kano state investors' handbook | 2013

KANO STATEINVESTORS’ HANDBOOK | 2013

A Guide to Business and Investment in Kano State

KANO STATE INVESTORS’ HANDBOOK | 2013www.kano.gov.ng

CONTENTSFOREWORD BY HIS EXCELLENCY, THE GOVERNOR 1

KANO QUICK FACTS 3

INVESTING IN NIGERIA 5An Overview of the Nigerian Economy 5An Overview of the Kano Economy 7

INVESTING IN KANO STATE 8Agriculture 8Commerce 10Manufacturing 12Housing and Construction 13Power Sector 14Transportation 15Solid Minerals 16Tourism 17Public-Private Partnerships in Kano 20

INVESTMENT LEGISLATION AND REGULATIONS 21A1 - Nigerian Investment Promotion Commission Act 22A2 - Entry of Foreign Workers into Nigeria 23A3 - Land Aquisition and Transfers 24A4 - Tax and Reporting 25A5 - Importing and Exporting 27

BUSINESS REGISTRATION PROCESS 31

INCENTIVE PROGRAMMES FOR INVESTORS 34

Free Trade Zones [FTZ] 38

KEY CONTACTS 42

A.

B.

C.

Annex I

Annex II

Annex III

Annex IV

KANO STATE INVESTORS’ HANDBOOK | 2013is supported by

KANO STATE INVESTORS’ HANDBOOK | 2013

It is with great pleasure that I present this Investor Handbook on behalf of the government and people of Kano State. This

is to further showcase Kano State’s readiness to reclaim its glory as a destination of choice for commercial and industrial investments in Nigeria.

The Handbook is intended to provide potential investors with a broad overview of the policy and regulatory environment that they can expect to operate when doing business in Kano. It also provides detailed information on the principal incentives available to enable local and foreign businesses exploit the State's vast economic potentials.

The main challenges are that of optimizing these vast resource potentials, overcoming the provision of infrastructure and financing investment for sustainable development.

This administration's aspiration is to transform the economy, create jobs and prosperity for all. This is anchored on two inter-related strategies:

?To open up the economy to participation by more local and foreign investors

?To develop a strong public and privatepartnership which promotes a strong economy that is private sector driven

Kano desires to partner with the private sector to deliver on the following priority areas:

?A modernized agricultural sector?A dynamic manufacturing sector?A productive Micro-Small and Medium

Enterprise [MSME] sector?An efficient Power [electricity] supply

FOREWORDBY HIS EXCELLENCY, THE GOVERNOR

His Excellency,Dr Rabiu Musa Kwankwaso fnse

Governor of Kano State

FOREWORD 1

?Social housing development?Efficient transportation and road network?Water supply and sanitation?World class tourism and hospitality

infrastructure

In order to ensure the success of our commitment to reform the Investment Climate we have started a number of reform programmes in collaboration with the DFID-funded Growth and Employment in States (GEMS3) project. The project will deliver:

?A more investor-friendly, transparent andsimplified tax system

?An improved land administration that will

make land registration cheaper, faster and more reliable for businesses

?A 'One stop investment shop' to fast trackbusiness registration and establishmentprocedures and hence reduce costs of doing business by prospective investors

?An online Kano Enterprise Portal to deliver business services, training and business information exchange to the Kano business community

In the coming months and years, the government will spare no effort in seeing that an

improved business environment is instituted. In this regard, we will ensure that all government regulations and policies that are relevant to the promotion of trade and investment are implemented.

It is our hope that this Handbook will serve investors, exporters and businesses as a comprehensive and authoritative source of information on Kano State. While all attempts have been made to provide up-to-date statistics and other current details, customised consultations and advisory support can be initiated via the offices of the Ministry of Commerce , o r Kano Sta te Webs i te www.Kano.gov.ng and the Kano Enterprise Portal.

The Government and people of Kano extend a hand of partnership to potential investors and look forward to a mutually beneficial business relationship

His Excellency,Dr Rabiu Musa Kwankwaso fnseGovernor of Kano State


FOREWORD 2


?Created May 27th, 1967 and historically known as the Centre of Commerce in Nigeria

?Strategically located at the centre of northern Nigeria, Kano has served as a major entry port to the nation and as the Southern hub of the trans-Saharan trade route for centuries

?The capital, Kano City, acts as a regional trade hub servicing a market of over 300 million people located in northern Nigeria, neighbouring countries such as Niger, Chad and Cameroon, as well as across the Sahel economic zone/North Africa

?Gross State Product of 15-19 Billion USD [PPP] and a Per Capita income average of $685 US

?Second largest non-oil economy in Nigeria

?Population of Approximately 9.4 million based on the 2006 census, and current estimates at 12 million

?A young, agile and sustainable work force with 50% of the population between 15- 64 years and 47% under 15 years

?population growth rate of approximately 3.5% per annum

KANO QUICK FACTS

KANO QUICK FACTS 3

Kano Quick Facts

?There are over 1,754,200 hectares of cultivable land in the State

?Approximately 1.6 million Micro-Small Medium Enterprises, with 30% run by women

?Key sectors of the economy for growth are agriculture, commerce and manufacturing and their support sectors

?Hosts 400-500 manufacturing enterprises; leading sub-sectors as leather tanning, seed processing, rice milling and animal feed production

?Kano has some of the best infrastructure networks in Nigeria, with well-serviced roads connecting it directly to the capital Abuja and the neighboring States of Kaduna, Jigawa, and Katsina

?Kano is served by a rail link from Nigeria's premier seaport in Lagos in the South to most of the Northern States in the country

?The State is investing N6 Billion in the construction of a flyover in partnership with Transtech Engineering Corporation of China, as well as over N23 Billion in road works in the coming year to improve the road infrastructure

?Kano has an International Airport, the Mallam Aminu Kano International Airport,

which has been in operation since 1936, when the first plane landed in Nigeria. The airport was refurbished in 2012 and it hosts domestic, regional, International passenger and cargo flights regularly.

?In 2010, the World Bank ranked Kano 8th in Nigeria in the ease of Doing Business, ahead of Lagos, Abuja, Kaduna, Cross River, and Enugu

?Kano is home to the Nigeria Commodity Stock Exchange

?Kano is the financial Centre of the North of Nigeria with all 22 banks operating in Nigeria having offices in the State, including the first Islamic Bank, JAIZ Bank

?Kano hosted the first international trade fair sou th o f the Sahara in 1959 to commemorate the 1000th year of its existence and continues to hold annual international trade fair today, including the 2012 Kano-Niger Republic Summit


KANO QUICK FACTS 4

INVESTING IN NIGERIA


?Nigeria is Africa's third largest economy [GDP US$ 238.9 billion] after South Africa [GDP US$ 390.9 billion] and Egypt [GDP US$ 252.5 billion] and accounts for at least 40% of West Africa region's GDP. Currently 40th largest economy in global ranking, but poised to become one of the 20 most influential economies in the world by 2020.

?With a population of approximately 150 million people, it constitutes about half of West Africa's population, 2% of world population and is expected to be among the five most populated countries in the world by 2025. Therefore, Nigeria has a reservoir of skills and a huge market to support

economic expansion.

?Its resource base is vast: Nigeria is the largest oil producer in Africa and 15th largest in the world-with current production of approximately 2.5 million barrels per day. It has the sixth largest deposit of natural gas in the world.

?Nigeria has approximately 30 million ha of arable land-[nearly 40% of its land area]-12 million ha of fresh water sources, covering over 900 Km of coastline and significant ecological diversity which enables the country to produce a variety of crops, livestock, forestry and fisheries products.

An Overview of the Nigerian Economy

INVESTING IN NIGERIA 5

Nigeria has the potential to become one of the strongest agricultural economies in Africa.

?To date over 34 different minerals have been identified for commercial exploitation-and many more other mineral resources have been discovered by the Nigerian Geological Survey Agency and are being captured on the mineral commodity maps.

?Nigeria is rated as one of the fasted growing economies in the world. Growth rates averaged 8% annually over the period 1999-2010. The country also envisages GDP growth rate of approximately 12% per annum [2011-2015]. This would translate to real [nominal] GDP of approximately N428.6 billion [N73.2 trillion]

?The country has several growth reserves: For example, oil reserves currently estimated at 35.2 billion barrels [bb] are expected to rise to about 40 bb. At current extraction rates proven and probable oil and gas reserves are to last for more than 50 years and possible reserves well above 100 years.

