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Business Activity Slows in Northern Nigeria

  • Isiyaku Ahmed

Police check point near Government House in Kano, Nigeria (Isiyaku Ahmed/VOA)

Police check point near Government House in Kano, Nigeria (Isiyaku Ahmed/VOA)

In northern Nigeria, business activity has slowed, largely due to insecurity. The 2011 World Investment Report of the United Nations Conference on Trade and Development (UNCTAD) says that the Nigerian economy has lost over six billion dollars [N1.3trillion] as a result of attacks by the Islamic radical group Boko Haram.

The Center for Research and Documentation in the northern city of Kano attributes the threat to a drop in earnings for nearly all businesses in Kano State.

Today, a new program is looking for solutions to the challenges facing state businesses. It’s called ENABLE, or Enhancing Nigerian Advocacy for a Better Business Environment. The project is a collaborative effort between the Kano-based center and the UK’s Department for International Development

The program encourages and facilitates communication between the private sector and government ministries. And, it helps provide access to legal, policy and regulatory information to stimulate an informed dialogue.

Umar Ibrahim Yakubu is the executive director of the center, which is located along Sokoto road in the government reserved area of the northern Nigerian town.

As for the state's business environment, he said, "We discovered that 97% of businesses were negatively affected by the security problem. Some of them had to close down, some of them had to retrench some of their workers, and some of them had to cut down in the number of hours of operation."

Yakubu said the research covers businesses across various sectors including manufacturing, commerce, hospitality, and crafts and trade. The study's findings were disseminated in a seminar to stakeholders, the private sector and the government. It aims to solicit their input and devise ways of addressing the challenges.

"An agreement was reached," he said, "that the government will work closely with business organizations to see how these problems will be resolved to bring back business [and trade] to Kano state."

Some businessmen support the police presence, including 55-year-old trader Alhaji Kabiru Isa Mai Sabulu. He sells sugar, beverages, rice, spaghetti and other imports mostly from Asia.

Sabulua defends the police presence, saying it helps protect businesses, travelers and the public. In his opinion, insecurity can not stop trade and commerce in Kano. Even with the heavy security check points, he said people continue to come to Kano from different parts of Nigeria and neighboring countries for various business transactions.

Alhaji Ali Madugu is Vice President of the Manufacturers Association of Nigeria and Managing Director of Dala Foods -- producers of a variety of tea and beverages in Kano.

He said businessmen should learn to keep their businesses moving despite the security challenge, but called on authorities to relax the tough stop and search measures at check points.

"All the shops and businesses close to [near] police formations were closed down," said Maduguru. "Since January 2012 up untill today, nothing is operating there."

He said business will return if police stations around markets and commercial areas are closed or moved. He suggested that the police should go back to their old locations so business activity could improve.

The study notes that security is not the only problem affecting Kano’s business owners.

It found that the area is also affectd by an erratic power supply as well as a lack of credit and inconsistent government policies.

Ahmed Rabiu, the president of the Kano Chamber of Commerce, Industry, Mines and Agriculture said the situation " is being compounded by the continuing inadequacy in the infrastructure requirements for power, water, access roads, rail services, airport services and even telephone access....Hardly anyone is happy."

The Kano official said there are many other issues at play as well. They include unfavorable exchange rates for investors, high interest rates that make it hard to get loans, the banks’ inability to offer financial assistance, the failure of non-bank financial institutions to support development of industry and commerce, and lack of support by government to encourage business activity.

Rabiu suggested one one way to revive the economy is to implement Vision 20:2020, Nigeria’s long term development plan designed to propel the country into the world’s top 20 economies by the end of the decade.

One of the plan’s goals is to promote an efficient and globally competitive, private sector that will facilitate the growth of businesses and investments.