Need to harness Kano Free Trade Zone to boost Nigeria’s economy, attract investors

The Kano Free Trade Zone (KFTZ) has remained unutilised despite their proposed economic advantages, and their failure to attract investors can be attributed to several factors, one of which is due to inadequate infrastructure. Adeola Tukuru reports

Nigeria has a total of 14 operational zones of which the KFTZ is part of and these zones are targeted as potential stimulators for Nigeria’s long-awaited industrial revolution.

The KFTZ is one the special economic zones where goods may be landed , handled, manufactured or reconfigured and re- exported without the intervention of the customs authority.

One of its objectives is to allow interested persons to set up industries and businesses within the zones with a major objective of exporting the goods and services manufactured or produced within the zones and to provide an internationally competitive duty free environment for export production at a low cost.

Companies that began operations in the zone

Some of the companies that began operations at the zone include; producers of Xquizite bottle and sachet water who began operations in June 2015. Marshal Biscuits FZE, producers of Buttermint Biscuits began operations in January, 2016.

Others are Afric packs FZE, producers of sacks who began operations in October, 2017. Nurture and foods, FZE, producers of Soy- Kunu, Soykunu extra and Soyalac, began operations on 11th of November 2015 and Coral integrated FZE, which is into recycling and crushing of materials began operations in 2014.

Challenges

Despite achievements, the zone is still facing some challenges such as lack of efficient railway to ease the transportation of goods from the zones , lack of accessible roads , epileptic power supply among others .

Though, according to the General Manager of Kano Zone, Zagana Hassan, the zone has recorded many developments under the leadership of the Acting Managing Director Nigerian Export Processing Zones Authority (NEPZA) Engr Terhemba David Nongo which include the allocation of a special intervention fund for the development of infrastructures in the zone, the presence of joint task force in the zone to enhance the activities of the zone.

Federal Government intervention on KFTZ

 Hassan said the Federal Government has started giving attention to the Zone , sighting an example of the 2016 and 2017 bugets which focused on infrastructural development such as road, power , investors suits to the KFTZ.

In a chat with newsmen recently, he said “We are expanding huge sums on infrastructure such as the warehouse , factory building and water supply.

“Things have starting to develop at the zone and as a result of that a lot of investors have started trooping in because they have seen that the federal government has started paying much attention to the zone, ” he said.

On forex from exports

Others are foreign exchange from exports of products to Germany, South Africa , South Korea etc also tremendous improvement on Foreign Direct Investors like China, India , Egypt etc.

The Acting Managing Director NEPZA Engr Nongo who confirmed this said Four trade zones recently established in the country will attract $15 billion worth of Foreign Direct Investment (FDI) into the nation’s economy.

Engr Nongo explained that 15 out of the 39 trade zones in the country are currently operational while application for the establishments of additional zones to boost the economy of the are undergoing various processes.

According to him, NEPZA has so far licenses 39 free trade zones spread across the country and 39 free trade zones are truly up and running.

On the competitive advantages of KFTZ

He said Kano is an industrial area with it location. It also has a very large population, the the textile and leathers are produced in North and the labour is very cheap amongst others

He said the Federal Government is set to reposition the Kano Free Trade Zone to run on its full capacity and contribute massively to the Gross Domestic Product of the country as obtainable in other claimed countries like Dubai and China.

The commitment of NEPZA, to ensure funds allocated by the federal government are prudently expanded, which also appears to have won the confidence of private sector investors to leverage on the potentials of the Zone in line with the federal government industrialization’s drive.

The decision of NEPZA is to roll out incentives on the free trade zones has given a lifeline to most industries that were already biting the dust in Kano due to the harsh economic environment and has also serve as 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.

 Some of the incentives includes complete exception from payment of all government taxes , rates, custom duties and levies; one stop approvals for all permits, operating licenses and incorporation letters.

Other incentives include duty free, tax free import of raw materials and components for goods destined for re-export, permission to  100 percent of manufactured, assembled or imported goods into the domestic Nigerian markets, among others .

He said investors are confidence in the zone has never been so high  adding that the standardizing our Free Zones by giving them world -class status, especially in the area of infrastructural provision adding that  NEPZA is proving that where there is will , there will be headway.

Commendation by House of Representatives

These prompted commendations from the House of Representatives Committee on Industry, Trade and Investment during a recent visit to the KFTZ.

The Committee, led by it acting Chairman, Solomon Bulus, Muhtari Chiromawa, Muhammadu Bala among others commended the management of NEPZA for the massive infrastructural development at the KFTZ .

The immediate past Minister of Industry, Trade and Investment, Dr Okechukwu Enelemah said the strategic importance of the zone cannot be overemphasized as the Economic Recovery and Growth Plan (ERGP) tagged Kano as one of the Special Economic Zones as a strategic platform to accelerate the implementation of the Nigeria Industrial Revolution Plan.

Blueprint observed that some SEZs, such as Ladol, Onne, and Lekki Free Trade Zone, have thrived over the years. However, most of the approved SEZ enterprises are companies operating within the oil and gas sector, while few manufacturing companies currently operate in the SEZs.

The minister also said a Chinese company, Ruyil Group already signed a Memorandum of Understanding with the federal government to invest $2 billion on first ever cotton value chain industry will likely berth on the trade zone .

He said these investments comprises of aggregation and off take of cotton from farmers for gunning, spiking and weaving and manufacturing of at least 300 million meters of African print which we meet 20 percent of West Africa demand .

With the increasing momentum of industrial activities in KFTZ , Nigerians will begin to reap massively from the Zone in not too distant future.

Some of the benefits include that the Free Trade Zones will contribute minimum of 20 percent to the country’s GDP as well as full repatriation of capital and profits.

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