?Only approximately 40% of Nigeria's arable land is currently under cultivation with 60% lying fallow.

?Nigeria has a reserve of youthful population. More than 50% of the population is under 18 years of age and the annual growth rate is about 2.8%. This implies that for years to come Nigeria is unlikely to suffer from labour shortages.

With the return of civil rule in 1999, a number of reform measures were introduced. The first was a 5-year comprehensive economic strategy: the Nat iona l Economic Empowerment Development Strategy [NEEDS] covering 2004 - 2007. As a home-grown strategy, the objectives of NEEDS included wealth creation, employment generation, poverty reduction and value re-orientation. These goals were to be

Economic Reforms

achieved through four key strategies, namely;

?Good governance through public sector reform and institutions strengthening

?Creating resilient and competitive private sector which should drive the economy

?Economic empowerment and technical support to the small and medium sized enterprises for higher value output, local content and higher patronage in public procurement

?Mainstreaming the informal sector by easing the processes and procedures of establ ish ing and operat ing formal businesses

The adoption of NEEDS produced some improvement in some key economic indicators like a healthier external debt profile, improved non-oil exports and a more market-based economy. Early results of NEEDS encouraged the quick adoption of its State and local government counterparts in the forms of SEEDS and LEEDS respectively.

In furtherance to a market-oriented economy, NEEDS inspired the Nigeria Vision 20:2020 which was developed for the transformation of the Nigerian economy to the status of 20th largest economy of the world by the year 2020. This is being implemented through medium term National Implementation Plans [NIPs] the first of which is spanning through 2010-2013.

The Transformation Agenda has also been developed for the implementation of the Federal government's economic agenda 2011-2015. Outcomes from the implementation of the first NIP and the Transformation Agenda so far include:

?improved sectorial performance[s] based on better domestic business environment resulting from improved policy formulation, implementation and coordination;

?better fiscal management and discipline using budgetary benchmarks; and

?enhanced local content and participation in public and corporate procurement




Kano State is the commercial and investment hub of Northern Nigeria and the third largest non- oil and gas economy in Nigeria with an estimated Gross State Product [PPP] of US$15-19 billion. Its economy is driven largely by commerce, manufacturing and subsistence agriculture- which is the dominant activity, with up to 70% of the population engaged directly or indirectly.

The MSME [Micro, Small and Medium Enterprises] sector is strong and diverse, with an estimated 1.6 million businesses across all economic act ivi t ies, and contr ibut ing approximately 60-70% of output and employment.

Kano has historically been a major commercial and manufacturing center in the West African sub-region-even before the incorporation of Nigeria into the European system of global commerce. In the pre-colonial period, it served as a major entry port and the southern hub of the trans-Saharan trade route for centuries. In the 1950's and 1960's, Kano provided the bulk of Northern Nigeria's export products of groundnuts, cotton, hides and skins;- Kano's famous groundnut pyramids have become a national emblem portraying wealth and self reliance.

Throughout the 1970's and 1980's, Kano grew

to become Nigeria's 2nd largest industrial and commercial centre with over 500 medium and large scale industries, across all branches of manufacturing activities: textiles and apparels, plastic and rubber, paper and paper products, leather, food and beverages, basic industrial products etc.

Kano is favoured to play a leading role in the Nigerian economy by its location, history and resource endowments:

?Its entrepreneurs have had a long history of contact with strategic markets in West, Central and Northern Africa, the Arabian Peninsula, Europe and the Far East.

?Its huge population of approximately 12 million people would provide enormous market opportunities and serve as a potential reservoir of skills; In terms of population Kano State is 7% of Nigeria, 13% of Northern Nigeria and is even bigger than many successful nation states, such as Switzerland, Singapore and United Arab Emirates.

?Its agricultural sector is huge and provides tremendous opportunities for primary processing and for local resource- based industrialization.

An Overview of the Kano Economy


Agriculture occupies a prominent position in the State's economy as employer of labour, 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-including crop, livestock and fishery production. Crop production with an estimated value of N721.20 billion constitutes more than 50% of Gross State Product. 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], Fibers [cotton and

sisal], Spices [ginger, chili pepper]-all with export potentials. There are similarly horticultural crops that can be successfully grown: banana, sugar cane, onion, mango etc.

Major policy objective of the State is to transform the agricultural sector into an efficient, productive and profitable enterprise-for food security for the population and for the supply of raw materials to the industrial sector.

Policy Thrust

INVESTING IN KANO

Agricultural Sector


INVESTING IN KANO 8


INVESTING IN KANO 9

Government pursues this by:?Prioritizing irrigated farming to compliment

rain fed agriculture

?incentivizing the private sector to invest in the construction of storage facilities and the processing of farm produce to reduce post harvest losses

?Encouraging private sector participation in all sub- sectors of agriculture, either directly or through joint ventures

?Encouraging the integration of crops and livestock farming systems and

?The introduction of drought tolerant crop varieties

The State's enormous potentials for the production of food and industrial raw materials include:

?A total area of cultivable land estimated at approximately 1,754,200 hectares of which 86,500 ha is lowland [Fadama] and about 75,000 ha comprise forest and grazing land.

?A large number of inland water bodies: 58 man-made water reservoirs and natural lakes and rivers with a total surface area of 56,583 ha as well as many burrow pits with perennial water across the State

?Kano's earth dams and reservoirs have capacities ranging from as low as 260,000 CU M [RiminGado] to 1.9 billion CU M [TIGA] and irrigable space ranging from 20 ha to 48,600 ha [TIGA]. The water impounded at these dams is sufficient toirrigate up to 400, 000 ha and provide high potentials for fish production.

?A large population of livestock including over 12 million birds and nearly 10 million goats, sheep and cattle.

Investment Opportunities

These resource endowments provide vast opportunities for crop, livestock and fisheries production; and for the development of the agro-processing and allied manufacturing industries.

The State welcomes investments in the following areas:

?Fertilizers and agrochemicals,?High yielding seeds and seedlings varieties,?Irrigation equipment and infrastructure,?Heavy equipment and machineries

?Rice milling?Flour milling and ?Grains processing

?Animal breeding for domestic consumption and export, especially to the middle east

?Production of milk and milk related products?Establishing a standard abattoir for

processing meat for local and export market?Animal feed processing

?Export of fresh tomatoes?Production of Plum Tomato, tomato paste

and tomato puree?Production of tomato juices?Fresh tomato preservation?Production of sundried tomato

?Large scale production for domestic

consumption and export?Ginnery – for the textile industries

Agricultural Inputs: production and supply of

Processing of agricultural crops:

Livestock Production

Value Chain in Tomato Cultivation

Cotton

Production of edible oils from:

Leather and allied products

Incentives and Government Support

?Soya Beans? Groundnuts? Sesame Seeds and? Cotton Seeds

?Tannery ?Shoe manufacturing?Leather goods

Given its strategic importance to the Kano economy, agriculture is being accorded a priority status by the State. In terms of annual budgetary allocations, the sector is among the top five and a large chunk is deployed in creating an enabling environment for private sector participation in agricultural development. The following are some of the enablers:

?There are three operational fertilizer blending plants, two of which are privately owned to guarantee year-round supply

?Availability of skills and facilities for training in agricultural production and management from Institutes of Horticulture, Poultry, L i v e s t o c k , F i s h f a r m i n g , F a r m Mechanization and Irrigation

?Land Reform to accommodate large scale mechanized farming

?Creation of value chain through the establishment of small scale Agro allied processing industries

?Free extension services to farmers

?Availability of micro credit to eligible small and medium scale farmers

Commerce Sector

Kano, the 'Centre of Commerce' is Nigeria's

InvestmentOpportunities

third largest commercial centre. Wholesale and Retail activities constitute the second largest economic sector of the Kano economy and contribute approximately 10% of Gross State Product.

The commerce sector is predominantly informal, accounting for approximately 65-75% of domestic trading activities. The formal sector remains hugely untapped.

The major wholesale and retailsupply outlets are dominated by large manufacturing outfits [southern Nigeria-based multi-national companies], a few Lebanese [pharmaceutical products], Chinese [textiles and apparels] and indigenous businesses [household consumer provisions, building materials, agricultural produce etc]

The Wholesale and Retail activities include the sale and distribution of imported and locally made goods such as textiles and garments, furniture and fittings, cosmetics, chemicals, pharmaceuticals, vehicle spare parts, building materials, electronics, household consumer provisions and agricultural produce.

