Kano State

Kano State is the famous commercial and industrial center of Northern Nigeria and the third largest non-oil and gas economy in the country with an estimated Gross State Product of US$15-19 billion and a per capita income average of US$685. It has a stable democracy characterized by peace, safety and security. It is located in the tropical climate of the Sahel savannah region with a population of about 15 million made up of 51% males and 49% females mainly from the Hausa-Fulani ethnic group. The native Muslims constituting 99% of the population coexist peacefully with numerous other ethnic groups in the state. Kano has a land area of 20,760 square kilometers, a rainy season that lasts from May to October and a dry season commencing from November up until April. Temperatures in the state range from a high of 37C in April to a low of 14C in December. Kano State is strategically situated at the center of northern Nigeria, and has, for centuries, served as a major entry port to the nation and as the southern hub of the trans-Saharan trade route. It has developed from the major supplier of the Northern Nigeria export products of groundnut, cotton, hides and skins in the colonial era to the Nigeria’s second largest industrial and commercial center in 1980s with over 500 medium and large scale industries in various manufacturing enterprises that included textiles and apparels, plastic & rubber, paper & paper products, leather, food & beverages, and other basic industrial products.

The state’s economy is significantly driven by commerce, manufacturing and agriculture. Its strong and divers micro, small and medium enterprises sector with an estimated 1.6 million businesses contributes to approximately 60-70% of employment and production. Its large population provides enormous market opportunities and made the capital (Kano city) a regional market for over 300 million people in northern Nigeria and others from countries like Niger, Chad, Cameroon, the Sahel economic zone and North Africa. The state is endowed with 1.8 million hectares of arable land suitable for massive agricultural production, rich mineral sources including aquamarine, kaolin, uranium, and gold. Also available is a big concentration of agro-processor companies in Bompai, Sharada, Challawa and Tokarawa industrial areas. It has the largest irrigation installation that is capable of supporting farming activities on 400,000 hectares of land at the minimum. Kano State has some of the best infrastructure in the country and the government road construction projects in recent years have enriched the state with effectively maintained road network connecting the state to the capital city, Abuja, and to the neighboring states of Kaduna, Jigawa and Katsina. The state is serviced by a rail link from the seaport in Lagos, and an international airport hosting domestic, regional and international passenger and cargo flights regularly that has been in operation since 1936. The state is home to the Nigerian Commodity Stock Exchange, 22 banks including the first Islamic bank (JAIZ), and the Kano Export Processing Zone. It offers attractive incentives to local and foreign investors and has numerous unique investment opportunities in agriculture, commerce, energy, transportation, housing and mining among others. In 2010, the World Bank ranked Kano State the 8th in Nigeria in the ease of Doing Business, ahead of Lagos, Abuja, Kaduna, Cross River, and Enugu.

INVESTMENT OPPORTUNITIES IN AGRICULTURE

Agriculture occupies a prominent position in the State's economy as employer of labor, provider of food and incomes for households and supplier of raw materials to industries. Approximately 75% of the populace is directly or indirectly engaged in some form of agricultural activity such as crop, livestock and fishery production. Crop production with an estimated value of N721.20 billion constitutes more than 50% of the Gross State Product in 2013. Current annual production of grains exceeds 4 million metric tons. Arable crops that can be successfully grown in the State include cereals (rice, wheat and barley), legumes (groundnut), oil seeds (soya beans, sesame and castor), fibres (cotton and sisal), and spices (ginger, chilli pepper)-all with export potentials. There are available as well, horticultural crops (banana, sugar cane, onion, and mango) that can be successfully grown. Kano State offers access to 58 inland water bodies comprising of dams, natural lakes, rivers and man-made reservoirs with total surface area of 56,583 hectares to support mega agricultural projects. Dams and reservoirs in the state have capacities ranging from 260,000 to 1.9 billion cubic metres, and irrigable space varying in size from 20 to 48,600 hectares is available. Year round agricultural production and massive grazing areas have been created in the state due to the establishment of over 400,000 hectares of irrigated land. Large population of livestock including 12 million birds and over 10 million goats, sheep and cattle are available to support large scale meat processing. The state further offers research and development services from its renowned agricultural institutes like the Centre for Dry Land Agriculture, Kano State Agricultural and Rural Development Authority, Audu Bako School of Agriculture, Kano Institute for Agriculture and SASAKAWA project. Kano State provides abundant investment opportunities in livestock production for export and domestic markets; milk and milk products; agricultural input productions such as fertilizers, agrochemicals, heavy equipment and machinery, and high yielding seed variety; irrigation equipment; production of edible oils from soybean, groundnut, and sesame seeds; and establishing standard meet processing abattoir, fishing farms, and ginnery for textile industries. Further investment opportunities exist in the state in the following detailed areas:

