Overview
The manufacturing sector is one of the fastest-growing sectors in Nigeria averaging 3-5% growth rate in the past 5 years. The manufacturing sector in Yobe State like many other states in Nigeria is said to be at the level of infancy with a few cottages and
medium-scale manufacturing enterprises spread across the length and breadth of the state. The government is however determined to make sustainable investments in the manufacturing sector by setting up the State Industrial Park comprising various enterprises.
The leading manufacturing activities include plastic, processing of arable seeds (vegetable oil production), grains and rice milling, and fruit processing. Large Investment opportunities however exist for prospective investors in the traditional industrial sectors for the
manufacture of such products as:
- Edible oil and cake from groundnut, cottonseed, 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 centers.
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 centers beyond the present focus in urban Maiduguri to the outer semi-urban or rural locations.
Incentives and Government Support
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.
The Yobe 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.
Pioneer incentives for specific manufacturing activities:
- A 10% investment allowance 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.
SME INCENTIVES
The Small and Medium Enterprises 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 the participation of SMEs in the State and international trade fairs and exhibitions to improve access to the wide range of Nigerian products in the US and other foreign markets.
RESEARCH AND DEVELOPMENT(R&D) INCENTIVES
Incentives are available through several 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 buying R&D institution.
- Corporate contagions to R&D carried out ileitis and research institutions to be tax deductible up to a maximum of 10% of profits.
PUBLIC PRIVATE PARTNERSHIP (PPP) IN YOBE
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.
Yobe State does not have any PPP office established by law yet. However, there are a set of informal guidelines through which PPP projects are conducted in the State. These informal guidelines regulate, promote, develop, and monitor PPP infrastructural projects in the State. The Yobe State PPP guidelines are designed to:
- Provide technical assistance to government agencies involved in the procurement and management of PPP projects.
- Evaluate initiatives of proposed PPP.
- Facilitate public financing for PPP projects.
- Prepare strategic master plans for PPPs.
- Monitor the performance of PPP concession agreements.
PPP Requirements in Yobe 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, contact the relevant Ministry, Department, or Agency (MDA] to ensure that its proposition is in line with the plans of the agency and the Yobe 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.
- The specific objective that can be met through the project.
- A detailed financial plan including the source of funding projected costs, and revenues including a minimum of 5 years of financials.
- Feasibility study showing technical, economic, and financial sustainability.
- Evidence of company registration and Tax Compliance
- Demonstration of technical expertise to successfully execute the project.
- Environmental Impact Assessment