There are many outlets in which commercial activities take place: thousands of single street trading posts, neighbourhood kiosks and shops and regular market stalls spread across towns and villages in the State.


INVESTING IN KANO 10



In addition to these, Kano boasts of 16 specialized markets mostly within the metropolis, including:

?The : reputed to be the largest grains and foodstuff market in Africa serving not only Nigeria but neighbouring countries as well. The market has more than 15,000 open shops and 5,000 stores and warehouses of various sizes.

?The Kwari market: Nigeria's celebrated textiles retail and wholesale centre with an estimated annual turnover of N20 billion. The Kwari market serves the North of Nigeria and many parts of West, Central and North Africa.

?The KofarRuwa Market: reputed to be Nigeria's second largest building materials and vehicle spare parts market. It serves the North of Nigeria as well as the countries of Niger Republic, Chad and the Sudan.

Other specialized markets are: Yan lemo [fruits],Yan Kaba [vegetables], 'Yan Katako [wood and wood works], KofarWambai [second hand textile materials, plastics, clocks, calculators and wrist watches], Mariri [Kola nuts], and Singer [general consumer provisions]

?Wholesale trade in locally produced and imported wares especial ly general consumer provisions, building materials, furniture and fixtures, electrical goods and vehicle spare parts

?Retail trade in general consumer provisions through 'super markets' and large shopping malls

?Development of specialized markets on public-private participation [PPP] basis

?Const ruc t ion o f modern shopp ing c o m p l e x e s e s p e c i a l l y w i t h i n t h e metropolitan areas

Dawanau Market

InvestmentOpportunities exist in:

?

facilitiesConstruction of warehouses and storage

Manufacturing Sector

Kano State has long been known for its industrial activities and is still being rated as the second leading industrial centre in Nigeria after Lagos. The state today boasts of over 400 medium and large scale manufacturing enterprises spread across five industrial estates at Sharada, Challawa, Bompai, Tokarawa and Zaria Road.

The leading manufacturing activities include plastic, leather processing, processing of arable seeds [vegetable oil production], grains and rice milling, textiles and garments production-including spinning, weaving and finishing etc. Leather tanning is a dominant activity and a major source of foreign exchange earnings for Nigeria. The Tanneries currently employ approximately 20,000 people, while 40,000 more are engaged in the leather value-chain.

Aside the large manufacturing outfits in Kano State, opportunities exist for prospective investors in the 'traditional' industrial sectors for the manufacture of such products as:

?Edible oil and cake from groundnut, cotton seed and sesame seeds,

?Animal and poultry feed?Meat and dairy products?Leather bags and shoes?Soft drinks and other processed foods.

Other investment opportunities exist in

?Development of 'supportive enterprises’including but not limited to fabrication firms, electrical repair shops and other general mechanical workshops

?Skills acquisition centres

?Manufacturing and commercial ancillary services

The main thrust of State industrial policy is to:

?Establish a structured, vibrant and efficient MSME sector that will generate self-employment and wealth

?Ensure the effective utilization of local-especially agricultural- raw materials in production processes

?Ensure the dispersal of these industrial and commercial production centres beyond the present predominant focus in urban Kano to the outer semi-urban or rural locations

With the recognition of industrialization as an important strategy in a Nation's economic growth, the Federal Government has offered various incentives to prospective industrialists as outlined elsewhere in this Handbook.

The Kano State Government will assist investors in accessing these incentives at the Federal level. It will in addition:

?Provide land for the construction of factories and staff housing on concessionary terms

?Assist in the production of industrial profiles and feasibility studies

?Provide other professional advice to investors


H o u s i n g a n d





Construction Sector


The potentials for housing development in the State are very high. The State has an estimated population of 12 million, 50% of which is young and growing at 3.5% p.a. In addition, there is a huge influx of people from within and outside the country due to Kano's strategic status as the commercial and investment hub of Northern Nigeria.

Urban population has been growing rapidly since the creation of the State in 1967. The eight metropolitan local governments: Kano Municipal, Gwale, Tarauni, Fagge, Ungogo, Kumbotso, Dala and Nasarawa, accommodate approximately 3.6 million people or 30% of the Kano population. Approximately 5.3 million people or 44% of the population is accommodated within the Kano Central Senatorial district that consists of 15 local governments.

Housing delivery in the State has hitherto been largely public- sector driven although the private sector has shown willingness to participate in housing schemes if offered the right incentive. The State Government, through the Housing Corporation and the Ministry of Lands and Physical Planning has evolved and carried out many housing programmes that have impacted both socially and economically on the lives of the people.

The following housing projects are currently being delivered by the State.

?Kwankwasiya City low density residential

and commercial layout located at Umarawa in Kumbotso LGA.- [phase 1 consisting of 675 units]

?Amana City medium density residential and commercial layout at Gurjiya in Kumbotso LGA area- [consisting of 1933 units].

?Bandirawo City medium density residential and commercial layout at Tumfafi in DawakinTofa LGA area-[consisting of 2,613 units]

However, even with these, there will be a massive housing deficit of about 3 million 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.

This deficit will require the utilization of many different approaches and many different players in the housing market. The State Housing Master Plan envisages a private sector housing delivery mechanism where private developers will be given incentives by the government to undertake residential and commercial development projects.

Government will provide all the support necessary for the private sector to exploit the housing potentials of the State. In particular:

?Additional Townships in strategic locations in the State will be opened up on demand by the private sector

?Over 250,000 of plots have been reserved for Mass Housing and commercial development by the private sector through Public Private Partnerships

?Government is committed to provision of basic infrastructure: roads and drainages, water, electricity etc at all sites designated for housing development

?Mortgage Financing is being put in place to


assist the over 40,000 civil servants and other citizens to buy the houses when completed

?Up to 100% foreign and or private ownership of housing is allowed

?Government will ensure that private developers are given long lease on land

?The issuance of construction permits and land titles will be fast-tracked to enable investors obtain funding more quickly from the financial institutions

?There is easy access to information from the Ministry of Land and Physical Planning to help fast track all relevant statutory applications for housing development in the State

Power SectorDevelopment

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.

First, the country has an installed power generating capacity of slightly more than 6,000 MW- 75% of which is currently generated. This is less than 10% of estimated [current] national demand. Second, it is estimated that only about 1,500 MW or 60% of the electricity generated is actually consumed-the rest is lost owing to deficiencies in transmission and distribution capacity. Thus electricity consumption per capita is barely 100 KWh, per below what is obtainable in Egypt [1,051 KWh], Malaysia [>3,000KWh], South Africa [>4,500 KWh] and less than the average for upper middle income countries [2,500 KWh]and for lower middle income countries [1,500KWh]. Finally, even when available, power reliability is less than 40% by time. As a result, many businesses have to rely on alternative sources of power supply, which increases production costs by at least 30%.

The current demand for power in Kano State stands at approximately 500MW. The average daily dispatch is much lower at between 80-100MW, leaving a huge power supply gap of over 400MW.

The projected demand by 2020 is approximately 2,000 MW-and a substantial part of this is expected to come from Independent Power Projects initiated by the State.






The passing of the Electric Power Sector Reform Act in 2005 signaled Nigeria's commitment to reforming the sector. The Act aims to improve the performance of the sector by allowing private companies to invest in and operate power companies in Nigeria. The Government through the Ministry of Power has also outlined a detailed roadmap for reforming the sector in the coming years.

The Kano State Government itself is committed to tackling the State's power problems and is actively collaborating with the Federal Government and the private sector in finding solutions.

In order to fill current and future deficits in electricity supply, Kano State desires to have a private sector driven power sector infrastructure that is:

?efficient, reliable and affordable?driven by cutting-edge technology and ?environmentally friendly in generation,

distribution and transmission

Transport Sector

Investment Opportunities inTransportation

Kano is strategically located owing to its leading position as the commercial hub in sub-Saharan Africa. Transportation is predominantly road-based and currently, the mode consists of taxis, buses and motor cycles, popularly known as achaba.

Kano is linked to Nigeria's seaport in Lagos by rail and to Northern Nigeria's major cities of Kaduna and Katsina by express roads. In addition, fleets of trucks and buses link Kano with many cities in Republics of Niger, Chad, Cameroon and Benin.

