Cheta Nwanze, Lead Partner, SBM Intelligence

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Subjects of Interest

  • Fiscal Policy
  • Geopolitical Analysis
  • Governance
  • Politics

Landmark Resort and coastal tourism development in Nigeria 21 May 2024

A key part of West Africa's future is hinged on the success of the proposed Lagos-Abidjan highway. With its projected construction set to begin by 2025, it promises to be a game-changer for West Africa if it becomes a modern, free-flowing artery connecting major cities and facilitating a surge in cross-border trade.

If well designed, the Lagos-Calabar coastal road should be fluidly integrated into this more extensive network and stretch from an Abidjan-Lagos coastal road to an Abidjan-Calabar coastal road with a broader reach that could eventually connect with Cameroon after coming through Côte d'Ivoire, Ghana, Togo, Benin, and, of course, Nigeria to help unlock tourism potential and economic development along West Africa’s Atlantic coast.

However, the plans for the Lagos-Calabar component currently threaten the existence and viability of the Landmark Beach Resort, a major resort and business park, and this raises concerns about the government's approach to coastal development and how much it grasps the critical need for collaboration between relevant institutions like Landmark that it can work with to ensure the Nigerian section of the West African coastal plan is not only well-designed but also fosters a business-friendly environment to maximise tourism benefits.

The Nigerian coastline presents a vast canvas of opportunity. As part of a continent poised for economic growth, Nigeria can leverage its Atlantic shore for tourism development, creating a thriving industry that rivals Caribbean destinations. The success of the West African coastal highway hinges on infrastructure and building a flourishing coastal tourism industry.

The Caribbean islands have capitalised on their coastlines to become major tourist destinations, generating significant revenue and economic benefits that, in some cases, practically match what some West African countries make from oil and gas exports.

Tourism revenue in the Caribbean significantly outpaces that of West Africa despite West Africa's rich cultural heritage and natural beauty. This disparity can be attributed to several factors, including the fact that the Caribbean boasts a well-established tourism infrastructure, with developed transportation networks, resorts, and amenities catering to tourists; the fact that the Caribbean countries have a strong brand image as beach vacation paradises, which aids in attracting a steady stream of tourists; the fact that, compared to the Caribbean, West Africa generally has less developed tourism infrastructure, making it less accessible and attractive to tourists. (Have you ever tried travelling to Lakowe Resort in Lagos?); and the fact that there is the issue of political instability which discourages tourism investment and deters tourists, something that most of the Caribbean, with the notable exception of Haiti, appear to have sorted.

Coastal road projects planned for West Africa have the potential to bridge this gap by boosting accessibility by providing improved transportation links along the coast, which will make it easier for tourists to travel between destinations and facilitate multi-country itineraries.

To maximise the impact of these projects, competent policy and execution frameworks are crucial, and this is achievable by collaboration between governments and relevant investors like the Landmark Group that have already shown a clear commitment to the sector and can work with government, and local communities to develop sustainable and mutually beneficial policy models that go beyond tourism and encompass sectors like coastal town planning, infrastructure, and aquaculture.

However, rather than having these positive, constructive conversations and actions, what we have is the ongoing situation where the Landmark Beach Resort and the $200 million reportedly invested in it since inception are at risk because the resort is facing demolition, to make way for the first phase of the 700-kilometre coastal highway project that is supposed to be helpful to businesses like it after the Lagos State government issued a demolition notice to the resort in late March 2024, citing that the property falls within the designated right-of-way for the road project.

The resort's owner, Paul Onwuanibe, argues that the land was acquired before the coastal highway plans were formulated and that the demolition would cause significant economic damage to the resort, which employs more than 4,000 people and contributes substantially to the local tourism economy and has spurred investment in similar beachfront businesses along the Oniru axis, boosting the state and national economy through taxes and tourism revenue.

The PDP presidential candidate in the last elections, Atiku Abubakar, has strongly criticised the handling of the Lagos-Calabar Coastal Road project, calling it wasteful and potentially fraudulent. Atiku pointed out the inconsistency in the statement by the Minister of Works, Dave Umahi, regarding project funding and the lack of clarity on the government's counterpart financing and decried the lack of legislative oversight and scrutiny for a project of this size.

