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A Special International Report
Prepared by
The Washington Times
Advertising Department - Published on September 30, 1999
[Home Page]
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Sponsors (1) Federal Ministry of Finance
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Resource-rich Borno offers incentives for partners
A businessman himself – he is chairman of the state’s airline – Kachallah has traveled the world and knows what type of environment lures investment. His government is committed to providing it.
“Investors are welcome. We have a very liberalized promotion package in terms of industrial plots and tax relief,” Kachallah said. “Even more importantly, we can sit down with investors, discuss what areas they are interested in, and do whatever we can to assist them. I know how businesses grow in partnership.”
Borno has no shortage of opportunities. The state has two major vegetation zones: the Sahel, where most of the wheat in the state is produced, and the Sudan savanna in the south, where tall trees and woodlands are interspersed with shrubby vegetation.
Both zones provide ample land for agriculture and livestock, mainstays of the state’s economy. In addition to wheat, millet, rice, cassava and date palms, peanuts, cotton and gum arabic are grown in Borno.
“We have the highest quality gum arabic in the region,” Kachallah said. “It draws people from all over the world.” Only recently, he said, he committed his administration to supporting the establishment of plants and sourcing markets for a group of gum arabic merchants he received. “We now need serious investors to come and see our potentials and put in the processing plant.”
Borno is the only state in the federation that borders three states: Chad, Niger and Cameroon. This has proven an asset, making it a route for goods being shipped across Nigeria out to West African markets and beyond. The state’s border markets have become rich trading grounds. “The neighboring countries are poorer, so they cannot afford letters of credit from America, France or other Western countries; so they buy their products from Nigeria,” the governor explained. Borno’s roads constantly teem with trucks on their way to the sub-region, and Kachallah is eager to see them stop in Maiduguri.
According to the governor, it is the lack of technical expertise and not a shortage of capital, entrepreneurship or natural resources that has caused a lack of industry. “We have a lot of local people who have the necessary funds, but what we want is enlightenment,” he said.
Jeb Bush saw the opportunity to provide the missing element. While his father, George Bush, was U.S. President, he set up a factory in Maiduguri which produces irrigation pipes and assembles U.S.-manufactured water pumps.
To encourage similar projects, the state is willing to provide free land to any serious investor and extend all necessary facilities including roads, power and water. In addition, it can provide tax holidays for a number of investments, including solid minerals. Borno boasts several million tons of unexploited gypsum, with other mineral resources including diatomite, potassium/sodium, clay, limestone and uranium.
To realize its tremendous potential, Borno will need the help of both foreign investors and international development agencies, Kachallah explained.
The World Bank has been involved in a number of projects in the state, the most impressive of which was the water treatment plant in Maiduguri. While the project has brought clean water to the people, sustaining it without additional funding has taken its toll on the state coffers.
Regardless of the difficulties in sustaining the project, Kachallah says the state is grateful for it. Borno is so arid that without it many of its people would not have access to potable water. The governor is eager to renew the relationship with the World Bank and build the economic foundations for easing poverty and tapping the state’s abundant potential.
Calling Potential Investors
Sitting in the office of one of Borno’s most promising investment opportunities, the NEITAL Shoe Factory and Tannery located in Maiduguri, S. B. Abba, Borno Secretary of State, explained the government’s position on investment. “We expect a lot from an equity partner by way of training existing staff, bringing in technical expertise and fresh funds,” he said.
The factory has lain virtually idle, maintaining only skeletal operations, since the Italian company that helped build it ran into financial trouble in 1989. Today it is ready for a fresh injection of capital to set its machines back in motion, and technical expertise to launch it into the global market.
Potentially the largest employer in Borno, when running at full capacity the factory can produce a million shoes while employing 600 people at each shift. It is located some 500 yards from the Borno rail line and one of West Africa’s largest cattle markets. Because of its proximity to both the West African markets and its abundant supply of raw materials, the factory represents a solid investment opportunity, according to a United Nations Industrial Development Organization report conducted in 1990.
Since democracy opened doors to foreign investors, Borno is seeking a 40-percent partner in the roughly $250,000 equity project. The ownership ratio would grow, the state officials say, with the takeoff and successful running of the project. “So long as the products are produced locally, employment is generated and the multiplier effects go back to the state, we will have no restrictions on equity ownership,” Abba said.
The plant could resume production almost immediately. Standing idle are its two reserve generators, sewing machines, cutting machines, drums for tanning hides and a trained staff. With an investment of some $2 million, the factory could be fully brought up to date, computerized and made ready to meet the needs of the European, Asian and even American markets. Investors are welcome.
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Table of Contents (1) It's a new dawn over Nigeria |
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Located in the northeastern part of Nigeria, Borno state may seem far from the U.S. But the nations’ ties are closer than could be expected. In 1992, Alhaji Mala Kachallah sent a letter special delivery to Arkansas, congratulating Bill Clinton on attaining the presidency. With that act, he bridged the gap between his state and Clinton’s own. Now governor, Kachallah wants to further narrow the distance by establishing trade and investment links that will benefit both countries.
In addition to gum arabic, northern Borno is also endowed with petroleum, the extent of which is now being investigated by the Nigerian National Petroleum Corporation (NNPC). Rich deposits have already been found along the shores of Lake Chad, located in neighboring Chad and Niger. Kachallah is confident large discoveries will also be made in Borno. “There are petroleum deposits all over the state,” he claimed. “We want private companies to come in to explore our reserves.”
The state has a good transport system that links it by air, road and rail to other states in the federation, as well as an international airport that links it with the world outside Nigeria.