The Mallam Aminu Kano International Airport is Northern Nigeria's air transport hub with major airlines operating scheduled and charter flights to major cities in Europe, Middle East and Africa. Domestically, Kano connects to Nigeria's largest commercial centre, Lagos and Abuja, the nation's capital, by local airlines.

As Kano State strives to provide commuters with safe, reliable and affordable options to travel, prospective investors are encouraged to invest in the road and light rail transport sector. In the

short-medium term an estimated 4,000-5,000 long buses would be required to provide efficient and effective transportation system for the State. These would serve an estimated 5 million daily commuters within the State.

Over the longer term, the potentials are higher due largely to a large and growing population and huge commercial activities.

The State will welcome private investments in the following areas:

?Tapping the potent ials of the rai l infrastructure within the Kano metropolis. Government will welcome private sector investment for the development of urban rail transit system

?Development of multi-purpose facility parks, that will include weight-bridges

?Urban and Inter State Bus Services

Government welcomes the participation of, and is willing to collaborate with, the private sector in the provision of transport services and will provide support in matters of loan guaranty, regulation and law enforcement.


Solid Minerals Sector


There are tremendous opportunities for investments in the solid mineral sector in Nigeria. The Federal Ministry of Solid Minerals grants prospecting licenses for investors [both local and foreign] to participate in the exploitation of the vast mineral resources in Nigeria.

Opportunities exist for the exploitation 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 $80billion. This is found in several areas of the State

?Gold: unquantifiable huge deposits mined in several locations since 1920's

?Feldspar and Quartz avai lab le 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

?Rare-Earth Element [REE] economic grades of about 0.4% total REE oxides

?Silica Sand: over 3million tones that can





last for over 40 years at annual production of 60,000 tones

?Several types of Granite and marble deposits

?Precious stones traces of:-Aquamarine, Tourmaline Corundum, Amethyst, Topaz, Garnet, Emerald, Zircon, Quartz of different colours, etc.

Tourism Sector

The people of Kano have a rich cultural heritage that provides enormous tourism and hospitality potentials. 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 etc

The Gidan Rumfa [Emir's Palace] is the oldest and largest traditional palace in Nigeria. It was established by Sarkin Kano Muhammad Rumfa [1463-1499] and has been in use since that time. Equally of importance is the famous Kano Mosque: a modern architectural masterpiece constructed by Sarkin Kano Abdullahi Bayero at the site designated by Sheikh Abdullahi Danfodio. It was a tourist favorite in the 1960s and 1970s when there were few such mosques in Nigeria.

Other places of interest for relaxation and picnicking abound in the State. They include the Rock Castle, strategically located and over-looking the famous Tiga Dam, RurumTourist Lodge, Kano Zoological Garden, Gidan Makama Museum, etc.

Tourists to Kano should not miss witnessing the Durbar, unique in the world because it is the largest procession of colorful horses that portrays the Emir's Regalia dating back to the days ofSarkin Kano,MuhammaduRumfa.

This Durbar is held during both Eid-el-Fitr at the end of the Holy Month of Ramadan and Eid-el-Kabir which is an event marking the 10th Day of the 12th Month of the Islamic Calendar “DHUL HAJJ.” The Emir leads the Durbar with over 1000 participants categorized according to the Hakimai[Chiefs] or titleholders of the Emirate who are fifty-two in number.

The Kano State Tourist Camp, located just near the Central Hotel is an important transit point for European trans-Saharan visitors, a central venue for students and cultural groups. It offers affordable accommodation for tourists who prefer not to lodge in the many luxurious hotels in the city.

Package tours can also be arranged by the Tourism Board, ranging from 3-hour city tour to an all-inclusive tour to places of interest within the state such as Rurum, Tiga and Falgore Game Reserve, as well as outside the state to places such as Yankari Game Reserve the, largest in West Africa.






Specific Investment Opportunities include:

Bagauda World Tourism Resort Zone

Since the creation of the State in 1967, successive governments have assumed the responsibility of direct public funding of tourism and hospitality infrastructure including, and especially, hotels and holiday resorts.Government's current policy thrust is to provide incentives to local and foreign investors to provide excellent tourism and hospitality infrastructure. Government will in particular be keen to support private investment in the development of holiday resorts and five-star hotels. Government is open to discussions on the management of the existing holiday resort at Tiga.

?Over 3,000ha of free land for Tourism Development

?Convergence of two [2] rivers Tiga and Bagauda with potentials for an Independent Power Project to power the entire north-west geo-political zone

?Easy accessibility by road from the Federal Capital Abuja and other northern States

?Proximity to the city and the Mallam Aminu Kano International Airport

Potential investors will benefit from the following incentives and Government Support:

?Government to provide Land and Basic Infrastructure

?Tax Holiday?Up to 100% foreign ownership?Improved infrastructure with a proposed

plan to link the zone with the city and Airport by metro line

?Government's initiative to establish Police and Army outposts in the zone to increase security.

Wonderland and Night Safari

There are similarly opportunities for the development of Night and Day Zoo, Theme Parks, Hotel and Restaurants, Cinemas and Holiday Villas

Potential investors will benefit from the following incentives and Government Support

?Availability of about 100ha of land reserved for the development of an international standard Horse/camel racing arena

?About 100 ha of land reserved for the development of an international standard Golf Course with a 5 star Hotel available for potential investors

?Premium land along the TIGA River exclusively reserved for luxury vacation villas and condominiums.

Public –PrivatePartnership [PPP]arrangements in Kano

The Infrastructure Concession Regulatory Commission [ICRC] Act of 2005 established the legal framework for PPP infrastructural development in Nigeria. The ICRC Act provides for the participation of private sector financing, construction, development, operation and/or maintenance in Government infrastructure projects through concessions or other contractual arrangements. The Act established the Infrastructure Concession Regulatory Commission to monitor and regulate PPP related concessions.

Kano State does not have any PPP office established by law. There are however, a set of informal guidelines through which PPP projects are effected in the State. These informal guidelines regulate, promote, develop and monitor PPP infrastructural projects in the State. The Kano State PPP guidelines are designed to:

?P r o v i d e t e c h n i c a l a s s i s t a n c e t o government agencies involved in the procurement and management of PPP projects

?Evaluate proposed PPP initiatives

?Facilitate public financing for PPP projects

?Prepare strategic master plans for PPPs

?Moni to r the per fo rmance o f PPP concession agreements

PPP Requirements in Kano State Government

Under the guidelines, State Government- originated projects have a detailed feasibility study carried out by either external consultants or Government officials. In the case of an unsolicited proposal emanating from the private sector, the interested party will first of all contact the relevant Ministry, Department or Agency [MDA] to ensure that its proposition is in line with the plans of the agency and the Kano State Government.

Thereafter, prospective partners are to prepare and submit a comprehensive project proposal through the specific MDA. The proposal should contain the following amongst others:

?Nature and scope of the project

?Specific objective that can be met through the project

?Detailed financial plan including source of funding, projected costs and revenues including minimum of 5 years financials

?Feasibility study showing technical, economic and financial sustainability.



Annex I

INVESTMENT REGULATION AND LEGISLATION

N P D Y A H SD IN CAL A LF PO LY AR NT NS II NN GI

M

The Nigerian Investment Promotion Commission [NIPC]The Niger ian Investment Promot ion Commission [NIPC] Act of 1998 is Nigeria's principal investment law and governs the entry of foreign direct investment into the country. The Act established the NIPC as an agency of the Federal Government of Nigeria based in Abuja.

Some of the key provisions of the NIPC Act include:

?100% foreign ownership of companies in all but the petroleum sector

?No enterprise shall be nationalized by any Government of the Federation and that no law can force an investor to surrender his interest

?The Government may acquire property under circumstances of national interest, however in such cases the investor is entitled to fair, adequate and prompt compensation and recourse to the courts

?In cases where a dispute between the State and a foreign investor are not settled amicably, recourse to arbitration can take place either via the settlement mechanism of the bilateral or multilateral investment protection agreement of which they are parties or via other national or international dispute settlement mechanisms, as mutually agreed.

?Foreign companies are required to incorporate local subsidiaries or branches

?Financial statements must be prepared annually and filed with the Corporate Affairs Commission [CAC].