He also drew attention to the relationship between the businessman, Gilbert Chagoury and President Bola Tinubu, challenging claims of ignorance and urging for a thorough investigation into potential conflicts of interest over the initial plan alterations after Mr. Chagoury’s Hitech was awarded the contract without competitive bidding. Mr. Chagoury also happens to be the owner of the Eko Atlantic City, and the PDP candidate implied that the contract award is because he (Mr. Chagoury) wants to extend the Eko Atlantic City. Landmark just happens to sit in front of the potential. While this allegations are unproven, they hint at the risks that come with doing business in Nigeria, which so many investors, foreign and domestic, will take note of.

Demolition of a successful multi-million-dollar business would discourage future investment in coastal tourism. The Nigerian government must embrace a collaborative approach, working with established institutions like Landmark to ensure the Nigerian section of the coastal highway plan is well-designed, business-friendly and backed by clear regulations, investment incentives, and transparent land-use policies that can attract and retain investors in the tourism sector.

There is also the need for clear coastal Land Use Guidelines to establish transparent land use regulations that clearly define permissible activities in different coastal zones. This would help provide certainty for investors like Landmark and minimise land disputes like the one currently troubling the company and creating uncertainty in the hearts of potential local and international investors.

This framework would also have to establish clearly defined procedures for land acquisition and dispute resolution mechanisms between private investors and the government to give investors substantial ownership rights and prohibit arbitrary land revocation through the provision of clear land titles and a transparent process for eminent domain.

It would also set Planned Development Zones that allow investors like Landmark to operate within a predefined framework with minimal risk of future disruptions due to unplanned infrastructure projects or offer fair compensation in situations where disruption is unavoidable because of the impact on the greater good.

Several coastal nations have implemented clearcut seafront development policies and plans to manage construction along their coastlines. For example, the Australian government established the Coastal Management Policy in 1995, which provides a national framework for ecologically sustainable development of coastal areas. This policy emphasises the importance of balancing economic development with the preservation of coastal ecosystems.

The United States Coastal Zone Management Act of 1972 is a federal law that encourages states to develop coastal management programmes that address issues such as water quality, habitat protection, and public access. These programmes help ensure that coastal development is carried out in a coordinated and sustainable manner.

By implementing similar measures and, crucially, honouring them, Nigeria can create a more attractive environment for coastal development, fostering collaboration between the public and private sectors for sustainable and successful seafront projects.

The Barcelona Port Authority and Carnival Corporation partnership also comes to mind. In 2009, Barcelona Port Authority partnered with Carnival Corporation, the world's largest cruise line operator, to expand and upgrade Barcelona's cruise port facilities. This collaboration increased the port's capacity to handle larger cruise ships, leading to a significant rise in cruise tourism and economic benefits for the city. In another Spanish city, Malaga, the City Council collaborated with Malagaport, a private company managing the Malaga Port, to develop a new promenade and leisure area around the port that was completed in 2014 and has transformed the Malaga waterfront into a vibrant hub for locals and tourists, attracting restaurants, shops, and cultural attractions.

These partnerships show the win-win potential of PPPs in coastal development. The private sector brings in investment and expertise. On its part, the public sector steers the project towards long-term benefits for the community in an ecosystem with clear regulations, collaborative planning, investment incentives, and a commitment to the rule of law that work together to foster successful coastal development.

Nigeria would benefit from these conversations and actions as it looks to make optimal use of its nine coastal states. While we work on having them, the Landmark situation will be better handled by altering the road plans to reroute the coastal road behind the resort rather than through the beachfront of Landmark.

Rerouting the coastal road to avoid destroying landmarks and seafront businesses like Landmark offers several advantages over the original plan. The economic benefits are obvious. It preserves existing businesses and safeguards jobs, tax revenue, and economic activity already generated.

There are also environmental considerations that we should be mindful of if roads that carry a lot of people and goods are built too close to the seafront. We do have coastal roads around the world that do not hug the coastline, like The Great Ocean Road in Australia, which winds along the coastline but maintains a distance from beaches and tourist areas, and California's Pacific Coast Highway, which utilises existing roads and avoids cutting directly through beachfront properties.

Spain's N-340 also incorporates tunnels and bridges to minimise impact on coastal towns and environments. The Nigerian government can achieve its infrastructure goals by following these examples while preserving extant economic and social value.

Cheta Nwanze is Lead Partner at SBM Intelligence.