19 sub-national investment companies in northern Nigeria want review of central government’s economic policies
By Jacob Ajakaiye, in Kano
The chief executive officers of the 19 state investment companies in northern Nigeria, have called for a review of some of the economic policies being implemented in the country which they viewed as injurious to the growth and development of the region.
They attributed some of the worrisome negative development noticeable in most states in the region to some of the faulty policies that have been hampering the efforts being made to grow the economies of the region.
The most noticeable of these policies, they said, was the banking reform that was chiefly responsible for the death of all the northern owned commercial banks, which left the region with no bank of its own to support the region `s economic development.
The call was made in a communique issued at the end of a maiden conference of state–owned investment companies of northern Nigeria hosted by Kano State Investment and Properties Limited (KSIP) with the theme: ‘Repositioning of State-owned Investment Companies of Northern Nigeria for Growth and Development’.
Bashir Dalhatu, chairman, Northern Nigeria Development Company NNDC), who was the chairman of the occasion, in an opening remark, commended KSIP for organizing the conference, an initiative which he described as long overdue, and should have been done many years ago.
According to him, the conference was geared towards making the investment companies in the region perform better, as well as stimulate the entire economy of the region, noting that the idea was capable of promoting a paradigm shift in the economy of the region.
Dalhatu, who is also a former federal minister, however, observed that the inability of the various state governments in the region to boost investments in their companies have negatively affected the growth and development of the macro and micro- economies of the states and the entire region.
Furthermore, he said that non-challant attitude of the stakeholders to critically examine some of the Federal Government `s polices that are perceived not to be in the best interest of the region have compounded the socioeconomic woes of the region.
He identified some of these policies, such as, the banking reforms by previous administrations which led to the death of all the northern-owned commercial banks, adding that efforts made by NNDC with the support of Northern Governors `Forum to float another bank, as a way of aiding the economic development of the region did not get the support of the approving government agencies which limit ownership of government equity stake in commercial banks to 10 percent.
He also observed that many people and businesses in the region were unable to access some of the intervention funds put in place by the Federal Government, such as the Anchor Borrowers Programme, because the CBN preferred to channel the funds to end users through commercial banks that would request for collateral of nothing less than 300 percent of the value amount applied for, and that blocked general public in the region from accessing the facility.
The chairman of the NNDC noted that all the efforts made by NNDC and Odua Group for the intervention funds to be channeled through the groups for disbursement to end-users, was not taken seriously by CBN, a development that is responsible for the continuing exclusion of a large segment of the targeted beneficiaries of the programme from the region.
Dalhatu added that there was the need for state investment companies to work together to form a pressure group that will push for review of some of these existing federal government`s policies, so as to make them more friendly to the region, in view of the peculiarities of the development challenges confronting it.
He also observed that other policies, such as the Procurement Act in place in the country is sidelining businesses and also reducing their participation in the economy of the nation, charging the federal government to provide level playing ground for all in the country.
Attributing some of the mentioned problems to a lack of unity among stakeholders in the economies of the region, he said they are responsible for the various poor socioeconomic development indexes associated with the region, calling for more commitment on the part of states and private players in the economies of the region in tackling the mounting cases of poverty and under-development in the region.
Jubrilla Mohammed, managing director, KSIP, while welcoming participants, said the primary objective of the conference was to discuss and exchange ideas on the prevailing challenges facing the participating companies with a view to collectively proffer solutions and develop strategies for the growth and development of state owned investment companies in northern Nigeria.
Mohammed said that the establishment of state investment companies was driven basically by the need to stimulate commercial and industrial activities in the states, noting that unfortunately over the years, this objective has not been achieved, hoping that the conference would be able to proffer solutions that would address various challenges confronting the companies.
“Some of the other reasons, responsible for the inability of the companies to achieve their statutory objectives has to do with the erosion of the equity investments of the companies attributable chiefly to the capital meltdown and difficulties associated with huge capital requirements and general declining fortune of the nation`s economy.
“ KSIP and by extension the Kano State government took the lead to organize the conference with a view to deliberate and strategize on approach to adopt in order to remain relevant in the system and make meaningful contributions to the economy of the state, region, and the nation at large.
“ The abundant human and material resources available in the state and the region have remained largely untapped, calling for greater focus on the exploitation of the huge opportunities in agriculture, manufacturing and solid material sectors of the region`s economy.
“Despite the prevailing challenges, state governments in the region have continued to support their respective investment companies, and noting with delight the tremendous achievements recorded by KSIP in the life span of the present management, within the context of the current poor performance of the nation economy and the meltdown of the capital market.
“Before the present administration in the state, the company was solely depending on annual dividend income from equities and insignificant rental income from properties for its operations, which was hampered by the take-over of some of the income generation assets by previous administrations in the state,” he explained.
Mohammed revealed that under the current administration, the management of the company was able to secure some of its properties in Lagos and Kaduna states and put them into income generation uses.
Highlighting some of the achievements of the company under his leadership, which ranges from the development of a total of 300 units of 2 bed-room houses at Gurjiya village, that were over-subscribed, which spurred the company to embark on the development of additional 250 units at the site, adding that the development would be extended to the all LGAs in the state.
“The company also constructed 16 units of 4 bed-room duplexes at Sokoto Road in Kano, and another 15 units of 4 bed-room duplexes at Race Course Road in Kano with private developers for commercial sale to enhance the company’s revenue profile.
“In the same vein, the company developed five in number, four-bed-room duplexes on the extension of land at its head office developed at a total cost of N23.6 million but sold out at the cost of N55 million per unit which generated N157 million profit to the company,” adding that the same method was used to construct a shopping plazas consisting of 26 shops and 16 offices at the cost of N211 million, and N91 million for another block, the properties are expected to generate N15.2 million rent per annum.
“Other projects which are on the drawing board of the company in 2019 operational year, includes construction of office complex at Yar-Fulani Zaria Road, and eight in number, four-bed room duplexes at Sabo Nanono Road, are part of the ways to argument revenue generation capability of the company.
Furthermore, Mohammed, who before his appointment as the managing director of the company, was an economist with Bayero University, Kano, stated that in the area of equity investment, the company was able to grow its quoted investments from N1.2 billion in 2015 to N1.5 billion as at December, 2018, through re-structuring of investments and adoption of e–trading system.
In line with the above development, he disclosed that from 2015 to 2018 the company earned N95 million as divided income from shareholding in various companies, while, N65 million was earned as capital gain from a portfolio review in 2016, noting that for the first in the history of the company it was able to employ qualified stock brokers to execute buy and sell orders of stock online real time from its office.
He added that from when it commenced e-trading in June 2018 with 30 percent of its total portfolio, a total of N25 million has been earned, while the company has also ventured into commodity trading to boost income.
He also disclosed that the company, under his leadership, has also intensified investors’ education through organizing seminars, conference, and embarked on training and re-training of staff.