INVESTIGATION: Nigeria’s Industrial Development Centres in its ‘death throes’ (Part1)
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The 23 Industrial Development Centres (IDCs) designed and built to service small and medium scale enterprises (SMES) in Nigeria are derelict and abandoned despite Federal Government’s plan to use the facilities to boost small scale local business in the country. YEKEEN Akinwale who visited centres in Lagos, Port Harcourt, Abuja and Kano reports about the dilapidated condition of the multi-million infrastructure built across the country.
THE Nigeria’s Industrial Development Centres (IDCs) in Abuja, Lagos, Port Harcourt, and Kano have been taken over by miscreants, farmers and herders, and the supervisory agency, Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN) is not unaware of this, but could only do little or nothing, The ICIR can report.
Though the Federal Government made repeated promises to rehabilitate the moribund 23 industrial centres across the states after admitting in 2016 that they have been abandoned and dilapidated for too long.
The 23 industrial centres established by past government were to serve as a support system for Small and Medium Scale Entrepreneurs (SMEs) in the country but none of them functions currently.
The first IDC was established in Owerri in 1965 by the former Eastern Nigeria government, Ministry of Trade and Industry, and was taken over in 1970 by the Federal Government including the one in Zaria, Northern Nigeria, which was established in 1969.
The emergence of the centres followed the Nigerian government’s yearning to strengthen SMEs in the country. The centres were established and located where the country has a comparative advantage of natural resources.
Experts who carried out feasibility studies recommended that the government should concentrate on five areas namely; woodwork, metalwork, automobile repair, textiles, and leatherwork.
When establishing the centres, the Federal Government spent huge funds providing workshops, machines, offices, and vehicles.
Though the centres were previously under the Ministry of Industry, Trade and Investment, they were later handed over to the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) in 2011.
However, due to years of neglect by the government, the centres are currently wasting away.
The current administration under President Muhammadu Buhari launched an MSMEs clinic across the states to fast-track development of SMEs but did not articulate any action plan in the clinic for the revival of the supporting centres.
Visits to the centres in 2017 by the Senate Committee on Industry did not yield any results despite lamentations by members of the committee about the sorry state of the centres.
The IDCs were established to provide extension services to the SMEs in such areas as project appraisal for loan application, training of entrepreneurs, managerial assistance, product development, production planning and control, as well as other extension services.
In 2017 and 2018 budgets, SMEDAN allocated N600 million to rehabilitate 12 centres. The amount was spent to construct fences around some of the facilities and to complete other renovation works.
According to Ibrahim Kaula Mohammed, the Head Corporate Affairs Department at SMEDAN, the agency inherited the dilapidated centres from the Ministry of Industry, Trade and Investment.
“When we inherited these IDCs, that’s how almost all of them were, dilapidated,” Mohammed told The ICIR in an interview.
On why the agency has failed to revive the centres and allowed them to deteriorate, Mohammed, said, “We didn’t receive any kobo at this agency for IDCs in terms of budgetary allocation until 2017. Any improvement you see on any IDC is only from 2017 and 2018.”
The agency, in 2017, fenced the premises of IDC Benin, Katsina, Ikorodu, Owerri and Abuja. In Zaria it did a general renovation of the 3-in-1 workshop. At the IDC Idu, Abuja the roof was renovated.
In 2018, he said the agency bought complete automotive component of waste to wealth equipment in Idu, Zaria and fenced Kano, Makurdi, Jos and Abeokuta centres.
Despite all this spending, he said the IDCs would be demolished any time soon. A viability study has shown that despite the rehabilitation —they will be replaced with what is now known as industrial clusters.
SMEDAN and Africa Development Bank (AfDB) carried out a study of all the IDCs, which comes in two stages: Outline Business Case (OBC) and Full Business Case (FBC).
The ICIR gathered that the OBC has been completed and submitted to the AfDB which has the final say to go ahead with the second stage, FBC.
He said the management would engage auditors to examine the work.
“That is what is remaining and we have done procurement in that respect. An auditor has been selected. It is now for AFDB to agree with what we have done. Once AfDB is satisfied with all the processes, we would now sign a contract with the auditor,” he added.
For the second part of the AfDB case, the FBC is going to demolish all those workshops (even those rehabilitated) because that is what the consultant who carried out the study proposed.
Based on the proposal, there would be a vertical cluster that would accommodate more SMEs.
The spokesperson said the concept all over the world is an industrial cluster— a group of interrelated business in one place making use of a common facility and infrastructure.
Six centres—Abuja, Lagos, Sokoto, Port Harcourt, Owerri and Maiduguri are said to be in the pilot stage of the proposed industrial clusters.
Mohammed said all the 23 IDCs are viable, according to the study.
“But we cannot start with the whole 23, we have assigned the cluster type to each of the six. The selection is based on the competitive advantage of each of the states,” he said.
Lagos will focus on Fast Moving Goods (FMGs), while Port Harcourt will focus on chemicals and oil products because of the availability of petroleum there.
In Nigeria, small scale businesses constitute 85 per cent of all firms operating in the economy, Hassan Ayinde and Olaniran Olawale wrote in “Developing Small Business Entrepreneurs through
Assistance Institutions: The Role of Industrial Development Centre, Osogbo, Nigeria,” published in the journal of the Canadian Center of Science and Education.
Like in most other developing countries, small scale businesses employ the largest number of workers. It is the official policy of the government to develop the economy and fight poverty through the development of small scale businesses.
Four times SMEDAN promised to rehabilitate the industrial centres and failed
In January 2016, a former Director-General of SMEDAN, Bature Masari, said the agency was working towards the upgrade and conversion of its IDCs to enterprise centres and MSME cluster parks in an effort to facilitate the speedy development of MSMEs to enhance economic empowerment and employment generation.
He gave the names of the IDCs slated for conversion to include those in Ogun, Ondo, Bauchi, Edo, Kano, Borno, Niger, Cross Rivers, Osun, Rivers, Sokoto, Adamawa State, and Kaduna states.
Bature also disclosed that IDCs in Enugu, Abuja, Lagos, Kwara, Plateau, Katsina, Imo, Akwa Ibom, and Taraba States would be converted into Enterprise Zones because of their size to offer common facilities and workspaces to MSMEs in those states.
He said SMEDAN was into partnership with Osun and Kano state governments for the redevelopment and upgrade of IDCs in Oshogbo and Tiga respectively where huge funds were being committed by the two state governments on the upgrade and conversion of the facilities.
Though when this reporter visited Kano IDC there was no sign of any redevelopment. Like other centres, it was deserted and dilapidated.
Bature pointed out that while the Tiga IDC was in the process of being converted to a world-class leather cluster park, more than N200 million has so far been expended on the improvement of facilities and rehabilitation of the Oshogbo IDC by the Osun State government under an MOU with SMEDAN.
Since then, nothing has happened to the centres; but the empty promises by the government did not stop.
This was despite Nigeria’s growing unemployment rate which stood at 23.1 per cent of the workforce in the third quarter of 2018, up from 18.1 per cent a year earlier, according to the National Bureu of Statistics, NBS.
“As of Q3 2018, the calculated unemployment rate was 23.1 per cent, the underemployment rate was 20.1 per cent, and the combined unemployment and underemployment rate was 43.3 per cent,” the NBS report stated.
In his message at the opening ceremony of the Lagos Leather Fair, the new DG of SMEDAN, Dikko Radda, like his predecessor said the agency was collaborating with Kano State Government to redevelop a N12 billion IDC in Tiga town of the state into a world-class leather cluster park and training centre, but with Public-Private Partnership (PPP) with stakeholders of the leather industry, including potential investors to embrace the project.
He spoke through the agency’s Director of Engineering, Technology, Innovation and Infrastructure, David Abu Ozigi. That was in June 2017.
Ironically, Kano IDC in Tiga town is currently a grazing field to herders’ cattle. There are no signs of any new investment at the centre when it was visited by The ICIR.
A year after— precisely, June 2018, Radda, again, announced that the Federal Government had put in motion the process of rehabilitating all the IDCs across the country.
Radda whose office supervises all the 23 IDCs in Nigeria said the government had plans to transform the centres into world-class enterprise clusters for rapid economic development geared towards job and wealth creation.
He disclosed that SMEDAN in collaboration with the African Development Bank (AfDB) carried out a study of the viability of the centres. The bank, according to him, sponsored the study at a cost of more than $600,000 for the six months period; the report of which he disclosed had been submitted to the government.
While nothing has been done since then, Radda would also in November of the same year re-echo that the Federal Government had put in motion the process of rehabilitating all the IDCs.
He was leading members of the Senate Committee on Industries on an oversight function to the Owerri Centre, and said the agency had commissioned a study in collaboration with the AfDB) on how to rehabilitate the centres.
“I believe that by the end of June, the project with the bank will come to a conclusion. What we are waiting for is the submission of the full business scale for six out of the 23 centres,’’ he said.