RICE/WHEAT PROCESSING

Kano is one of the focal states selected under the Federal Government rice development program aiming at increasing rice production in the country. Rice demand in Nigeria alone offers a significant market opportunity as the country used to import 40% of its rice in addition to the greater opportunity presented by the neighboring countries sourcing their rice shortfall from Nigeria. With the current Federal Government ban on the importation of rice, the domestic and foreign demands have increased significantly resulting in greater market opportunity. Increased support to rice farmers in Kano has already raised production from 700,000 metric tons in 2015 to over 1.5 million in 2016. The current rice investment environment is very favourable to both local and foreign investors. The state’s seeds provision, the one billion naira loan to rice farmers under the Comparative African Rice Initiative (CARI) and the support from German government are making out-grower projects in rice more attractive to farmers and processors and are generating employment opportunities along the entire value chain (transportation, marketing and warehousing). Moreover, the favourable soil and climatic conditions, the impact of small and medium -scale rice processors, the availability of over 20 dams for rice production, the designation of Kura-Kadawa as Staple Crop Processing Zone (SCPZ), and the presence of Dawanau International Grains Market are altogether creating better and greater opportunities for local and foreign investors in rice.

The decline of local wheat production has increased the demand for imported wheat costing Nigeria N635 million annually. The Federal Government plans to meet 70% of local demand through states like Kano. The state has sufficient amount of rainfall and at least 10 massive functional dams to support large scale production of wheat, especially in the low land. The 37 irrigation wheat clusters are vivid signs of favourable climate for massive production. The demand for wheat is increasing due to the presence of flour mills, bakeries, noodles producers and various forms of local wheat-based delicacies. The number of farmers is expected to double as government increases capital expenditure in upgrading dams and providing quality inputs and soft loans to farmers. Large scale investment in wheat production will help meet national demand and the favourable government policies directed to boosting local production and processing is making such investment even more attractive and viable. The impending ban on wheat importation and the development of high yield varieties by the Lake Chad Research Institute and the various incentives to large scale producers encouraged the Nigerian Flour Mills to increase investment in backward integration. Kano State offers early mover advantages to investors who are keen in integrated wheat production.

SOYA PROCESSING

Kano State is the largest destination of soya beans produced in northern Nigeria and a major centre for soya bean marketing locally and across northern borders. The soya bean processing provides over 6,500 jobs, and it is estimated that new investments in other value-added products in the value-chain, will significantly increase employment in soya bean production, processing, marketing and logistics. The inclusion of soya bean as a key component of the Kano State Agricultural Development Plan is expected to help organize farmers in clusters to augment production and ensure steady supply of the commodity to processors. The proximity to Dawanau International Grains Market will provide access and cost-saving advantages to local processors. With over 30,000 hectares devoted to soya bean production, and a large population of processors, the state is working on increasing its contribution along the product’s value chain, and is ready to partner with investors for the mass production and processing of soybeans.

TOMATO PROCESSING

Kano is one of the leading states in tomato production mainly due to favourable soil and climatic conditions as well as the availability of water resources to support year round production. The state government has implemented intervention schemes that led to the mass production of tomato. However, tomato production remains largely traditional resulting in significant loss of value. Increased private investment in tomato processing – paste or powder – will meet national demand and create export opportunities. There are about 20,000 farmers in Kano State’s main tomato producing areas. Kano markets serve approximately 3 million tomato customers daily within the state and another 3-4 million from neighbouring states and countries. The state has already provided sufficient land to accommodate processors in its tomato production cluster located at Kura/Kadawa. With the present efforts by the state and federal governments to rehabilitate dams and water ways, increase in tomato production will ensure stable supply for processors. Areas in the tomato cultivation value chain that Kano State looks forward to partnerships with investors include export of fresh tomatoes and production of tomato paste/ puree, plum tomato, tomato juices, ketchup, and sundried tomato.