Foreign Exchange Transactions

The Foreign Exchange [Monitoring and Miscellaneous] Provisions Act of 1995 guarantees an investor the free importation and convertibility of foreign exchange and the unconditional transferability of the following:

?Net dividends or profits attributed to an investment

?Debt service payment on foreign loans

?The remittance of proceeds resulting from the sale or liquidation of an investment

Equity share capital must be brought into Nigeria through authorized dealers [banks]. The remittance of dividends is permitted provided the share equity was imported. There are no restrictions on the percentage of profits that may be distributed as dividends. The remittance of interest, royalties and technical fees is permitted, provided the royalty contracts and technical fees have been approved by the National Office for Technology, Acquisition and Promotion.

A Certificate of Capital Importation is required to undertake these transactions. The Central Bank guarantees unconditional transferability and repatriation of funds for Certificate of Capital Importation holders. Certificates of Capital Importation are issued by the commercial bank through which the investor is importing the capital, and the investor is required to submit the following documentation:

?A formal letter of application explaining that the funds remitted to Nigeria represent the foreign investors capital contribution to the


INVESTMENT REGULATION AND LEGISLATION 22

equity of the company

?A board resolution of the company of the investor authorising the foreign investment

?A copy of the certificate of incorporation of the company

?A copy of the SWIFT message from the remitting bank

The commercial bank will issue the Certificate of Importation within 24 hours of the importation of capital [conditional upon receipt of the required documen ta t i on as de ta i l ed above ] .

The Nigerian Immigration Service in the Federal Ministry of Internal Affairs handles immigration issues. The Immigration Act of 1963 is the key piece of legislation governing the entry of foreigners into Nigeria. The Act provides for both short-term business visas and longer term work and residence permits for foreigners provided certain pre-conditions are met

Business visitors to Nigeria must pre-apply, for a business visa. Applications for business visas can be submitted at the local Nigerian mission in the visitor's home country. To secure a business visa the applicant must provide evidence of the following:

?Sufficient funds to sustain themselves in Nigeria

?A valid return ticket

?A letter of invitation from a business

Entry of Foreign Workers into Nigeria

Business Visas

organisation or other institution in Nigeria stating the reason for travel and accepting immigration responsibilities of the applicant [ i .e . accommodat ion , sus tenance, transportation and repatriation costs, if required].

Business visas can be secured for between 90 days and 6 months and are not valid for employment or remuneration. However, ECOWAS citizens do not need to pre-apply for entry visas into Nigeria.

Visitors to Nigeria providing specialised services can apply for temporary work permits. The requirements are the same for the business visa, with the exception of the evidence of sufficient funds. Application for temporary work permits are submitted at the office of the Comptroller General of the Nigerian Immigration Service in Abuja. Temporary work permits are not valid for more than 90 days.

Foreign investors can also apply for longer-term work permits [for up to three years] under the Expatriate Quota [EQ] scheme.

Under the EQ scheme, a foreign investor can apply to hire expatriate workers to designated positions. EQ applications can be submitted at the Ministry of Internal Affairs or through the Nigeria Investment Promotion Commission [NIPC} and the following are the key requirements:

?The foreign investor first secures a Business Permit [BP] and then applies for the right to hire expatriate workers for

designated positions, the EQ

?The applicant completes Form 1 which requires them to list the posts for which expatriates are required, their qualifications and details of training schemes for Nigerian understudies [the EQ scheme requires that two Nigerian understudies be nominated for each designated position and that they be trained with a view to take over within three years]

Work and Residence Permits



?The completed Form 1 must be submitted with a receipt of payment of the form fees; the applicants Certificate of Incorporation; joint venture agreement [where applicable]; tax clearance certificate; lease agreement for operating premises; evidence of imported machinery [Form M, pro forma invoice, shipping documents, pre-shipments inspection documents] and details of the proposed annual salaries to bepaid to expatriates.

?Upon approval of the EQ application, the applicant then applies for a Subject to Regularization [STR] visa for the expatriate staff they are hiring. Applications for the STR visa can be submitted at the local Nigerian mission in the expatriate's home country. Upon arrival in Nigeria, the STR visa holder is eligible to obtain a work and residence permit known as the Combined Expatriate Residence Permit and Aliens Card [CERPAC], which is valid for two years.

ECOWAS nationals and Free Zones are not subject to the EQ and residence permit processes.

Foreign nationals can also apply for Permanent Until Reviewed [PUR] status. The main reason for the granting of PUR for which a Certificate would be issued, is to enable the foreign national to adequately protect their interest and to give them a sense of greater commitment.

The criteria and documents required for PUR are:

?Minimum share capital should be 10 Million

?Appreciable net profit of which not less than 2 million has been paid as Corporate Tax [original to be presented for sighting]

?Certified and Detailed Audited Account

?Certificate of Incorporation

?Monthly Returns of Expatriate Quota

?Company Organisational Structure

?Individual Income tax Clearance Certificate of the expatriates [original to be presented for sighting].

Other factors that would also be considered when considering PUR request include:

?Political / policy direction of Government

?Company's area of business to fall within priority sectors of the Economy

?Evidence that PUR would guarantee Technology transfer

?Company should have large quota portfolio and Corresponding share holding as an added qualification.

The Land Use Act of 1978 is the key piece of legislation relating to land access in Kano State and Nigeria. Under the Act, State Governors grant statutory rights of occupancy and determine lease conditions on both urban and non-urban land, with lease periods of up to 99 years for residential plots and 40 years for industrial plots. All land in Kano State are administered by the Ministry of Land and Physical Planning, which has the responsibility of advising the Governor on the management of land in the State.

Nigeria has no restrictions on property ownership by non-residents. For non-residents the key pre-requisite for accessing land is the local incorporation of entities registered outside

Land Acquisition

DN PA H YD SN ICA AL LF PO LY A

R NT NSI INN I G

M





of Nigeria.

Property of any kind in Nigeria can be purchased through a broker or real estate agent. In both cases the transaction must be submitted to the State Governor for approval of the final Certificate of Occupancy or Title to the land. The Certificate of Occupancy in Kano is issued by the Ministry of Land and Physical Planning.

The procedures and requirements for land application in Kano State are as follows:

?Purchase of application forms and payment of processing fees

?A current tax clearance certificate

?Sworn declaration of age/birth certificate and three passport photographs [for residential purposes]

?Certificate of registration [for companies]

?Application for the establishment of Islamic School is to be endorsed by the Shari'a Commission and Directorate of Special Service and Council Affairs, accompanied by five copies of the site plan and recommendation from the planning authority [in case of urban centers] or physical planning department of the Ministry [in case of non designated urban areas].

?Applications for Mosques/Churches require clearance from the Kano State Emirate Council and Special Services Directorate

?Persons under the age of 21 years are not legally entitled to land allocation or assignment.

Tax and Reporting

Tax Registration for Businesses

Corporate Taxation

Nigeria's federal structure provides for the allocation of taxation at each tier of government [i.e. the Federal, State and Local Government levels]. Corporate income, education tax, withholding taxes [corporate institutions], oil and gas production taxes, value added tax [VAT] and import duties are imposed by the Federal Government. Personal income tax, withholding taxes [individuals], stamp duties, road and gaming taxes are collected by State Governments. Local Government collects social and commercial permit levies, fees and charges.

Taxation of corporations is provided for under the Companies Income Tax Act. While Nigerian companies are taxed on their worldwide income, foreign companies are liable only as regards the portion of their profits attributable to businesses carried on in Nigeria.

The corporate income tax rate in Nigeria for non-oil and gas companies is 30%, with the following allowances:?Annual capital allowances [10% on

buildings, 25% on plant, 20% on furniture and fittings] supplemented by substantial initial year allowances, with agriculture and mining act ivi t ies having especial ly favourable initial tear allowances. The deduction of capital allowances is capped at two thirds of annual assessable profits [with the exception of agricultural activities] and the total allowance is limited to 95% of the asset cost.

?Add i t i ona l i nves tment a l l owances [reconstruction investment allowance] of 10% are allowable on all plant and equipment.

A range of transaction taxes are levied in Nigeria, including the following:

?Value Added Tax [VAT] of 5% is levied as a consumption tax on the supply of goods and services. Exempt goods and services include basic foodstuffs, medicines, medical devices and medical services, and exported goods and services. Some items are zero-rated.

?Education tax rate of 2% is payable by all resident companies.

