invigorate africa! presented by bastiat capital
TRANSCRIPT
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I N V I G O R AT E A F R I C AB A S T I A T C A P I TA L P R E S E N T S :
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H Y P O T H E T I C A L :
Individual inherits 10,000 acres of beach front property. Condition: None of it can be sold to raise
capital for development.
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O P P O R T U N I T Y:
How does one partner with experienced investors to take advantage of the property?
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C A P I TA L I Z E :
Leasehold: Developer buys the right to occupy land for a set period of time (often measured in decades).
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L A N D O W N E R R E C E I V E S
• Long-term guaranteed annual lease payment
• Developer agrees to spend a minimum amount developing the property
• Developed property returns to landowner after leasehold expires
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W I N - W I NL e s s e e r e c e i v e s r e t u r n o n c a p i t a l e a s i l y e x c e e d i n g c o s t o f i n v e s t m e n t
L a n d o w n e r m a i n t a i n s l o n g - t e r m o w n e r s h i p o f l a n d
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P R E C E D E N T:
China leased Hong Kong to Great Britain for 99 Years
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H O N G K O N G : A N E C O N O M I C B R I D G E
• Hong Kong transferred back to China in 1997
• Hong Kong’s 1997 GDP: $212 billion, China’s 1997 GDP: $953 billion
• Hong Kong’s Population was only 0.6% of China
• Hong Kong’s GDP was an incredible 18% of combined GDP
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H O N G K O N G ’ S I N F L U E N C E
• Hong Kong influenced China’s adoption of capitalist ideals
• Hong Kong remains the ‘gateway to China’ for further investor capital
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A N O T H E R P R E C E D E N T:
United States built the Panama Canal using similar leasehold model
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PA N A M A C A N A L
• Hay-Bunau-Varilla Treaty (1903) granted the U.S. rights to build & administer the Panama Canal Zone and its defenses
• Construction cost the U.S. $375 million (>$9 billion today) making it the most expensive construction project in U.S. history
• The U.S. paid Panama $250,000 per year
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M U T U A L LY B E N E F I C I A L
• Canal revolutionized world-shipping patterns - the trip from San Francisco to N.Y. became 7,800 miles shorter
• Without a leasehold arrangement, this level of spending and development would not have been possible
• 65 years since construction, the U.S. returned full control of the Canal to Panama in 1979
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S H E R B R O I S L A N DS I E R R A L I O N E - H O N G K O N G R E D U X ?
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S H E R B R O I S L A N D
• Located along the Atlantic Ocean
• 230 Square Miles - 1/2 size of Hong Kong
• More than 65 miles of tropical beaches
• Earmarked by Sierra Leone’s Ministry of Tourism for tourism development
• Population only 29,000
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O P P O R T U N I T Y:
Norway has a sovereign wealth fund totaling $900 billion. And very cold winters.
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C A P I TA L I Z E :
Leasehold: Sierra Leone negotiates a multi-decade leasehold on Sherbro Island
with the Norwegian Government
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W I N - W I N
N o r w e g i a n s i n v e s t u s i n g t h e i r $ 9 0 0 b i l l i o n s o v e r e i g n w e a l t h f u n d t o s e e k a n i n v e s t m e n t r e t u r n a n d c r e a t e a w i n t e r r e f u g e .
S i e r r a L e o n e b e n e f i t s f r o m a g a t e w a y t o f u r t h e r i n v e s t m e n t f r o m N o r w a y a n d o t h e r w e a l t h y c o u n t r i e s .
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P O S S I B L E A R R A N G E M E N T
• Siera Leone negotiates a 66-year leasehold on Sherbro Island with Norwegian government
• Norway commits to invest $20 billion over the leasehold period.
• Norway pays Sierra Leone $5 million to maximum of $50 million, based on 0.25% tax on property values of $20 billion
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E N D R E S U LT
• Assuming private investment matches Norwegian government investment at 3:1, Sierra Leone will receive back a developed island worth more than $80 billion
• Properties would include tourist attractions, airport, hospitals, residential communities, schools, office complexes
• Facilitate further successful external investment in other parts of Africa
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C O N TA C T
Albert Meyer President, Bastiat Capital
972-267-2031 [email protected]
Ejike Okpa The OKPA Company
972-960-1417 [email protected]