INVESTMENT OPPORTUNITIES IN POWER

Development of the power sector remains critical to Nigeria's economic and industrial transformation. Some of the key challenges facing the power sector include inadequate power generation, transmission and distribution capacities. Nigeria has an installed power generating capacity of slightly more than 6,000 MW and only 75% of that capacity is currently generated. This is less than 10% of the current estimated national demand. It is further estimated that only 1,500 MW or 60% of the electricity generated is actually consumed. The rest is lost owing to deficiencies in transmission and distribution capacity. Even when available, power reliability is less than 40%. As a result, many businesses rely on alternative sources of power supply that is increasing their production costs by at least 30%. The current demand for power in Kano State is approximately 500MW. The average daily dispatch is much lower at between 80 to 100MW, leaving a huge power supply gap of over 400MW. The projected demand by 2020 is approximately 2,000 MW and a substantial part of that is expected to come from Independent Power Projects initiated by the State.

INVESTMENT OPPORTUNITIES IN TRASPORTATION

Transportation in Kano is predominantly road-based and currently, the mode consists of taxis, buses and motor cycles. As Kano State strives to improve transportation and provide commuters with safe, reliable and affordable options to travel, prospective investors are encouraged to invest in the road and light rail transport sector to effectively service the high population and the huge daily commercial activities in the state. In the short-medium term an estimated 4,000 long buses would be required to provide effective transportation system to serve over 3 million people commuting daily within the state. The State welcomes private investments in the following areas:

  • Tapping the potentials for establishing rail infrastructure within Kano metropolis especially the development of urban rail transit system.
  • Development of multi-purpose facility parks that will include weight –bridges.
  • Establishing urban and Inter State Bus Service.

INVESTMENT OPPORTUNITIES IN REAL ESTATE

The potentials for housing development in the State are very high. The State has an estimated population of 15 million, 50% of which is young and growing at 3.5% per annum. In addition, there is a huge influx of people from within and outside the country due to Kano's strategic status as Northern Nigeria commercial and investment centre. Urban population has been growing rapidly since the creation of the State in 1967. Housing delivery in the State has hitherto been largely public-sector driven although, given the right incentives, the private sector has shown willingness to participate in housing projects. The State Government has developed many housing program the most recent being the three different estates that have since been completed by the state government. However there is still a housing deficit of 250,000 units in Kano due to increases in income levels especially among the middle class, a growing urban population and the rapid transformation of rural towns into urban and semi-urban towns. To make up for the shortfall, the government under the State Housing Master Plan is providing incentives to encourage private developers to carry out residential and commercial development projects. The state has reserved over 250,000 plots of land for mass housing and commercial development by investors through public-private sector partnership.

INVESTMENT OPPORTUNITIES IN TOURISM AND HOSPITALITY

Despite advancement in commerce and industry, a 5-star hotel is still non-existent in the state. Apart from impeding the start-up of operations by major airlines like British Airways, this is also depriving the state of tourists and curious investors who might wish to explore opportunities in the state had conditions been different. Kano State welcomes investors for the construction of 5-star hotels. About 16.57 hectares of land has been reserved in the Kwankwasiyya city located 10 kilometres from the Kano city centre for that purpose. Another 100 hectares has been set aside for a 5-star hotel and an international golf course in the Bagauda World Tourism Resort Zone situated 70 kilometres from the city centre.

The people of Kano have a rich cultural heritage that provides enormous tourism and hospitality opportunities. The annual Sallah festivals are extremely popular amongst local citizens and foreigners alike. There are a number of tourist sites such as the centuries-old great city wall, the Dala hill and the Kurmi market established in the 15th Century. Other places of interest for relaxation include the Rock Castle, strategically located and overlooking the famous Tiga Dam, Rurum Tourist Lodge, Kano Zoological Garden, and Gidan Makama Museum. The Durbar in Kano is another unique experience because of its large procession of colourful horses. It is held twice at the end of the Holy Month of Ramadan and on the 10th Day of the last month of the Islamic calendar. The Emir leads the Durbar procession of 52 Kano Emirate title holders with an entourage of over 1000 horse and camel riders. Since the creation of the State in 1967, successive governments have been responsible for direct public funding of tourism and hospitality infrastructure including hotels and holiday resorts. The government currently provides incentives to local and foreign investors to provide excellent tourism and hospitality infrastructure. The government will particularly support private investment in the development of holiday resorts and five-star hotels. It has reserved 3,000 hectares of land with excellent topography for tourism development in the Bagauda World Tourism Resort Zone, and is welcoming investors to utilize the convergence of Tiga and Bagauda rivers to undertake Independent Power Project to power the entire northwest geo-political zone. Similarly, the following opportunities exist for the development of wonderland and night safari comprising of Night and Day Zoo, Theme Parks, Hotel and Restaurants, Cinemas and Holiday Villas. This will be the first of its kind in Africa to primarily promote tourism and recreation. It has the potential to create over 20,000 jobs to Kano citizens. To encourage investment in this sector the government is providing:

