Why Kano Free Zone Must Work Optimally – NEPZA

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Engr. Terhemba Nongo,is the Managing Director of Nigeria Export Processing Zones Authority (NEPZA). The Alumnus of the University of Nigeria has over 35 years Post-graduate experience in the design, construction and maintenance of engineering infrastructure, in general; and over 20 years’ experience in the design, construction and management of Free Zones (FZs).

Nongo, who doubles as General Manager (Business Development) has acted as MD/CEO twice in the past i.e. 30th August, 2012 to 28th January, 2013, and December 2016 to 18th April, 2017, spoke to journalists recently on latest developments at NEPZA, including on-going infrastructural works in the Zones, the licencing of six new industrial parks in each of the geo-political zones as well as NEPZA’s plans for the future. Industrialization Digest was there and brings you the highlights. Excerpts:

There is much quiet in NEPZA now. Nothing seems to be happening. Is it because there is no managing director now?

I am happy you say “nothing seems to be happening” – not that nothing is happening. Since you are not categorical, it means you don’t know. But since you are here, it means you want to know.

So, yes: it is quiet here, but we are not doing drama here. That is why, perhaps, you are not hearing noise from here. At NEPZA, we do the work; and allow the work to speak for us.

Second, as you may know, NEPZA is the prime regulatory/supervisory agency of Free Zones, Industrial Parks/Cities in Nigeria. This means the action is outside the Head-Office – the real action is in the Zones, where the Zones have been receiving (and continue to receive) a new lease of life.

As per the Authority not having a Managing Director, I don’t see the co-relation between that and what you term quietness. Government is a continuous thing – you can never have a break. This is because there are processes, infrastructures, frameworks and systems. It is these that make an institution or institutions.

So, there are institutional infrastructures or systems on ground that guarantee that work goes on – whether or not a substantive Managing Director is in office.

For instance, the Managing Director doesn’t work alone. His management team comprises the Directors or, in this case, the General Managers. And so even when there is a substantive Managing Director in place, when he is out of the country or on leave, the most senior General manager (Director) stands in for him in the temporary instance. And this is what is happening right now. I happen to be the most senior General Manager; and I am holding forth as Acting Managing Director. And, by the special grace of God, we are doing our best.

So, what really is going on in the Zones, sir?

Straight away, I will say: much. NEPZA has seen much development in the course of its existence, but it could have been better. But following the coming into office of President Muhammadu Buhari, things have been looking up. Before now, the most the Authority got in terms of budgetary receipts was N2billion! But under the incumbent President, specifically in 2017, for the first time in the history of NEPZA, the Authority received an unprecedented capital injection of N50billion – although only N20.5 billion was released. The same figure was again allocated to us in 2018. And from the budget estimates, we are expecting the same in this 2019. Consequently, there has been a corresponding spike in the activities in the Public Zones in Calabar and Kano, especially in terms of infrastructural development or renewal i.e. water, power, roads etc. By the time we are through, these public Zones would have world-class amenities or infrastructure; and invertors operating there too, who have issues with water or power, would heave a sigh of relief. And world-class investors would, therefore, be attracted to the Zones, and this, in leaps and bounds.

There is much talk about the Kano Free Zone lately. Can you give us an overview of what is happening there?

Thank you very much. Much is going on there in terms of on-going engineering and construction works: roads, power, water-supply, warehouses, investors’ suites, admin blocks and the like. And it is affecting investor-confidence as more investors are showing interest. Some of the Free Zone Enterprises (FZE), which started operations in the Kano Free Zone (KFZ), include:Afrique Ventures FZE, Marshal Biscuits FZE, Afric Packs FZE, Nurture and Foods FZE etc. Afric Packs FZE, which began work in October 2017, produces sacks. Marshal Biscuits FZE, the producers of Buttermint, began operations in January, 2016. Nurture and Foods FZE, the producers of Soy-Kunu, Soykunu Extra and Soyalac, began operations on the 11th of November, 2015. But there is also Coral Integrated FZE, which is into the recycling and crushing of materials. They began operations there as early as 2014. But the good thing is that the new wave of infrastructural development there is rekindling the interest of investors.

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Yes, things are looking up in the Zone. Yes, we are expending huge sums on infrastructure such as the warehouses, factory buildings and water-supply. And as a consequence, the Zone is set to welcome an influx of investors. Clearly, they have seen the determination of the Buhari government to turn around things and make the Free Zone scheme, especially Kano FZ, a world-class affair.

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The Kano FZ is strategic in a number of ways. It is an industrial area that is located in a sprawling industrial city. It has a very large human population. It is at the centre of the textile and leather business in Northern Nigeria. Labour is cheap and readily available. As the biggest market in Northern Nigeria, and the nation’s gateway to North Africa and beyond, Kano is strategic to Nigeria’s industrialization efforts. The significance of the Kano FZ, operating in such an environment, cannot be over-emphasized.

This is why the present Federal Government is passionate about repositioning the Zone in order that it may run on its full capacity and contribute, as obtained elsewhere in the world, to the Gross Domestic Product (GDP) of the country.

These considerations underscore the recent oversight visits of both the Senate Committee on Trade and Investment as well as the House Committee on Commerce to the Zone. The House Committee, led by it acting Chairman, Hon. Solomon Bulus, was full of commendation for NEPZA for its unalloyed commitment to infrastructural development of the KFZ. It is against this backdrop that the immediate-past Minister of Industry, Trade and Investment, Dr.OkechukwuEnelamah, asserted that the strategic importance of the Zone cannot be over-emphasized, pointing out that the Economic Recovery and Growth Plan (ERGP) has tagged the Kano FZ as a strategic platform that will accelerate the implementation of the Nigeria Industrial Revolution Plan (NIRP).

