In furtherance of efforts at diversifying the state’s economy away from oil, the Rivers State government, through its Tourism Development Agency (RSTDA), is targeting over N100 billion annual revenue from tourism receipts.
The ambitious revenue target, which could increase to trillions of naira in a few years, according to RSTDA, would be realised through revenue-based financing (RBF), an investment vehicle deployed by financial institutions (banks) to finance bankable marketplace commodities.
Speaking on the financing model, Yibo Koko, director-general/CEO, RSTDA, explains that the RSTDA revenue-based finance strategy would drive 10 commercial banks to finance 10 tourism commodity marketplaces with N100 billion economic stimulus across a four-year structured investment framework at a guaranteed 100 percent revenue rate of return.
“Revenue-based financing is not a loan or a grant. It is simply a marketplace fiscal instrument using shared revenue-partnerships to deploy strategic commodities with a high profitability profile for the investing partners,” Koko states.
Highlighting the abundant tourism potential across the state, the RSTDA boss notes that the top 10 culture and tourism commodities have been identified, chosen from the 23 local government areas in the state and would be presented to the commercial banks and partners in the project.
Aside the 10 top bankable commodities, RSTDA is also targeting 10 culture and tourism products per local government area for a guaranteed return on investment.
To ensure a smooth take off the project, the RSTDA is working with a team of tourism industry consultants to create arts and culture tourism – marketplace mobile app, called ‘Tourivarian’. With the app in place, they will deploy 10 heritage tourism commodities across 50 weeks of mobile ‘tourivarian festivals to connect 2 million smart culture citizens in the state.
“This will generate in excess of N500 billion as tourism marketplace revenue,” Koko assures.
Speaking further on the rationale for the new focus on growing tourism revenue or the ‘green economy,’ as it is called in the globally parlance, the RSTDA chief executive says the state is looking beyond oil and now giving attention to the green economy on the realisation that globally today – it is the knowledge capacity, not so much of natural resources that hold sway.
Again, he states that aside the huge decline in the investment in Nigeria’s crude oil production due to oil theft and insecurities as well as oil losing its relevance globally in a pandemic ridden era, the green economy presents viable economic diversification option for the state.
Moreover, he is convinced that revenue based financing is the most progressive economic stimulus instrument to reboot tourism to boost the internally generated revenue (IGR) profile of the state by up to 50 percent.
As well, Plateau State is offering tour operators, destination managers and financial institutions opportunity to partner in improving on its many tourism products, marketing and sharing revenue accruing from their efforts.
The state, which is a once-thriving tourism destination in Nigeria, is opening up to private sector and their financial partners in a concerted effort to restore its past glory as tourists’ heaven in the country.
In line with the same financing model, Sterling Bank plc is setting aside N5 billion to funding viable domestic tourism products. With the fund, the bank is seeking to partner tourism businesses that have viable products to sell to the domestic market.
It would be recalled that the Nigerian creative industry and the tourism and hospitality sector have recorded rapid growth in the past few years and contributed more to the Gross Domestic Product of the country.
Consequently, the feats have increased interests and investments in the industry, which is acclaimed the second biggest employer in Nigeria by the International Monetary Fund (IMF).
The investments will increase in the post-COVID-10 pandemic era as tourism, acclaimed to be the lowest hanging fruit for economic diversification, is more resilient in times of economic crisis.