  • 100 hectares of land for the development of an international standard horse/camel racing arena;
  • 100 hectares of land for the development of a 5-star hotel and an international Standard Golf Course.
  • Premium land along the Tiga River exclusively for the construction of luxury vacation villas and condominiums

INVESTMENT OPPORTUNITIES IN SOLID MINERALS

There are tremendous opportunities for investments in the solid mineral sector in Nigeria. The Federal Ministry of Solid Minerals grants prospecting licenses to local and foreign investors to participate in the excavation of Nigeria’s vast mineral resources. Opportunities exist for the mining and export of the following solid minerals in Kano State:

  • Niobium and Uranium: There is an estimated 200 million tons of ore valued at over $1billion as at 1952.
  • Kaolin Deposits: An estimated 6 million tons with an estimated value worth over $80 billion. This is found in several areas of the State.
  • Gold: Unquantifiable huge deposits mined in several locations since 1920's.
  • Feldspar and Quartz: Available in commercial quantities.
  • Tin-Zinc-Silver-Lithium: An estimated 5 million tons and expected to last for over 35 years with a projected annual return of over $2million.
  • Silica Sand: Over 3million tones that can last for over 40 years at annual production of 60,000 tones.

Rare-Earth Element [REE] economic grades of about 0.4% total REE oxides. Several types of Granite and marble deposits. Traces of precious stones such as Aquamarine, Tourmaline, Corundum, Amethyst, Topas, Garnet, Emerald, Zircon and Quartz of different colors.

WHY INVEST IN KANO STATE

There are compelling reasons that position Kano State as the best location of choice for local and foreign entrepreneurs. Kano State has been a center of commerce and investments for centuries and has over the years developed the proficiency to support investors turn ideas into monetary reward. It is endowed with the human, natural and material resources that are creating unparalleled money making opportunities in all sectors of the state economy to any brave investor willing to participate in the state’s development projects.

Its population of more than 15 million people, being the largest in the country, provides enormous market opportunity for goods and services that puts the minds of

Investors at peace. Kano’s peaceful and hospitable communities and its effective law enforcement agencies guarantee the safety and security of investors and their properties. The state, through the Kano Investment Promotion Agency, assures investors of its assistance and support in their endeavors to set up and manage enterprises in the state. In addition, investing in Kano has the following further unique advantages:

EFFICIENT TAX SYSTEM

  • Taxes streamlined from 200 to 19 at local and Ministries, departments and agency levels. 
  • Reduced compliance burden through innovation in tax harmonization’s and re-engineering of administrative task among ministries, departments and agencies. 
  • Transparency, simplicity, stability and certainty in the application of tax law. 
  • Public Private Dialogue Mechanisms to encourage discussion and amicable resolution of tax issues. 
  • Effective tax complaint mechanism. 
  • Presumptive tax compliance made easier for the informal sector. 
  • Tax for Service projects (effective utilization of tax proceeds) that facilitate better delivery of public services.
  • Well-trained tax officials at the state and local government levels.
  • E-payment of taxes.

EASE OF LAND ADMINISTRATION

  • Improvements in land administration that made Kano a more attractive in- vestment location.
  • Improved information on plot size and location, land use and occupation, local facilities, demographic factors and nature and scale of local market potential.
  • Simpler, cheaper, faster mechanisms to acquire land.
  • Regulated and transparent property taxation.

GOOD INVESTMENT CLIMATE

  • Passage of the Kano Investment Pro- motion Law (IP) to promote investments and create jobs. 
  • Granting of access to loans to small businesses by using movable assets as collateral. 
  • Enterprises ability to liaise with micro- finance banks to access financing via the Collateral Registry. 
  • Frameworks for accrediting business development service providers to en- able them provide better services to businesses in Kano.
  • Building the capacity of women in in- formal sectors to facilitate access to markets and finance for their businesses

EASE OF DOING BUSINESS

  • Optimized processes for registering companies and processing business licenses to facilitate investments.
  • Streamlined vehicle registration process with Kano State Road Transportation Authority.
  • Clarity of information on the trade registration law and provision of sup- porting communication materials.
  • Provision of information to prospective and current investors on the improvements in the Kano business environment as part of the support to Kano State Ease of Doing Business.

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