Kano IDC—receives only empty promises—now a cattle grazing field
Kano Industrial Development Centre in Tiga town off Kano, Zaria road collapsed in 1999, says Ahmad Yaro, an Administrative Staff at the centre.
Yaro is one of the remaining six workers at the IDC as it is called by people of Tiga. The centre was established in 1982 but suffered a great setback when the Federal Government under former President Olusegun Obasanjo ordered a downsizing of the civil service.
Inside its wide expanse of land were cattle grazing on dried grasses while structures with blown roof stood derelict. Offices were covered in dust, ceiling, doors and windows were broken. There were no signs of life on the premises.
“At the initial stage of my appointment, here was booming but all of a sudden, everything crumbled during 1999 rightsizing and downsizing activities of the Federal Government,” Yaro recalled with nostalgia.
“No activity has taken place here since 1999,” he added.
Asked about the machines at the centre, Yaro said, there were machines but they were not functioning because they were all obsolete.
According to him, six employees are currently working at the centre, including its Coordinator whose office is in Zaria, Kaduna State.
Due to the peculiarities of Kano for leather production, the IDC was intended to be a hub for leatherwork, but Yaro said the centre which also ought to carry out business appraisal has not witnessed any productive activities for years.
This is despite claims by SMEDAN that the Tiga IDC was in the process of being converted to a world-class leather cluster park.
That’s not the only thing that is wrong with the centre, its location is also part of the reasons for its abandonment. The Centre is located the outskirts of Kano, making it difficult to access. the location is hundreds of kilometres away from the heart of Kano city.
After spending more than two hours searching for the industrial centre, this reporter got help from an official of the Kano State Chambers of Commerce and Industry who gave a hint of its location. He simply said the IDC is located in Tiga town —but without giving a specific address or a landmark.
Before then, officials of Industrial Training Fund (ITF) in the city could not even make sense of the name Industrial Development Centre when asked. None among those asked had heard of it before, likewise artisans along Hadeija road in the city.
Situated on Kilometre 1 along Tiga Hydro Electric Power Project, Kano IDC stood forsaken by the roadside. It is a shadow of its old self.
The signpost that welcomes visitors has long faded. Only eagle-eyed visitors could see it from afar.
At Port Harcourt —Farmers now resident in the industrial complex
Farmers are the ones tending the abandoned Rivers State IDC located in Port Harcourt. While the Federal Government continue to sloganeer about rehabilitation without taking action, those interested in crop production are not allowing its fertile soil to waste away.
The centre has been long abandoned, overtaken by weeds and parts of it already converted to farms by some people who tend the facility.
The reporter saw four farmers taking rest in one of the workshops after the day’s work. It had just rained that afternoon, and the farmers were snacking on pawpaw.
Apparently, the centre has not worked or used for any industrial purpose in a long while. The ICIR was reliably informed that equipment—mostly fabricating machines— installed at the centre were never used up till most of them were vandalised, stolen, or became obsolete.
The roof of the workshops is partly blown off by storm while an old Volkswagen car sits in the middle of the hall. The large workshop is littered with remnants of obsolete wooden and metal works equipment. The entire premises is covered with overgrown grasses.
Tired of idleness, staff at the centre, it was learnt, have stopped coming to work. When there is training to be organised, trainees are usually taken elsewhere due to lack of appropriate machines for practical work, The ICIR learnt.
Asked about the procedure to secure a space allocation by an entrepreneur, one of the men taking shelter in the large workshop responded that no one has been given any space in a long time.
“We have not received any information from Abuja about the allocation of space to anybody,” he said.
He insisted that order must come from Abuja before anything can be done.
“Here, we cannot do anything, we don’t have that power to do anything and nobody has been given any allocation here as you can see,” he says.
The Centre has been abandoned for so long that no local seems to know its location in Port Harcourt, including those who live around or operate businesses along NTA Road, Ozuoba where it is located. Nobody could say the type of activities that take place within the large premises.
“The place is called ‘Industrial Gate’,” says a middle-aged woman who roasts ripe plantain adjacent the centre, though there are no signs of any industrial activities taking place there at the time.
Only a few locals know it as ‘Industrial Gate’—the large almost faded signpost rests somewhere on the fence near the pedestrian gate, covered by trees nearby which make it hardly noticeable for passers-by.
Sam Egwu, a former Chairman Senate Committee, once likened the centre to a mechanic workshop when he led members of the committee on an oversight function visit. He said the visit showed that the IDC only exists in name.
This investigation was supported by the International Centre for Investigative Reporting (ICIR) and the Ford Foundation.