Kaduna Market: We‘re Strengthening Commerce, Empowering Traders – MD

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The Kaduna Market Development and Management Company (KMDMC) has been building a lot of markets in the last two years, should the people of Kaduna state look forward to a spate of commissioning this year?

Certainly, yes. I think these are very exciting times for the Kaduna Market Development and Management Company (KMDMC) as well as Kaduna state in general, especially for the Urban Renewal Programme that is ongoing. We have been developing a number of markets in the urban local governments in the past two years and by the grace of God, we certainly look forward to a couple of commissioning this year.

How many markets have you been building and under what kind of arrangement has the company been executing the projects?

To be honest, I have lost count, we seem to be activating a new market project almost everyday. So far, KMDMC is building 10 markets across the state and has renovated the Sheikh Gumi Market (central market). As for the development models, we have at least three development models; there is the Kaduna State Government (KDSG) funded projects, which are priority projects that are being funded 100% by the state government. These are projects like Murtala Mohammed Square, the Damau Household Milk Farm which we are funding in partnership with the Central Bank of Nigeria (CBN). We also have Joint Ventures (JVs); these are projects where we have established Special Purpose Vehicles (SPVs) to execute. These are projects like Galaxy Mall where we have partnered with a private company like Amsalco Industries Limited as our Joint Venture partner.

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However, the most popular business model, popular in terms of the fact that we have so many of them than the JVs and KDSG funded projects that I mentioned earlier, are the Public Private Partnership (PPP) projects. As we know, the state government under Malam Nasir El-Rufai, has instituted a major push to attract investment to the state. Kaduna state is truly open for business, we have partnered with a lot of private sector investors where we used our land as equity. We always say that in Kaduna state, we don’t have a lot of money but we have a lot of land and so we are always seize the opportunity to capitalize on our land and put it in these ventures as our equity while private sector firms fund the actual construction 100%. That is the model for many of our markets like Kasuwar Barchi, Kawo, Sabon Gari, Kabala, Barnawa, Amaru markets and a host of others.

To a layman, what is the difference between a Joint Venture and a Public Private Partnership since both involve the government on one hand and a private firm on the other?

 A JV is a kind of PPP but it is fundamentally different. For instance, in our JV with Amsalco Industries Limited for Galaxy Mall, we actually created a Special Purpose Vehicle. So, we have kind of created a separate company that would be a joint venture between Kaduna State Government, represented by Kaduna Market and Amsalco. We have established a company and duly registered it with Corporate Affairs Commission with Directors representing both sides, that is KDSG and Amsalco. But for the PPP, this usually focuses more on just the transactions, the exchange of values, negotiations between the two parties. In most of those cases, it’s either the developer has a long lease on the market and gets to operate and manage after the construction, or the lease is only for the duration of the construction, such that afterwards or when the project has been completed, he hands over to Kaduna Market Development and Management Company to manage. That is the major difference between JV and PPP.

Is Kasuwan Magani is one of the markets that was constructed 100% by Kaduna State Government?

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Yes. Kasuwan Magani market is the most modern and the first of its kind in the whole of the West African sub-region. The market is completely off-grid. It has shops and stalls, warehouses, two banks, a clinic and a police station, including a fire service post as well as a modern abattoir and slaughter slabs.

Since the Vice President commissioned the market during the last Kaduna Investment and Economic Summit (KADINVEST 6.0), have people actually occupied the shops?

Kasuwan Magani is a very interesting and dynamic community. Things are changing every moment whether in terms of the security reality on the ground or some other stakeholders’ intervention. We also recall that the reform of the general market was informed by the violent uprising in 2018 and His Excellency’s determination of opening up the community to promote equality of opportunities for the people of Kasuwan Magani. So, what we have done was to rely on the white paper that was put out by the committee that was set up to look into the crisis at the time. And that helped us to identify everybody that was affected by the crisis in one way or the other, particularly the original occupants of the market at the time. So, we had their list and what we did was to give them the right of first refusal in the market and then give them the opportunity to come and be verified. Of course, we did this in partnership with Kajuru local government. So, as at now, that the market has been completed, we have verified and allocated shops to over 600 off takers and these off takers cut across different trades whether it is grains sellers, people selling provisions, or fabrics or what have you.

We ran into a challenge some months ago with the decision of federal and state governments to shutdown telecommunications services, restrict the movement of okadas and tricycles and shutting down of weekly markets. Historically, Kasuwan Magani was a weekly market that operated on Thursdays, we actually have such weekly markets in Kaduna. it’s normal. There is Kawo weekly market which operates on Tuesdays, Kasuwan Monday in Kakuri and Kabala market on Fridays. Usually, what people do is take their goods round those markets. Kasuwan Magani was a market where people converge on Thursdays. So, that was one of the things we are trying to do in terms of sensitisation of the community leaders, to say look government has invested over N2.2 billion on this market. So, it doesn’t make economic sense to use it once a week, that doesn’t show that we have judiciously used taxpayers’ money and you know some of these projects are funded from loans.

So, we have started that sensitisation but with that announcement to shutdown weekly markets, we were going back and forth, trying to sensitise the people and say Kasuwan Magani market is actually a daily market. So, eventually we have been collaborating with the Ministry for Internal Security and Home Affairs, which is one of our key partners and has always been very supportive in everything that we do. The ministry has been able to work with us to impress it on the security personnel and the Divisional Police Officer that this is now a daily market. In spite of this sensitisation and assurances, you have people contemplating whether to pay for the shops or defer to a later date. And then, there is also, unfortunately, the incidents of attacks on communities that have been delaying the full occupation of the Kasuwan Magani market. People are monitoring the security situation to see how soon they will move into the market. But we already have off takers, we have people who are interested in taking up the banking halls, the warehouses and other facilities, the clinic as well. We have also handed over the police station to the Nigerian Police Force. We are well on our way, there are lots of teething problems but we are hopeful.

What is the situation in Sheikh Abubakar Gumi Market right now, have traders and original owners of the shops who were given the right of first refusal taken the offer, or are they still dragging their feet?

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In Sheikh Abubakar Gumi Market, we have several classes of clients and very many scenarios that have come up in the allocation of shops. You will recall that the object of the exercise was to transfer the shops to the actual owners, the traders. We want to remove that parasitic middlemen relationship that existed in the market. We also want to empower our traders to become property owners and to also free up more capital to be able to stock up their shops instead of spending all their earnings paying rent and service charge, or one agency fee or the other. So, we went through a very comprehensive and detailed process of verifying actual traders in the market. When we go to a shop, we try to identify those persons in the shop; are they renting, are they the owners, are the owners the people who actually trade in it or is the owner somewhere collecting rent?

We were able to clean up our data set and eventually, to a large extent, we were able to determine who the traders are, so we opened up the sales exercise after many months of delay due to Covid-19 lockdown. We have had situations where a trader will come and apply and the landlord will also come and masquerade and apply, or put pressure on the trader not to apply. We have times when the trader applied, then the next day we received a letter saying ‘’my name is Sisi Yinka, I wish to withdraw my application, my shop belongs to some orphans and the uncle of the orphans wants to hold it in trust for them.’’ We heard all kinds of stories–a good mix of legitimate stories and hogwash.

So, we have set up a conflict resolution committee or something like that, which meets frequently to sort this out. It was very important for us to be transparent and fair, KMDMC did not want to be judge and jury in their own case. So, we engaged the services of PriceWaterhouseCoopers as our transaction adviser and Dikko Mahmud as our legal adviser and they have been with us every step of the way since conceptualisation of the sales, process flow, to the negotiations, to mortgage to even applying for the shops. We don’t even do the allocation of the shops, we send the verified data and all of those things to PriceWaterhouseCoopers and we had a dedicated online portal for applications. We introduced technology into the process to make it quicker and more accountable.

Yes, a lot of traders have come, I think we have allocated over 4,000 shops, I think the total number of shops in the market is 6,556. People have participated fully in the exercise and we received applications from the general public and from petty traders. The idea is to decongest the market and Ahmadu Bello way. So, we said after we have satisfied those traders who want their shops, we will try to absorb the petty traders who trade illegally around the periphery of the market. Right now, we have issued deeds of shop lease, mortgage was most preferred option and we are happy for that; about 68% of the traders opted for mortgage, so we are very well on the process. We are even at the stage where we are recovering shops from those traders who are occupying them but did not apply. We are saying, ‘’since you did not apply for the shops, this is almost two years, since you are not interested, please give them back to us so that we can allocate them to those people who are interested’’, especially because until may be two months ago, they were trading freely in the shops since 2019. We only collected six months rent and service charge from the traders, this is something that the public does not know; so our traders have also gotten some kind of Covid-19 palliatives in the sense that they have not paid service charge or rent of their shop for over a year.

Kaduna Market Development Management Company seems to be engaged in roundabout renovation now. Is this an added mandate to the new management under your leadership?

No. We have a lot of projects that we are developing. We are always trying to engage with the media, we have several radio programmes like ‘’Daga Kasuwanin Jihar Kaduna’’, a Hausa programme and ‘’ Kaduna Market Matters’’. We are almost always on the radio with our jingles, our officials engage in some phone-in programmes, where people ask questions and generally engage with them. We also spend a lot of money advertising our projects as well. We noticed that these roundabouts are very useful for advertising because we will be able to put our brand out there. I think the brand reputation of Kaduna Market has improved significantly in the past two years; we want to institutionalise that brand and make it a part of fabric of Kaduna state.

We partnered with our PPP investors that I mentioned earlier, to renovate NEPA roundabout. Some of these investors include NEABASS Integrated Services, Dragonstone Consults Limited, Triple A Homes and Mortgage Limited, Urban Shelter Limited, Bina Homes and Allied Resources, BACAB Properties Limited, Fabtagu Global Concepts Ltd, Piyo Global Limited, Powerhill Construction Limited, JDK Resources Ltd, Mystery Logistics Ltd.

The roundabout renovation was also our way of giving back to the Kaduna state government which has been very very supportive. I always say that all of the good work that Kaduna Market has done, has been achieved by the unprecedented support of His Excellency, Governor Nasir El-Rufai and the Deputy Governor, Dr Hadiza Sabuwa Balarabe. We are unable to do anything really by ourselves; everything ultimately is dependent on the magnanimous support that the Governor and his Deputy have been giving us, including all Ministries Departments and Agencies(MDAs) like Kaduna State Urban and Planning Development Authority(KASUPDA), Kaduna Internal Revenue Service(KADIRS) and the Policy Councils that we are members of, especially the Economic Development Council and the Infrastructure Development Council.

We understand that there is cash crunch, we understand that government has invested several billions of dollars building these new roads, building all of these infrastructure, rehabilitating our schools and our hospitals. There is always so much that our government can do and one of the things that I think drives Kaduna Market is we have taken up the identity of a corporate organization. We are very mindful of the fact that we are not a statutory agency of government. The state government has gone through the trouble of approaching the Corporate Affairs Commission and registering a company called Kaduna Market Development and Management Company (KMDMC). We take this responsibility very seriously in terms of our revenue generation, in terms of our efficiency, our operations and how we engage with the public. So, we felt that if the state government can put that responsibility on banks to clean our surroundings, provide one or two services, help the state to beautify our roundabouts, then there is nothing that exempts KMDMC from also stepping up to do its own bit. I think that is why we approached our investors to say let us do this for Kaduna state. It also present us the opportunity to be able to advertise our company for free and the feedback has been nice. It was also a very quick and small project compared to all the other things that we are doing and it was also fun. So, we are looking forward to doing more whenever the opportunity presents itself. Most of these roundabouts were previously managed by KASUPDA, I think now they would be transferred to the Metropolitan Authority and the Kaduna Capital Territory Authority. We would continue to follow up to see if there is any roundabout that has not been taken up and see if we will be allowed to rehabilitate them.

MARKET Facts

-Kaduna Market Development and Management Company (KMDMC) is building 10 markets across the state under a Public Private Partnership;

-Kasuwan Magani market is the only one that Kaduna State Government has funded 100%;

-The market is the most modern and the first of its kind in the whole of the West African sub-region;

-Kasuwan Magani market is completely off-grid and has shops and stalls, warehouses, two banks, a clinic and a police station, including a fire service post as well as a modern abattoir and slaughter slabs;

-Apart from markets, KMDMC has entered a Joint Venture with Amsalco to build the Galaxy Mall;

-The company is also upgrading Murtala Mohammed Square and embarking on the Damau Household Milk Farm project in partnership with the Central Bank of Nigeria (CBN);

-KMDMC has renovated Sheikh Abubakar Gumi Market and has given the traders the right of first refusal in the sale of shops;

-The exercise was aimed at empowering traders to become property owners and to free up more capital for them to stock up their shops, instead of spending all their earnings paying rent and service charge, or one agency fee or the other;

-The sale is being transparently done as PriceWaterhouseCoopers is the transaction adviser while Dikko Mahmud is the legal adviser of the exercise;

-KMDMC is not involved in the actual sale of shops but sends verified data to PriceWaterhouseCoopers;

-The company introduced technology into the process to make it quicker and more accountable as applications were sent to a dedicated online portal;

-So far, over 4,000 shops have been allocated out of 6,556 shops in the market.