Kano Free Trade Zone Birthing Silent Industrialisation Revolution

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BY ALU KINGSLEY,

Kano Free Trade Zone put in place by the Nigerian Export Processing Zones Authority (NEPZA) is located on 262 hectares of land at the Panisau area of Ungogo local government area  of Kano State. It was established in 1998 and its area of specialisation is warehousing, services, logistics and manufacturing. One of the  objectives for establishing it is to allow interested persons to set up industries and businesses within the zones with the aim of exporting the goods and services manufactured or produced within the zone and to provide an internationally – competitive duty free environment for export production at a low cost.

Interested persons can set up industries and businesses at a low cost and tax-free environment, with a major objective of boosting manufacturing and export activities in the country. The zone is also to address challenges companies encounter in the areas of infrastructural development, overheads associated with capital intensive ventures. At the moment, KFTZ is birthing a silent industrial revolution going by the facilities it has attracted in recent times and the increasing number of industries that now hold sway in the area. Activities in the zone have not gone unnoticed, just recently, members of the House of Representatives’ Committee on Industry, Trade and Investment led by its acting chairman, Hon. Solomon Bulus, and other members that include Hon. Muhtari Chiromawa, Hon. Muhammadu Bala, among others poured encomiums on the present management of NEPZA led by its acting managing director, Mr Terhembe Bongo, in repositioning the zone for the massive infrastructural development. Also testifying recently about this massive development at the KFTZ , general manager of the zone, Hajia Yagana Hassan, stressed that the federal government was now giving much attention to the zone as reflected in 2016 and 2017 budgets in terms of infrastructural development like power, water, road network, investors suites. “They have started developing that, and warehouses are being built.We are expanding huge sums on infrastructure, especially in the area of warehousing, factory building, and water supply.

“Things are really looking up for the zone. And as a consequence, a lot of investors are coming because they have seen the federal government has given the zone much attention and more money has been pumped in so as to promote the zone,” she added. Some of the companies in operation at the zone include: Marshal Biscuits FZE, producers of Buttermint Biscuits began operation in Jan, 2016. Afrique Ventures FZE, producers of Xquizite bottle and sachet water began operation in June, 2015. Afric Packs FZE, producers of sacks began operation in Oct, 2017. Nurture All Foods FZE, producers of Soy-Kunu, Soykunu extra and Soyalac began operation on November 11, 2015 and Coral Integrated FZE, which is into recycling and crushing of materials. They began operation in 2014 and a host of several others.

It instructive to note that the commitment of NEPZA to ensure funds allocated by the federal government were prudently expended, may have also won the confidence of private sector investors to leverage on the potential of the zone in line with the federal government’s industrialisation drive. Immediate past Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, captured the  strategic importance of the zone when said the ministry intends to unlock the potential of the special economic zones for Nigeria’s economic recovery and growth. Enelamah expressed government’s desire to use export – oriented  SEZs to double government’s manufacturing output to 20 per cent of GDP within six years and set up production hubs across the country in partnership with regional aid banks, generate $30billion in export earnings annually by 2025,improve the utilisation of Nigeria’s factor endowments and comparative advantages,create local models of global best practice in the provision of hard and soft infrastructure and an enabling business environment. He was also quick to point at the financial benefits to investors which include,3 to 5 – year corporate income tax holiday, Export Expansion Grant,10 per cent investment allowance on plant and machinery, 0 per cent import duty on equipment and inputs till 2019, 0 per cent import levy for 5 years for 50 per cent of fabric input imports, equivalent to output for companies with over $ 10million and 500 direct Nigerian employees, and negotiated special incentive for Kano Free Trade Zone Birthing Silent Industrialisation Revolution strategic investments.

As if that is not enough, Enelahmah added that one-stop approvals for permits, operating licenses and incorporation papers, 100 per cent foreign ownership of investments, 100 per cent repatriation of capital, profits and dividends, waiver of all imports and export licenses, permission to sell 25 per cent100 per cent of SEZ goods into the domestic market, for prohibited items in the customs territory, SEZ goods are permitted for sale upon meeting 35 per cent domestic value addition requirement were also the business benefit interested investors stood to enjoy. Addressing the media in Abuja, he described the attendant benefits for investors in the SEZs as too good and a demonstration on the part of government to spur Nigeria’s rapid industrialisation with NEPZA as the coordinating agency. The former minister, who was all praises to the management of NEPZA, noted that the Economic Recovery and Growth Plan (ERGP) identifies special economic zones, particularly the one in Kano, as a strategic platform to accelerate the implementation of the Nigeria Industrial Revolution Plan (NIRP). “If you visit the economic zones in Kano and Calabar, you will see the level of infrastructures that are there and the activities going on,” Enelamah said.

Though from 1992 till date NEPZA has licensed 40 free trade zones that have attracted over $20 billion Foreign Direct Investment (FDI) into the economy, only 14 are at present operational, including the Kano free trade zone. Impressed by this level of development at the KFTZ , stakeholders agree that NEPZA’s decision to roll out incentives in the free trade zones has given a lifeline to most industries that were already biting the dust in Kano due to harsh economic environment. In addition also, It has served as a magnet for both local and foreign investors as the zone which is situated on 232 hectares of land has only about 32 per cent of the land utilised. Of interest also is the signing of a Memorandum of Understanding (MoU) by a Chinese company, Ruyil Group with the federal government to invest $2 billion on the first ever cotton value chain industry in the country.

Enelahmah said their investment would comprise aggregation and off take of cotton from farmers for ginning, spinning and weaving and manufacturing of at least 300 million meters of African print, which would meet 20 per cent of West Africa’s demand. Commenting on the renewed quest by the federal government to reposition the Kano Free Trade Zone to run on its full capacity and contribute massively to the country’s gross domestic product (GDP)  as obtained in other climes like Dubai and China, acting managing director of the Authority, Engr Tehermba Nongo, confirmed recently in Abuja that investors’ confidence in the zone has never been so high. “Standardising our free zones by giving them worldclass status, especially in the area of infrastructural provision, may be daunting, but with presidential support, NEPZA is proving that where there is will, there will be headway,” he said. But despite the achievements, the zone is still grappling with the challenges of lack of efficient railway to ease the transportation of goods to and from the zone, epileptic power supply, lack of offshore banking in the zone, lack of in-depth knowledge of the free zone scheme by the government agencies like NAFDAC, SON, NDLEA etc. Nongo said there was the need  for an efficient railway system to ease the transportation of goods to and from the Kano free trade zone. His concern was anchored on the premise that lack of railway has made it impossible for most products to be transported in and out of the zone. He however thanked the government for reviving Kano free trade zone and getting it into full operation, but said more awareness on the benefits of free trade zones had become necessary as many investors and manufacturers were still ignorant of it. With the increasing momentum of industrial activities in KFTZ, many experts believe Nigeria would  begin to reap massively from the zone in not too distant future.

 

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