to someone in an unregistered hotel, it will affect the registered ones. Many of them are owned by civil servants. Land in FCT is expensive because plots are in the hands of civil servants who are not under pressure to sell. Once you collect salary regularly, why will you sell what you have?”
The FTAN president said the association will meet with the energy regulatory body, NERC, the Central Bank of Nigeria and FCTA to table their concerns. “We want government to revert some of these things. If it does not, we may go to court. We have asked our lawyer to study and advise us. We took AMAC to court on waste bill it gave us and we won the case. We have a right to survive,” he maintained.
“We are talking about multiple taxation. Nigeria has been identified as one of the countries with the highest tax rate and the most difficult to pay. The number of hours we spend to put the papers together to pay tax are so many. For instance, a hotel is visited by Inland Revenue office about five to seven times a year. Why?” he queried.
The chairman of NERC, Dr  Sam Amadi however insists that the review in electricity tariff is the best way to keep the privatized companies in business. The Director of the Abuja Geographical Information Systems (AGIS) Hajiya Jamilah Tangaza could not be reached to explain why land is hardly accessible by people in tourism sector. A senior official in AGIS who did not want to be named however said AGIS only processes land applications – it does not allocate land.
Mr Abuo Francis Ojie is Public Relations Officer (PRO) of Social Development Secretariat, FCTA, the secretariat that oversees tourism in FCT. He said most of the factors crippling tourism in Abuja are national and beyond the powers of the office. According to him, Nigeria’s economy is generally down.
Chas Nwam, an Abuja resident who once worked for the Nigerian Tourism Development Corporation (NTDC) argued that Abuja remains tourism destination in Africa. “Look at the meetings held in Abuja. Events that have to do with Africa hold in Abuja,” he maintained. He however acknowledged that terror scare has led to shift of some events away from Abuja. Terror scare actually showed itself when Abuja was to host the 24th World Economic Forum on Africa last year. Government had to close offices, massively deploy security personnel and commit itself to safety of the international guests. NTDC spokesperson Grace Ezeade declined to speak with our reporter.
Some stakeholders said that tourism is experiencing a lull in the capital city. Hotels hardly get many guests. Factors like terror threats, ebola disease scare and political unrest are said to be taking their tolls on Abuja tourism. Hotel standards may have been low. Apart from some hotel structures being blight, they offer poor services. Guests do complain of finding old scruffy furniture, bed sheets and towels in the rooms. Those bothered with the matter therefore say Abuja has lost its position as conference centre in Africa. Accra and Cape Town/Pretoria might have captured it.