?The Petroleum Profits Tax [PPTA] Act of 2007 provides for the taxation of companies involved in the exploration and extraction of petroleum. Under the Act the tax regime for exploration and production companies is set at 85%, a lower rate of 67.75% is applicable until the amortisation of pre-production expenses and a rate of 50% is applied to Production Sharing Contracts [PSCs].

?Capital gains tax of 10% is levied on the disposal of property, while the sale of shares and stocks are exempt. Non-residents are subject to the capital gains in Nigeria only on the disposal of fixed property, held directly or indirectly, located in Nigeria.

?Stamp duties are charged by both Federal and State Governments on various commercial and legal documents, such as transfers of deeds, insurance policies and bills of exchange

?Withholding tax is applicable on specified transactions and at specific rates depending on the beneficiary of the payment [sees the Table below for more details]. Whole or partial exemptions from withholding tax

Transaction Taxes

exist on foreign loans depending on the tenor.

Liability to Personal Income Tax does not depend on the domicile or nationality of the tax payer. Income arising from a trade, business or profession inside or outside Nigeria is liable for income tax in Nigeria if the tax payer is a Nigeria citizen. Foreign residents are equally liable in Nigeria if their Income originates from activities in Nigeria. The following are worth noting:

?Personal Income Tax rates are progressive up to 24%.

?1% of annual payroll is to be paid to the Industrial Training Fund

?For social security, an employee must contribute a minimum of 7.5% of earnings,

while the employer must make a pension contribution at a minimum of 7.5% of the employees' basic salary, transport and accommodation allowance.

Reforms in Nigeria on taxation are tending towards increasing indirect taxes and at the same time reducing direct taxes for better efficiencies. To this end a new Personal Income Tax Act Amendment, 2011 is just being implemented and this has given more allowances to individuals under the Act.

In Nigeria, certain types of income are exempt from income tax. Exempt income includes:

?The profits of any company engaged in ecclesiastical, charitable, or educational activities of a public character in so far as such profits are not derived from a trade or business carried on by such company; and

?The profits of any company formed for the purpose of promoting sporting activities where such profits are wholly expendable for such purpose.

Personal Income Tax

Tax Exemptions





Nigerian not-for-profit companies may also apply to the President for an order exempting them from all or any profits from any source.

The Federal Inland Revenue Service [FIRS] recently issued guidelines stating that all NGOs are expected to register with the nearest Integrated Tax Office [ITO] of FIRS with the following documents:

?A copy of registration certificate issued by Corporate Affairs Commission [CAC];

?Cert i f ied copy of Memorandum or Constitution, Rules and Regulations governing the NGO;

?List and Profiles of the Trustees/Board Members nomina ted ; one o f t he Trustees/Board member must be a serving government official from relevant MDA responsible for the activity of the NGO;

?Copy of the current Tax Clearance Certificate [TCC] of each of the Trustees. [Paragraph 5 of the Guidelines On The T

Double taxation occurs when the same transaction or income source is subject to two or more taxing authorities. This can occur within a single country, when independent governmental units have the power to tax a single transaction or source of income, or may result when different sovereign states impose separate taxes, in which case it is called international double taxation. The source of the double taxation problem is that the taxing jurisdictions do not follow a common principle of taxation. One taxing jurisdiction might tax income at its source, while others will tax income based on the residence or nationality of the recipient. Indeed, a jurisdiction might use all three of these basic approaches in imposing taxes. Nigeria has signed DTAs with these countries namely: Belgium, Canada, France, The Netherlands, Pakistan, Philippines, Romania, South Africa and the United Kingdom. Agreements with China, South African and Sweden are awaiting ratification.

Double Taxation Agreements [DTAs]

Most goods may be imported into Kano State through any of the country's sea or airports without restriction. However, the importation of certain goods specified by government notice is permitted only subject to the issuance of an import permit. All second-hand goods, including waste and scrap of whatever nature, require an import permit. For goods subject to restriction, importers must be in possession of the required permit before the date of shipment.

The Nigerian Customs Service controls the issuing of permits, but additional and prior authorisation may be required from other departments with jurisdiction over the control of the goods in question.

For a complete list of goods currently subject to import control and updated procedures an importer should approach the Nigerian Customs Service or its website [www.customs.gov.ng]. Permits are valid for the period given and should be applied for in time as stated in the procedures prior to shipment.

Importing and Exporting

Import Permits

IMPORT GUIDELINES

?Any person intending to import physical goods into Nigeria shall in the first instance process Form "M" through any Authorized dealer bank irrespective of the value and whether or not payment is involved.

?The Form "M" shall have a validity period of six months for all imports except Plants and Machinery which shall have a validity period of one year. Requests for subsequent revalidation thereafter should be directed to the Director of Trade and Exchange Department at the Central Bank of Nigeria.

?Supporting documents shall be clearly marked "Valid For Forex/Not Valid for Forex" as appropriate i.e. depending on whether or not foreign exchange remittance would be involved.

?All applications for goods subject to Destination Inspection shall carry the “BA" code, while those exempted shall include "CB" in the prefix of the numbering system of the Form "M". Payments for goods exempted from Destination Inspection under the Scheme, would not be carried out in the Foreign Exchange Market, without a prior approval from the Central Bank of Nigeria. The list of goods exempted from Destination Inspection shall be as approved by the Minister of Finance and the approval shall be a pre-condition for the completion of Form M exempted from Destination Inspection.

?The Form 'M' and the relevant pro-forma invoice [which shall have a validity period of three months] shall carry a proper description of the goods to be imported to facilitate price verification viz;

?Generic product name, i.e. product type, category

?Mark or brand name of the product where applicable

?Model name and or model or reference number. where applicable

?Description of the quality, grade,

?s p e c i f i c a t i o n , c a p a c i t y, s i z e , performance etc.

?Form 'M' shall be valid for importation only after acceptance by the relevant Scanning /Risk Management Provider. Consequently, Authorized Dealers are to confirm acceptance of the Form M before proceeding with other import processes.

?Documents in respect of each import transaction shall carry the name of the product, country of origin, specifications, date of manufacture, batch or lot number, Standards to which the goods have been produced [e.g. NIS, British Standards PD. ISO, IES, DIN, etc].

?All goods to be imported into the country shall be labeled in ENGLISH in addition to any other language of transaction; otherwise the goods shall be confiscated.

?Where import items such as food, drinks, cosmetics, drugs, medical devices, chemicals, etc. are regulated for health or environmental reasons, they shall carry EXPIRY dates or the shelf life and specify the active ingredients, where applicable.

?Electrical appliances [fluorescent lamps, electric bulbs, electric irons and ties, etc] shall carry information on life performance while cables shall carry information on the ratings.

?All electronic equipment and instruments shall carry:

?Instruction Manual;?Safety information and/or safety signs;?A guarantee/warranty of at least six

months.

?All computer hardware, software, operating and embedded system shall continue to be Year 2000 compliant

?Any wrong or fraudulent misrepresentation of facts will result in delays and/or impoundment/seizures.



?Importation of Blank products and/or without valid Form 'M' shall automatically qualify for seizure and destruction without warning, and subject to prosecution.

?All imports into the country shall be accompanied by the following documents:

?Combined Certificate of Value and Origin [CCVO], and contain the following details in addition to those on the pro-forma invoice:

?Form "M" no.?Adequate description of goods?Port of destination [the actual port shall

be specified e.g. Tin Can, Apapa, Kano, Onne, etc.]

?Shipment identification, date of shipment, Country of Origin, Country of supply

?Packing list?Shipped/ Clean on Board Bill of

Lading/Airway bill/Way bill/Road Way bill

?M a n u f a c t u r e r ' s C e r t i f i c a t e o f production which shall state standards and where it is not applicable, the Phytosanitary Certificate or Chemical Analysis Report should be made available.

?Laboratory test cert i f icates for chemica l s , f oods , beve rages , pharmaceuticals, electrical appliances and other regulated products, where applicable.

?The following procedure shall be adopted for payments for:

?Letters of credit transactions: where the transactions involve issuance of Certificate of Capital Importation [CCI] and or supplier's credit, all negotiating documents and or shipping documents [as may be applicable], must be routed from the Beneficiary/Supplier through his/her bank to the correspondence bank of the issuing bank and thereafter to the issuing bank. For the avoidance of doubt, on no account must banks

endorse or pay on documents which do not comply with the routing outlined above.