You may recall hearing the ex-minister also saying a Chinese firm, the Ruyil Group, already signed a Memorandum of Understanding with the Federal Government to invest $2 billion on first ever Cotton-value-chain industry that will likely berth in the Zone. So, we are determined to put the Kano FZ on the right footing. And the benefits would be huge – be it in terms of economics, job-creation, security, economic development, shared prosperity, social stability etc, etc. This is why the Kano FZ must work optimally.

NEPZA has licenced new Free Zones or Industrial Parks. How many Zones do we have now?

Until lately, NEPZA had 34 Free Zones. But in the last two year’s we have licenced a number of more Free Zones. We now have 40 Free Zones including:  Nasco Town Free Zone, Lagos, with expected capital investment of $2.1million; Quits Aviation Services, Ikeja, value estimated at $215million; and there is: Tomaro Industrial Park valued at $450million. All are in Lagos, and all of them target employment in the thousands. Together, these are bringing $2.8billion into the economy in terms of Foreign Direct Investment (FDI). Nasco alone hopes to generate over 15,000 direct jobs.

And you have the Dangote Free Zone, valued at about $12billion, and which promises to generate thousands of jobs. So, we are looking at 40 Free Trade Zones/Industrial Parks. But beyond this, the President has given us the authorisation to licence seven new, pilot industrial parks in each of the country’s geo-political zones. These new Special Economic Zones or Industrial Parks in the works would unleash a wave of job opportunities for our teeming youths. And let me add here that the three models of investment in the FZs are: Private, Public or a Combination of private and public partnership.

These seven new, pilot Industrial Parks – where are they going to be located?

Yes, as I said, President MuhammaduBuhari has authorized the setting up of seven new Special Economic Zones SEZs in the Six Geo-political Zones in the country. These are: the Lekki Garment & Textiles Park as well as the Special Economic Zones (SEZs) in Makurdi, Benue state; Benin, Edo state; Ilorin, Kwara state and Sokoto, Gombe, plus Abakiliki, the Ebonyi state capital.

Read:  7 new Free Trade Zones to Attract FDI – NEPZA

With the coming on stream of these new SEZs country-wide, what is bound to follow is large-scale infrastructural development in terms of power, water, roads, hotel chains, real estate etc. We can, thus, say that the Buhari administration has set the ground for the massive infrastructural transformation of the country.

You now have 40 FZs or parks. How many are operational?

I will say 14 are at the moment operational, the rest are still under construction, but the picture is looking good.

What is your best success-story so far?

A frontline agency like NEPZA cannot have only one success-story. Remember we have been around since 1992! And we have many success-stories. There is the Nigeria International Commerce City (NICC) popularly known as Eko-Atlantic City in Lagos. It is valued at over $38bn and is targeting over a million jobs. The NICC is not your regular Free Zone in the sense that it is not into the export of products or goods into the international markets or into the Customs territory.  It is rather a City Zone, modelled after Dubai in the United Arab Emirates (UAE). It is a city in a city with a whole lot: office and residential complexes, schools, malls, amusement parks as well as entertainment and commercial hubs and the like. And, as I said, it is projected to generate over one million jobs when fully operational.

You know much about NEPZA, reeling out statistics very freely without referring to books or assistants.

I don’t know what you expect from me, but I have been around. I joined NEPZA in 1994, so, in a way, I am a pioneer staff. I have worked at the Head-Office here. I have worked in Calabar, I have worked in Kano and I have worked under five, six managing directors; and I have acted as Managing Director twice before: this is the third time. So, if I do not know about NEPZA, if I am not familiar with certain basics, it should be a thing of concern. And, by the way, in NEPZA here, everyone is a marketer; and to market a product or service, you must know something about it.

Are you satisfied with the progress NEPZA has made since inception?

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I cannot say I am satisfied, but I will tell you that I am happy with our modest contributions to the national economy. From the Premier Free Zone, which made its debut as Export Processing Zone (EPZ), we now have 40 FZs, some of which are at varying stages of construction. So, we are making progress.

We may not be where we wanted or desired to be at this time, but we are certainly not where we started. But with the surge of presidential interest in NEPZA, especially in terms of enhanced budgetary funding, NEPZA is set to go to the next level.

But surely, outside low budgetary allocation, there must be other challenges too.

Of course, yes. I was coming to that. There is no system without challenges, in our case, the most critical is power. And there are others like the dearth of infrastructure or its adequacy, and transportation. The roads are bad, if not terrible. There is no functional railwaysystem – the present administration is just reviving the collapsed rail system. The inland water ways are not really there. All these transportation issues make transporting finished goods to the ports difficult. But as I have said, the president is tackling it headlong.

And, very important too, the NEPZA Act needs to amended to enable NEPZA fulfil its mandate of really giving fillip to Nigeria’s industrial march. And with Buhari’s evident commitment to Nigeria’s industrialization and economic diversification, we will get there. It is only a matter of time.

In 2017, there was talk from NEPZA about a Stakeholders’ Roundtable that was supposed to hold that year. What has happened?

Yes, we planned that, but when something involves many stakeholders and it is of such a big scale, it requires comprehensive planning. So, the issue of a stakeholders’ roundtable has not been jettisoned – it is still in the works. We need to enlighten Nigerians and investors – whether local or international about the Free Zones scheme.

It is the new game-changer in terms of economic diversification, industrial leaps etc. This is the case in the Americas, in Europe, in Asia, especially in India, United Arab Emirates, China, etc. But as I have said, Nigeria will get there; and we have taken more than the proverbial first step.

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