The FINANCIAL — Lagos, Nigeria, June 20, 2011—IFC, a member of the World Bank Group, today announced the commitment of $14.9 million to Moorhouse Properties Limited and its subsidiary AM Hotels Limited to develop four hotels in Nigeria.
The investment will create jobs and improve Nigeria’s business infrastructure by increasing the availability of quality, affordable accommodation.
IFC is providing $7.4 million in equity to MPL and a $7.5 million loan to AM Hotels Ltd. The investment will enable MPL to build two Ibis hotels, introducing the internationally recognized brand to Nigeria. The Ibis hotels will be managed by the French hotel group, Accor, one of the world's leading hotel operators with about 4,000 properties under management in 90 countries.
MPL will also expand its network of locally branded ‘Travel House’ hotels to add two properties. The new hotels will help meet the increasing demand for mid-market and budget business accommodation in Nigeria.
Mr. Koye Edu, Executive Director of MPL, said, “Nigeria’s growing economy attracts many business travelers, but construction of quality hotels has not met demand. Partnering with IFC will help MPL offer, comfortable and moderately priced lodging to business and leisure travelers through our budget hotels such as our Travel House, while leveraging the international experience of Accor’s Ibis hotels.”
Solomon Adegbie-Quaynor, IFC Nigeria Country Manager, said, “IFC is committed to creating opportunity in the private sector in African economies and the hotel industry offers several development benefits. Hotels create thousands of jobs and provide training for a variety of posts – from low-level employment to higher level technical and management positions. The foreign currency and tax revenue generated from hotels translates into better infrastructure and services. Hotels can also help increase revenues for local farmers and producers by linking them to the supply chain.”
The Nigerian government has targeted business infrastructure as a foundation of its economic growth and development plan. However, domestic and international lenders for business infrastructure projects, such as hotels, do not have adequate access to affordable long-term capital. The shortage of business infrastructure is an obstacle in Nigeria, at a time of growing interest in business opportunities and investment in the economy.
Tourism accounts for an estimated 9.1 percent of global GDP and 8.8 percent of jobs, according to the World Travel and Tourism Council. Despite its potential, Africa accounts for less than five percent of global travel-related spending.