Ghana's tourism sector is expected to grow at an average rate of 4.1% over the next two decades, indicating a need to build more tourist accommodation. There is an opportunity to participate in the development of a beach complex in Kokrobite, a popular tourist destination about 30kms west of the Ghanaian capital city of Accra.
The fishing village of Kokrobite is a popular destination for tourists seeking a quiet, tropical paradise with beautiful sandy beaches. There exists a burgeoning demand for day, weekend and longer-term accommodation and European standard restaurant and entertainment facilities, particularly near the beachfront.
Investment opportunity
Completion of the construction of the Kokrobite Inn, a 16-chalet resort with bar, restaurant and shops. The complex is situated on the outskirts of Kokrobite, located on a hilltop a few hundred metres from the beach, with an unobstructed view of the Atlantic Ocean.
Project description
Kokrobite Inn will be a gated, secure complex. The complex will feature 16 chalets (each with bedroom and ensuite bathroom), together with a main three storey building, splash pool, other amenities, ample parking and landscaping. Substantial, underground and roof-mounted backup fresh water storage tanks, a 3-phase electrical transformer and large generator will be provided.
The main building's ground floor will comprise a gallery of seven shops overlooking the ocean. These will include a coffee bar, mini-market, communications centre, bakery, pharmacy, beauty salon and travel agency office/FOREX bureau.
The first floor will be dedicated to a spacious bar and restaurant, with full glass frontal aspects and large terrace area, boasting incredible views up and down the coast and of the Gulf of Guinea and the Atlantic Ocean, whilst the second floor will comprise a 3-bedroom flat to be occupied by the resort management.
Project status
The sponsors contracted a British project manager with substantial experience in civil engineering to supervise the work in order to ensure adherence to international building standards and specifications. Work on the project is therefore semi-complete, but suspended owing to lack of funds.
The site was levelled and the perimeter walls, all building foundations, septic and underground bulk fresh water storage tanks have already been laid down. The infrastructure for all 16 chalets has been completed to roof level, whilst one pair of chalets is complete with internal fittings. The site presently supports one dwelling house occupied by the project sponsor’s family, various staff quarters and an operational beauty salon.
Chalets under construction
Outstanding
construction work includes the installation of 3-phase electricity (transformer and generator), completion of 14 chalets, erection of the main building, installation of the splash pool and landscaping. A complete list of the remaining work is available in the detailed business plan.
Regulatory issues and documentation
The project is supported by government agencies, including the Ghana Tourist Board, Town and Country Planning, Accra Metropolitan Assembly, Internal Revenue Service, Ghana Investment Promotion Centre, Ghana Immigration Services, Bank of Ghana and the Environmental Protection Agency.
Regulatory and other formalities already completed in connection with the project include the following:
• Title Deeds to the land
• Land Registration Certificate
• Building Permit
• Company Registration
• GIPC
Registration - in progress
• Company Bank account set up
• Tourism Board Hotel License – applied for
Ownership
The site (with 96 years remaining lease on the land) has been under the full ownership and management of Geoff Connor and family since 2002. The existing business, owned 100% by the present shareholders, has no liabilities or debt.
Financial
The project's estimated total cost is $600,000, which includes the sponsor’s current investment of approximately $200,000 and debt and/or equity of an additional $400,000 to cover the cost to complete the hotel (estimated at $150,000), plus equipment and fittings (estimated at $250,000).
Full details of how the new funds will be disbursed are included in the business plan, but the project is a sound
financial investment. The estimated IRR according to the projections is 52%. The projected cash-flows are positive and the business will be profitable whilst the debt/equity ratio is forecast at an acceptable 60/40.
The costs are based upon architectural and engineering estimates from the Accra-based architectural firm of David Tettey and Investment Management specialists, AIMS Ltd. The construction period is anticipated to be 12 months from date of signature of the financial package.
Project justification
Ghana’s tourism sector is expected to grow at an average rate of 4.1% over the next two decades, driven largely by the country’s unique historical, cultural and natural attractions. In
addition, Ghana enjoys the unique status of the most frequent initial point of entry for Westerners visiting Africa for the first time.
As with Gambia, which has made a substantial investment in an ever-growing tourism industry, Ghana is only a 5-6 hour flight from Europe and is also a Mecca for those in neighbouring countries such as Nigeria, where no such facilities currently exist. Ghana is also now an oil producing nation, therefore the need for increased and improved accommodation and other facilities has increased dramatically in the last 18 months.
Growth in this sector underscores the need for accommodation and other facilities to service the increasing number of visitors. The Ghana Tourist Board estimates that at least 8,000 additional rooms are needed within the next six years and intends to initiate a major campaign to promote the country as a tourist destination through popularising package tours and charter airlines.
The Kokrobite Inn
will contribute to meeting the demand for hotels on or near beaches, particularly since it is currently a weekend getaway for people living in Accra. Its location and the quality of services to be provided will set it apart from other establishments in the area.
Chalets near completion
The Kokrobite Inn will also provide businesses in Ghana and neighbouring countries with a unique, seaside, relaxing, high class venue for business conferences and an area will be set aside on the first floor for conferences for up to 40 people.
Tourist attractions in the vicinity
Kokrobite itself has beautiful and virtually empty beaches, which are a magnet for tourists. Other attractions include the Academy of African Music and Arts, which provides dance and drumming shows and schools.
Bird and turtle nest watching are also very popular.
Kokrobite beach
There is a wealth of historic castles and forts (many associated with the infamous slave trade), wildlife protected areas and National parks, magnificent waterfalls, the ancient rainforest and high level walkway at the Kakum National park, the Akoshombo dam and Volta Lake; and the National Museum. Hiking, cave exploration and bird-watching are also increasingly popular.(http://www.ghanaweb.com/GhanaHomePage/tourism/)
Incentives
The Ghana government, through the Ghana Investment Promotion Centre (GIPC),
provides significant fiscal incentives to tourism businesses in the form of tax holidays, loss carry-forwards, customs duty and VAT relief and liberal foreign exchange codes. The incentives are supported by a stable political environment conducive to investment.
For further information on the Kokrobite Inn contact:
Geoff Connor
Tel: +27 72 934 6966 or +27 11 517 7159
Email:geoff.connor@orange-ftgroup.com