?Bills for Collection transactions and Unconfirmed Letters of Credit , documents must come to the issuing bank either directly from the supplier's bank or th rough the o ffshore correspondent of the issuing bank.

Not Valid for foreign exchange transactions [which do not require foreign exchange transfer], the supplier should forward the documents directly to the bank that opened the Form “M”. In addition, applicable returns on non-submission of shipping documents after 90 days in respect of such transactions must henceforth be rendered.

?Personal e ffects : the re levant documents should be forwarded to the appropriate Service Provider. However, where dutiable goods are found to be in excess of the approved passenger concession, they shall be liable to the clearance procedure applicable to commercial goods and accordingly all import documentation requirements must be complied with, failing which they shall be liable to seizure.

?Transactions with Post Landing charges: a retention fee of 5 15% of the project cost as agreed between the importer and the overseas supplier shall be indicated on both the Contract Agreement and the Pro-forma invoice which shall form part of the supporting documents for the registration of relevant Form M. In addition, the stated fee shall not be remitted until a satisfactory evaluation of the project has been undertaken by the Industrial Inspectorate Department of the Federal Ministry of Industry

The Scanning Company shall forward to the Federal Ministry of Industry



[Industrial Inspectorate Department] and the Central Bank of Nigeria, Trade and Exchange Department copies of the Contract Agreement and Pro-forma invoice of such projects for monitoring purposes.

During Destination Inspection, the Nigeria Customs Service shall take cognizance of the value of shipment and Post Landing charges as would have been indicated on the Risk Assessment Report [RAR]

T h e I n d u s t r i a l I n s p e c t o r a t e Department, Federal Ministry of Industry shall thereafter carry out anevaluation of the project and advise the Central Bank of Nigeria accordingly

On receipt of the report of the evaluation from the Federal Ministry of Industry [Industrial Inspectorate Department], the Central Bank of Nigeria shall advise the respective scanning company on the issuance of the RAR in respect of the retained value and the Authorized Dealer advised to remit it to the beneficiary.



Annex II

BUSINESS REGISTRATION PROCESS

OG VE ET RAT NS M O EN NA T

K

Check the availability of company's name with the Corporate Affairs Commission [CAC]

Declaration of Compliance [Form CAC 4] signed before a Commissioner for Oaths or notary public

Pay incorporation fees to the Corporate Affairs Commission at a designated bank

The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank.

The company name reservation lasts 60 days but can be renewed for a similar period.

Prepare the requisite incorporation documents and pay the stamp duty involving the following tasks:

?Preparing and printing the memorandum and articles of association;

?Completing the requisite statutory forms, and

?Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service.

There is a stamp duty office located in the state capital in Kano and housed in the same premises with the CAC.

The common practice is for this declaration to be sworn before a Commissioner of Oaths at the Kano State High Court.

Register the company with the Corporate Affairs Commission which include these documents and forms:

Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VAT. Which must be accompanied by the following:

?Stamped memorandum and articles of association [2 copies];

?Form CAC 3, Notice of registered address; ?Form CAC 7, Particulars of directors; ?Form CAC 4, Declaration of compliance

and the prescribed registration fees;

Filing fee for the certified true copies of company's incorporators to hire a CAC accredited professional, usually a lawyer to undertake the administrative incorporation procedures has been replaced by a new regulation dated 28th day of May 2012.

?Taxpaye r r eg i s t r a t i on i npu t f o rm [TRIF/2006/001 COYS];

?Completed FIRS questionnaire;?Copy of memorandum and articles of

association;?Names and addresses of directors; ?Copy of the certificate of incorporation; ?Name, address of tax adviser; ?Letter of appointment of tax adviser and a

letter of acceptance

Share Capital and Sundry Fees

NGN 1,000,000 of nominal capital NGN 10,000

Every NGN 1,000,000 or less thereofof nominal capital after the firstNGN 1,000,000

NGN 10,000

Filing fee for the certified true copiesof 3 forms[CAC 3, CAC 2 and CAC 7]

NGN 7,000

Company Status Tax Obligations

For newly registered companies within 6 months of incorporation

For companies that are yet to commence business and show up for registration after 6 months of incorporation

No fee

A pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of commencement of business



Register for personal income tax PAYE at the State Tax Office.

Business Premises Registration

Complete registration of business premises at the Ministry of Commerce and Industry.

There is no cost related to this registration.

Currently no investment approval is required, however all investments with foreign participation are required to register with the NIPC. This registration is required for investors to be covered by the treatment and protection clauses of the NIPC Act. Companies investing in an Export Processing Zone are not required to register with NIPC.

Category of Company Tax Obligations

Limited liability company, p a r t n e r s h i p o r s o l e proprietorship

For a medium manufacturing company located in Kano metropolis

Ranges from NGN 600 to NGN 100,000.

NGN 20,000

The annual renewal fee for both categories is the same as initial registration.



Annex III

INCENTIVE PROGRAMMES FOR INVESTORS

To make the business environment attractive to investors, the Federal Government has put in place, an array of incentives. They include various forms of tax relief, such as the Pioneer Status, the Export Expansion Grant [EEG], capital allowances, graduated tax concessions for labour intensive mode of production [the larger the labour force, the higher the tax concession], and a tax credit of 20% for five years to industries that attain the minimum level of local raw material sourcing and utilization. To qualify for the tax credit, the minimum levels of local materials sourcing and utilization by sectors are: agro-allied 70%, engineering 60%, chemicals 60%, and petrochemicals 70%.

Investment in Kano State offers access to various attractive incentives from both the Federal and the State governments. Investors can take advantage of import concessions, tax exemption for exported products, tax reductions for qualifying companies [i.e. pioneer companies, manufacturing companies] and tax deductions for research and development expenses.

?Pioneer Status Tax Holiday?Tax relief for Research and Development?Capital allowances?Unconditional transferability of funds?Remittance of proceeds [net of all taxes] in

the event of sale or liquidation of the enterprise

?Total repatriation of capital should the investor choose to relocate elsewhere

?Investment Protection Assurance?Investment Promotion and Protection

Agreements IPPA

Pioneer status is a profits and dividends tax holiday of up to five years granted to designated pioneer industries. There are currently 69 designated pioneers industries within the agriculture, mining, manufacturing, tourism, property development and utilities sectors. A

Investment Incentives

National Incentives

Pioneer Status

minimum capital investment of 5 million from a foreign owned company [150,000 for a national company] is required to qualify for pioneer status.

Incentives are available through a number of schemes to encourage firms to undertake Research and Development [R&D], with incentives including:

?Up to 10% of profits set aside as a reserve for R&D qualify as allowable expenses

?Expenditure on commercializing R&D qualifies for a 20% investment tax credit

?100% expensing of R&D deemed to include a levy payable to a qualifying R&D institution

?Corporate contributions to R&D carried out by universities and research institutions to be tax deductable up to a maximum of 10% of profits.

A number of incentives are on offer to attract investment to the agricultural sector and these include:?Accelerated depreciation of capital

allowances [up to 95% on some assets in the first year] with deductibility on 100% of profits

?pioneer status for a specific agricultural and agro-processing activities

?1% duty on all agricultural machines and equipment

?Agricultural Credit Guarantee Scheme Fund [ACGSF] administered by the Central Bank of Nigeria guarantees up to 75% of all loans made by commercial banks to agricultural related activities.

Research and Development Incentives

Sectoral Incentives

Agriculture:



Manufacturing:

Mining:

SME Incentives

Pioneer incentives for specific manufacturing activities:

?A 10% inves tmen t a l l owance on depreciation of manufacturing plant and machinery.

?25% investment tax credit on the capital expenditure of local manufacturers of spare parts, tools and equipment provided these are supplied to local businesses or exported

Three-year tax holiday

The Smal l and Medium Enterpr ises Development Agency of Nigeria [SMEDAN] is collaborating with the Government to boost Micro, Small and Medium Enterprises in the State. The initiatives include:

?Revival of the State's small-scale credit scheme

?Establishment of a Business Support Centre

?Establishment of industrial estates, enterprise zones, industrial parks, and clusters

?Partnership with microfinance banks to improve access to finance

?Equipment acquisition scheme

?Capacity building

?Facilitation of the participation of SMEs in the State and international trade fairs and exhibitions to improve access of the wide range of Nigerian products to the US and other foreign markets.

