29 June 2009
Lagos — Kano, capital of Kano State, was once the centre of commerce. Unfortunately, the city has over the years has been left behind as many industries have continuously closed down leading to increase in unemployment. IBRAHIM SHUAIBU writes on some of the factors that led to the massive collapse of the industries
Massive collapse of industries is one of the leading factors responsible for high rate of unemployment among the teeming youths in Kano, it is also contributing to high rate of criminal activities in the state and its environs as unemployed youths are among those used by politicians to cause chaos in the state, especially during election period.
Kano State over the years has been a victim of serious shortage of power supply from the Power Holding Company of Nigeria (PHCN). Many even believe that the organisation is deliberately marginalising the state. This action by PHCN is a major contributor to the collapse of industries in Kano with thousands of workers thrown back to the labour markets, thereby swelling unemployment in the state. The situation industrialists and manufacturers found themselves over the years in Kano State have continued to be a source of concern to many.
Some other contributing factors to the massive collapse of industries in Kano State include lack of water supply to industrial areas like Challawa, Sharada, and Bompai industrial estates. The argument is that there is not enough energy from PHCN to power water plants, while there is a limitation to the use of alternative power sources like generator.
THISDAY investigation in Kano showed that another factor that has contributed to the collapse of industries in Kano over the period is the delay in the release of the Export Expansion Grant (EEG) to industries. Presently, it's only few ones like Mamuda Group of Companies, African Textiles Manufacturing Company, Unique Leather Tannery and Asia Plastic Industry Nigeria Company among others that enjoy the grant.
The policy, according to an industrialist had in the past led to a consistent growth in non-oil export in the country as well as help immensely in alleviating poverty and unemployment . Its suspension is having a very negative impact on the performance of the economic and productive sector of the nation's economy.
Economic Expansion Grant (EEG) is an incentive policy established in 1986 with a view to cushioning the impact of infrastructural disadvantages faced by Nigerian manufacturers as well as to make their products competitive in the world market. The EEG incentive, according to manufacturers, contributed a lot to top the marketing and price of goods produced by the industries, while the delay in the release of the grant has drastically caused the marketers to lose their products value as a result of expansion and gross production which the EEG helps in marketing within and outside the country.
Another factor identified by experts in the sector was the influx of cheaper foreign goods into the country. These products that came in especially from Chinese and other Asian countries were automatically preferred by Nigerian than the local ones because of their competitiveness. Chinese products are the most prominent in Kano markets.
Some consumers who spoke to THISDAY in Kano said the Chinese goods are cheaper than those made in Nigeria. According to Yusuf Abdulsalam "I have absolute admiration for Chinese products, especially textiles because of their durability."
According to him, the EEG grants to the Nigerian industries are not yielding any fruitful result because the expected prices of the products continue to go up. "To me, this grant is useless and its purpose is not being judiciously used." It is regrettable to note that majority of the surviving industries in Kano State are managed by Lebanese and Chinese, while the ones owned by Nigerians have been completely shut down as a result of funds and other problems.
Investigation also revealed that even the remaining industries have forced their workers to irregular work schedule, while their entitlements or remuneration is very meager due to government inability to check or monitor happenings in these companies. Unfortunately, the workers have no option than to accept what is being pay to them because of fear of being thrown to the unemployment market.
A cross section of workers who spoke to THISDAY under condition of anonymity said their work condition is terrible and remuneration very poor. They said that they are paid about N10, 000 per month and this comes when they are comfortable to pay, while some of the companies owned by Lebanese pay between N15, 000 and N17, 000 per month. This amounts; they said can only be used for transportation.
Interestingly, there may be silver lining in the horizon. Recently, the Spanish government expressed strong desire to work in partnership with the Kano State Government for the development of sustainable energy for industrial growth. The Spanish Ambassador to Nigeria, Mr. Angel Losada told Governor Ibrahim Shekarau recently that his country is willing to invest in the energy sector in the country. He explained that the Trans-Saharan gas pipeline which will pass through Kano is a very important area which Spain can help the state for maximum benefit.
The Spanish envoy further explained that entrepreneurs from his country are fascinated by the leather potentials in the state, which he described as one of the best in the world. He pointed out that their direct involvement in the leather industry in the state will not only create more jobs, but will also provide an atmosphere for better interaction between the Spaniards and the local community.
Losada also offered to help Kano State in the water sector because of the expertise of his country in the area and the importance attached to water supply by the present government. He also expressed interest to collaborate with the state in the area of culture. He further disclosed plans by the Spanish government to create an honorary consul in Kano State to reinforce the relationship between the two partners and commended the Shekarau - led administration for its will to transform the state.
Responding, Shekarau lamented the deteriorating power situation in the state which he said has led to the collapse of industries and aggravated unemployment. He said the intervention of the Spanish investors in this regard will be worthwhile. The governor, who said his government is doing its best to alleviate water shortage in every nooks and cranny of the state, described the proposal on water supply by the Spanish Ambassador as a step in the right direction. While expressing gratitude to the Spanish government for deciding to set up a consular office in Kano, Shekarau hoped that the relationship between Spain and the state will continue to grow from strength to strength.
Shekarau has equally expressed concerned over the massive collapsed of industries in the state, just as he pledged to take measures to address the situation with a view to introduce independent power project (IPP). As a first step, government has invited the South-Korean firms to come to the aid of the state with their independent power project expertise.
Before the coming of civilian government in 1999, most of the companies in the state were operating in full capacity, while during the period over 215 industries existed with their products very acceptable. Many also believe that, the collapse of industries was also the backlash of frequent religious and ethnic crisis in the state. For example, in 2004, religious crisis in state claimed not more than 100 lives and many of them were workers making legitimate living in the state.
This situation also contributed a lot towards the closure of industries in the state, while the owners of the industries had to return to their countries to invest or went down south west.
Malam Isa Abdullahi a former staff of a textile company and who is a victim of the closure of industries in Kano told THISDAY that the collapse forced him into street begging "because of my large family that depend on me." He is still optimistic that government will revive the ailing industries so that "we can go back to work even though I am old now. I was the processing engineer at a textile company in Bompai industrial site." According to him, "five of my colleagues died as result of hardship and acute poverty."
If help does not come in time, some of the surviving companies may be forced to shut down, Mr. Nadir Vjanying, an Indian who runs a company in Sharada industrial estate, told THISDAY that "my company still exists with total workforce of more than 7,000. However, I may be forced to cut down the number before the end of the year because the electricity problem is very embarrassing.
The Managing Director of Mamuda Groups of Company, Alhaji Hassan Hamoud, expressed concern over the suspension of Export Expansion Grant (EEG) policy, lamenting that the suspension of the policy is seriously affecting businesses in the state. He therefore called on the Federal Government to as matter of urgency revisit the issue in the interest of industries in the country.
"I am sure if government can return the EEG policy, industrial sector would be revived because there so many companies that could be assisted through the EEG policy to increase capacity of production. I therefore called the government to also include the issue of EEG in its policies," Hassan emphasised.
However, in the face of this, industrialists in the state allege that the Manufacturers Association of Nigeria (MAN) has continued to keep quit.
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