HARD TIMES FOR BUSINESSES… 21 Companies Shut Down In Kano In 3 Years

Lookman

No fewer than 21 companies have shut down operations in Kano State in the last three years due to the harsh economic environment.

Sadly, these companies were in the manufacturing sector, a document from the Manufacturers Association of Nigeria (MAN) in the state revealed.

According to MAN, the companies were particularly forced out of business by high rates of taxes, epileptic power supply, importation and counterfeiting of products.

Meanwhile, the vice chairman of the organised private sector (OPS) in Kano, Hamza Adamu,  has put the total of the private companies that have shut their operations in Kano State at 54.

 In an interview with LEADERSHIP, Adamu said these companies are winding down their operations as a result of a combination of unfriendly economic policies of the government, low business patronage and tough competition, making some of them relocate to the south-west of the country.

Adamu said during the union’s recent meeting, most of the companies lamented that they usually paid up to 18 different taxes, ranging from land use tax, sanitation tax, and even levies on their trucks that move on the roads, among others, while others decried the poor electricity supply that has made them spend more on diesel.

He explained that within the last two years, six chemical, plastic pipes and rubber shoe companies have closed down, along with five hotels, most of them located at Bompai, Challawa and Sharada.

He revealed that some of them had built outlets in the south and were relocating gradually.

“After our meeting, it was discovered that a total of 54 companies have closed down while some are on the verge of closing down; most of the companies comprise textiles, hotels, food and beverages, plastic and rubber companies.”

He also stated that most of the companies had opened outlets in Ogun and Lagos states where there is availability of gas pipelines that allow them to produce energy by themselves and run the factory at a cheaper cost, in addition to enjoying friendlier tax policies.

Adamu, who is also the senior organising secretary of the textile union, lamented that in the past there were over 30 textile factories in the state, but currently there are not more than two.

He stated that most of the textile companies closed shop as a result of importation and counterfeiting.

“Whatever is being produced, they will go to China and produce it at a lesser cost, and when it is brought in, there is high competition. Our government is not helping; the companies have been crying but they (government) are yet to salvage the situation,” Adamu said.

He called on the state government to intervene by making deliberate industrial policies that will assist the industries to come back as well as attract more investors which will employ the youths and further help to reduce the rate of poverty and insecurity, adding that the government cannot employ everyone.

On his part, the Kano State chairman of the Trade Union Congress (TUC), Mubarak Yarima, noted that most of the manufacturing and processing companies were affected due to their high demand for electricity to run their businesses, but that sadly, its unavailability has pushed them to be spending much on diesel, forcing them to close down.

He said the union had engaged the state government on how the problem could be solved, and received the assurance that the electricity problem would be tackled.

“The obligation of the union is the protection of jobs; we have been having contact with companies shutting down, and we have been meeting with the employees’ chair and their unions to devise a means on how they can be catered for,” Yerima stated.

LEADERSHIP’s investigation revealed that some of the companies that have shut down include: B & B Leather Ltd, White Gold Ginnery Ltd, A.B. Fairview Motors Nig. Ltd, Bally Plastic Ind., Triumph Nig. Ltd., Hanushi Manufacturing Ltd., HGB Company Ltd., Kafin Kafi Ltd., Kisma Industries Ltd.,  Lanyo Luggage & Travelling Bags Ltd., Mac Chucks Ltd.,  Mufex Nig. Co. Ltd., Rasa Industries Ltd., Regal Grandview Nig. Ltd., Rider Impex Allied Ltd., Wise Machine Nigeria Ltd., Rock Investment Construction & Works Ltd., Tofa Textile Ltd., African Textile Ltd., Angle Spinning Ltd., and Prosper Industry Ltd, among others.

Kano State head of the civil service, Abdullahi Musa, at a recent symposium organised by the Nigeria Labour Congress said not only the private sector is afflicted by the issue of electricity, but all residents of the state.

He said the present administration of Governor Abba Yusuf is worried at the situation, which is why it created the new Ministry of Power and Energy to address the energy needs of the state by harnessing the independent power from Tiga and Challawa Dams for the companies to have power to run their businesses.

The permanent secretary, Kano State Ministry of Commerce, Investment and Industries, Mohammed Danduwa, told LEADERSHIP that the state was aware of four companies that had relocated from Kano to Ogun State as a result of poor electricity supply and the high cost of transporting their raw materials due to the high cost of diesel.

He explained that electricity used to be an exclusive affair of the federal government but that with the current adjustments in the provisions in the law, the state is making an effort to ensure that the committee set up to actualise the Ajaokuta- Kaduna-Kano (AKK) gas pipeline succeeds in its assignment.

According to him, this will enable the state to build a new power plant that will generate over 1,000 megawatts which will serve both the companies and household needs in the state.

“There is also a hydropower station in Tiga that will supply about 25mw of electricity to companies and has reached about 95 percent completion.

“By the grace of God, in the next two to three years, in Kano we are going to have our power generation to address the problem of electricity.

“Some of these companies moved to Ogun because they are near the sea and want to cut the cost of getting the raw materials which are mostly imported. Therefore, its closeness to the sea makes them pay little money for transportation compared to bringing it to Kano, especially with the expensive diesel,” he said.

Danduwa, however, asserted that the government of Abba Yusuf was working hard to provide an enabling environment to attract more investors to the state.

He further stated that there is availability of land, water, and all that the companies would need, plus the possibility of granting them tax holidays when they employ indigenes.

“There is no peaceful place like Kano, and in the whole West Africa sub-region there is nowhere you can buy and sell as well as in Kano. Even those companies that moved to Ogun, after making their production, they send it to Kano,” he said.

On the issue of multiple taxes, Danduwa explained that the federal and state governments had their tax laws, whose jurisdictions are all stated in the Nigeria constitution; therefore one cannot come to the state and operate without paying tax.

On whether the state has a plan to revive the textile industries, he said most of the challenges came down to the issue of electricity, but he expressed the hope that when the issue is addressed, many companies would work efficiently.

According to him, the state has 23 dams which will be used to tackle the problem of water supply to industries.

 

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