EXPORT EXPANSION GRANT SCHEME [EEG]

The Export Expansion Grant scheme is an incentive to investors for the stimulation of non-oil exports, such as cotton, leather, and cocoa.

To be eligible an exporter must:

?Register with the Nigerian Export Promotion Council [NEPC]

?Be a manufacturer producer or merchant of products of Nigerian origin for the export market [i.e. the products must be made in Nigeria].

?Have a minimum annual export turnover of N5 million and evidence of repatriation of proceeds of exports.

?Submit a baseline data which includes a u d i t e d F i n a n c i a l S t a t e m e n t a n d

information on operational capacity to Nigerian Export Promotion Council

NOTE:

EXPORT CERTIFICATE is required on each consignment for all categories of export whether or not an exporter is eligible for the Export Expansion Grant. The certificate is obtainable from NEPC offices throughout the Federation. FREE OF CHARGE [upon the submission of the pre-shipment documents.

DOUBLE DIPPING into government industrial incentives will not be allowed. [i.e. beneficiaries of EEG are prohibited from enjoying other industrial incentives e.g. Manufacturers Export In-bond Scheme].

Detailed Guidelines for the operation of the EEG can be obtained from the Federal Ministry of Finance or Federal Ministry of Trade and Investment Abuja or the State Ministry of Commerce, Industry, Cooperatives and Tourism





Kano State Incentives

?Availability of land on concessionary basis for the construction of both factories and staff quarters to any investors wishing to invest in the rural areas

?Long lease on land for industr ial development

?Fast-tracking the issuance of construction permits and the registration of property by investors

?Estab l i shment o f Kano One-S top Investment Center KOSIC to facilitate ease of doing business for the investors

Annex IV

THE FREE TRADE ZONES

The Nigerian Export Processing Zones Act of 1992 outlines the legal framework for investment in Nigeria's Export Processing or Free Trade Zones. The Act established the Nigerian Export Processing Zones Authority [NEPZA] to administer and manage all free trade zones in the country. Zones may be managed by public or private entities or a combination of both under the supervision of NEPZA.

Approved Free Zone activities include:

?Manufacturing of goods for export

?Warehousing, freight forwarding and customs clearance

?Handling of duty-free goods

?Banking, stock exchange, insurance andother financial services

?Import of goods for special services, exhibitions and publicity

?International commercial arbitration services and

?Other activities deemed appropriate by NEPZA

?A minimum investment of US$500,000 is required by approved enterprises to undertake these activities in the Free Zones.

Approved Free Zone enterprises can take advantage of the following incentives:

?Up to 100% foreign ownership of businesses

?Exemptions from all federal, state and local government taxes, levies and rates

?Duty free import of capital equipment, machinery, raw materials components and spare parts

?Freedom from legislative provisions pertaining to taxes, levies, duties and

foreign exchange regulations

?Repatriation of foreign capital investment at any time with capital appreciation of the investment

?Unrestricted remittance of profits and dividends earned by foreign investors

?No import or export licenses required in the zone

?Rent free land at construction stage, thereafter rent shall be set by the Investment Management Authority

?Liberalized regime for employment of expatriates

?The Kano Free Trade Zone is located behind Mallam Aminu Kano Airport at Panisau in Ungogo Local Government Area of Kano State, Nigeria.

?It is one of the three Federal Government owned public Free Zones in the country.

?It was established in the year 1998 pursuant to the provision of section [1] of the NEPZA Act No 63 of 1962. However, actual construction commenced in the year 2000.

?It is a fenced area of about 264 hectares of land.

?The zone comprises of a Custom Office, Immigration, Police Station and a security office, that offer 24 hrs services.

?Access to a large Nigerian Market estimated at about 160 million people.

?Nigeria's membership off EconomicCommunity of West African States [ECOWAS] provides access to the West

Free Trade Zone in Kano

Why You Should Invest In Kano Free Trade Zone


THE FREE TRADE ZONES 39

African markets.

?Political and social stability, favourable business environment and strong support by the Government to provide sector initiative through the government economic reform agenda that is private sector driven.

?SWIFT investment approval process.

?Availability of highly skilled and favourable labour force at competitive wage rates.

?Membership of the ACP Lome convention guarantees the count ry 's p roduct preferential access to the EU markets.

?AGOA also provides preferential access of the wide range of Nigerian products to the US market.

?Developed infrastructure and utilities, transportation and communication networks

?Abundant raw materials

Investors within the zone will exempted from income, capital gains, value added or sales taxes and from all Federal, State and Local Government taxes and levies

?Duty free import of raw materials and components

?Duty free import of equipments, machinery and spare parts

?Suspended duty on trade articles

?On site custom processing

?No import or export licenses required

BENEFITS

Tax Incentives:

Customs Incentives:

Immigration Incentives:

Guarantee and Privileges:

ELIGIBLE FIELDS OF INVESTMENT

?No restriction on number of expatriate employee

?On site processing of the immigration documents including combined expatriate resident permit and aliens card

?Repatriation of foreign capital investment with capital appreciation at any time

?Remittance of profits and dividends earned

?Sale of up to 100% of production in the Nigerian custom territory on payment of appropriate duties

?Rest free land during construction

?Up to 100% foreign ownership of businesses allowable

?Prohibition of strikes and lockout

?On site vehicle licensing

?Cheap cost of land lease

?Electrical and Electronics products

?Textile products

?Garments

?Wood products and handcraft

?Leather products

?Rubber and plastic products

?Cosmetics and other chemical products

?Metal products and machinery

?Educational materials and sport equipments





?Printing materials.

?Commercial and office equipments.

?Medical Kit, Optical Instruments and Appliances

?Biscuits, Confectionaries and other food processing

?Pharmaceutical product

?Warehousing, banking, Insurance and other Financial Services etc

?Other activities not listed above but deemed appropriate by NEPZA

?Request for an application form for setting up an Enterpr ise f rom the Zone Administration from any of our Free Zones in the country upon payment of $500 [Five Hundred US Dollars] or the Naira equivalent

?Fill out the form and submit to the administration attached with a feasibility study of the enterprise to be set up

?The Authority will study the application and issue a provisional approval within 7 days of submitting the application

?The free zone will discuss your site with you and allocate a plot of land to you

?After approval, the minister shall be required to obtain operating licence, which will be renewable each year upon payment of the whole amount of rental fee

?Remit your investment capital through local banks located in the zone which will in turn issue a certificate of capital importation or any bank of your choice

?Prepare your building or warehouse space. Investors who are constructing their own

INVESTMENT PROCEDURES:

How to apply

buildings must submit four copies of the full architectural drawings of their buildings for APPROVAL. Area for development should not exceed 70% of the leased land and construction should commence within 3months after execution of agreements.

?Move in and operate.

Ministry of Commerce, Industry,Co-operative and Tourism.www.moc.kano.gov.ng

Honourable Commissioner+234 (0)807 475 [email protected]

Permanent Secretary [Ministry of Commerce]+234 (0)803 590 [email protected]

Director Planning Research and Statistics [Ministry of Commerce][email protected]

Director, Tourism+234 (0)809 516 2854

Director Planning Research and Statistics+234 (0)805 652 4991

Director of [email protected]

Ministry of Planning and Budgetwww.mobp.kano.gov.ng

Hon Commissioner +234 (0)803 701 [email protected]

Permanent Secretary+234 (0)805 443 [email protected]

Ministry of Agriculture and Natural Resourceswww.moa.kano.gov.ng

Hon Commissioner of Agriculture+234 805 267 0440

Director Agricultural Services234 809 078 9368

Office of the Economic Adviser to [email protected]

Office of the Adviser to the Governor on Power+234 (0)803 333 3504

Kano Chamber of Commerce, Industry, Mines and AgricultureTrade Fair Complex, Zoo RoadPO Box 10,[email protected]

President+234 (0)706 567 6860,+234 (0)803 276 6888

Manufacturers Association of NigeriaExecutice Secretary+234 (0)809 981 4099manufacturersnigeria.org

National Association of Small Scale Industrialistswww.nigeriannassi.orgState Chairman+234 (0)802 225 5025

All Farmers Association of NigeriaSecretary: +234 (0)803 331 6011

Key Contacts

OG VE ET RAT NS M O ENN

TAK

Published by the Ministry of Commerce,Industry, Cooperatives & Tourism.Kano State. Nigeria In collaboration with: