How tax evasion, poor management ruined Shiroro Hotel

The dilapidation of Shiroro Hotel has again heightened concerns about the level of decay of government facilities in Niger State, Daily Trust Saturday reports.

The Shiroro Hotel, which was unveiled on May 4, 1981, was strategic in Minna, the state capital until the 2000s when it began to lose its glory. It has 216 rooms, 3 halls, a shopping mall, bar and a restaurant. 

Daily Trust gathered that Niger State owns over 40 per cent share in the hotel, while Arewa Hotels and the New Nigeria Development Company jointly own 38 per cent share. Individual shareholders were the late Aminu Bako Kontagora and AB Umar.

A member of staff who spoke with our correspondent said the hotel was generating over N10 million on a monthly basis before it collapsed due to debts amounting to N300 million.

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When our correspondent visited the hotel, he was not allowed access into the rooms by the vigilantes on guard. He was asked to seek permission from the Niger State Ministry of Tourism and Culture. 

It was gathered that the facility was sealed in October 2017 by the Federal Inland Revenue Service over tax evasion. 

Since the collapse of the facility, its members of staff, numbering over 100, told Daily Trust Saturday that they were neither laid off nor paid their salaries for the past 95 months. 

Also of concern to residents of the town, especially those around the hotel, is the high rate of drug abuse going on in the facility. They alleged that criminals were using the facility as a hideout, as rooms were being given to individuals who bring women and girls on ‘short time’ basis.

Our correspondent also found that the place is being used for church services and wedding receptions without the knowledge of the authorities.

A staff told our correspondent that the hotel had been vandalised and television sets, air conditioners, mattresses, beds and other vital things in all the rooms stolen, while the money generated from individuals goes to individual pockets.

The secretary, National Union of Hotels and Personal Services Workers, Shiroro Hotel branch, Ibrahim Sule, said many members of staff had died of frustration and hardship after many years of non-payment of salaries and other entitlements.

“The hotel has over 100 members of staff, and 90 per cent are indigenes of Niger State. It was doing well and patronised by the state government and organisations, but eventually, the state started owing the hotel, which, on the other hand, was owing the Federal Inland Revenue Service (FIRS). The FIRS eventually sealed the facility, and the Arewa Hotels, which was managing it, handed it over to the state and everything collapsed,” Sule said.

A staff member, Mohammed Adamu, said the state government should have used the billions of naira expended by the last administration to start an abandoned five-star hotel to give Shiroro Hotel a facelift.

“We don’t have a five-star hotel in the entire Minna, the state capital. Our former governor, Mu’azu Babangida Aliyu, should have invested the billions of naira he used in starting a new five-star hotel, which was eventually abandoned, to at least give this one a facelift.”

Another staff member, Yakubu Shehu, told Daily Trust that, “Many staff have lost their wives because they could no longer provide for their families after many years of service in the hotel. Some people who later nursed the idea of joining private security outfits to find a means of surviving were not taken because they were already too old for the job. Some staff now beg to feed.”

A resident of the area, Dr Kamar Hamza, said Shiroro Hotel was commissioned by former President Shehu Shagari as one of the Arewa Hotels conglomerates, and it served as a prestigious symbol of hospitality. 

“It was of high standard at inception. The challenge has been lack of maintenance culture and proper management of government enterprises. When the hotel was going down, the workers were supposed to be laid off, and then, work out their entitlements. 

“The state should either invest fund in the hotel and run it as a commercial enterprise or privatise it to avoid further wastage. However, it should not be sold at a giveaway price,” he said.

The managing director, Arewa Hotels Limited, Mohammed Bala Yunusa, however, told our correspondent on phone that the New Nigeria Development Company was already discussing with an investor to take over the management of the hotel. 

He said while the facility had a debt of N300m to clear, including tax arrears, Niger State, the major shareholder, was the largest debtor of about 70 per cent, making it difficult for the hotel to stand the taste of time as a business entity.

“Every decision on the hotel lies on these three major shareholders because they have the majority of board representation. Like any other hotel, Arewa was managing Shiroro was under a lease agreement. But things went wrong and the hotel was owing a lot of debts, out of which 70 per cent was owed by the Niger State Government. 

“The hotel did not stop operating because of lack of capacity on the side of the managers but because we provided services and could not recover most of the money. In total, Shiroro Hotel is indebted to about N300m to the Federal Inland Revenue Service, both on tax liabilities, staff entitlement and whatever,” he said. 

Yunusa explained that the New Nigeria Development Company made a huge investment to see that the hotel survived and was waiting for board’s decision to capitalise the money as a shareholder in the hotel.

“I want to put it on record that the success of any company is on the shoulders of its management. Under this lease agreement, there are terms and conditions, which we have been honouring. We were paying our lease obligations as stated in the agreement, and we expect that from those lease obligations we have been paying to the hotel, its owners would take it upon themselves to see that the facility is always kept so that it stands the test of time. We cannot lease the hotel, manage and repair it at the same time. If we honour our lease obligations we expect the shareholders of the hotel to do the needful. 

“At a time when facilities in the hotel were decaying, we brought it to the notice of the board, which the Niger State Government is part of, but nothing was done. And any hotel that doesn’t have facilities to stand the test of time will surely run out of business. There were a lot of obligations, not just tax. Currently, we are battling with cases against Shiroro Hotel filed by staff and third parties.

“We expected that whatever would go wrong in the management of the hotel, these three institutions who are key stakeholders should be responsible. I am not exonerating Arewa Hotels as a manager and institutional shareholder for things that went wrong at Shiroro Hotel, but, there shouldn’t be a blame game. When that management agreement was terminated, the hotel was handed over to someone,” he added. 

Efforts to get the state government to speak on the state of the hotel were unsuccessful. When our correspondent visited the State Tourism Corporation, he was asked to go to the Ministry of Tourism and Culture. His visits to the ministry four times to get either the permanent secretary or commissioner to speak were not successful as he was told each time that either the commissioner or the permanent secretary was not in office. When he finally met the commissioner during the unveiling of the Medium-Term Strategic Plan of the Hydro Power Producing Areas Development Commission (HYPPADEC) at the Justice Idris Legbo Kutigi International Conference Centre, she required that a date be fixed for her to speak. But after a series of follow-ups to her ministry, our correspondent was told that both the commissioner and the permanent had travelled to Logos for NAFEST.