Nigeria: Will Kano governor’s demolition spree scare off investors?

Yusuf, aka Abba Gida-Gida, has been on a tear to reverse key actions of his predecessor, moves that have earned him the nickname “the demolisher”.

A cartoon in a local newspaper depicting Governor Yusuf in a bulldozer demolishing buildings aptly sums up the first 30 days of the Kano governor. In his first few weeks in office, Yusuf has been more synonymous with demolition than construction and has even been present at the demolition of some buildings.

A vendetta in Kano State

From multi-billion-naira commercial buildings to state-of-the-art facilities either already demolished or marked for demolition, the governor has continued to carry out activities his critics have tagged as a vendetta against his predecessor.

He has been compared with the erstwhile governor of neighbouring Kaduna State, Nasir El-Rufai, who also carried out a spree of demolition of residential and places of worship considered to have been illegally constructed.

But while the case of Kaduna was that of individuals or groups taking over government lands without legal backing, developers and other property owners affected by the ongoing demolition exercise in Kano do not fall in this category.

Most if not all of them acquired the titles for their lands legally from the immediate past government, which the incumbent government now considers a transaction that had no legal or moral justification.

‘Restoring’ the urban plan

Among many campaign promises, Yusuf had told the electorate of his desire to “restore” the Kano Urban Development Master plan, which would see to the removal of structures he believed were illegally erected in public spaces, including those within and around schools, places of worship, hospitals, and green zones in the state.

His predecessor, Abdullahi Umar Ganduje had come under heavy criticism on what many had called the bastardisation of the city’s master plan, where plots were allocated to investors, seen mostly as his cronies, in public spaces, to develop multi-storey business plazas.

Plots belonging to hospitals, schools and even places of worship were given to developers to erect commercial and residential buildings.

Thus, weeks before taking the oath of office, the incumbent governor, then as governor-elect, had issued a string of public advisories, some of which included a warning to developers on “public spaces” to desist. And during his inaugural speech, he also announced the “take over” of all buildings erected on these public spaces “pending the final decision of the government”.

The final decision, which came in the form of demolition just a few days later, had a lot of people wondering why the governor had failed to “properly investigate” and give the owners of these properties a fair hearing.

Billions lost

Although the losses incurred have not yet been verified by any financial firm, the Coalition for Good Governance and Change Initiative, a non-profit that recently organised a protest, accused Yusuf of destroying property worth N226b ($301.3m) in his first three weeks.

Some four properties were demolished in his first days in office, including a three-storey complex with 90 shops near the wealthy Nasarawa GRA neighbourhood, the three-star Daula Hotel reconstructed by ex-Governor Ganduje administration under a Public-Private Partnership arrangement, a building at the Hajj Camp, which is used for the annual pilgrimage exercise, and a complex of shops at the Kantin Kwari textile market.

A developer of one of the demolished buildings, Lamash Properties Limited, has already filed a lawsuit against the government to seek the payment of compensation of over N10b ($13.3m), alleging it was not given a fair hearing even as it says it has an existing Public Private Partnership agreement with the government to develop the property.

Another property owner has already obtained a court order restraining the government from demolishing his property.

With traders also affected by the demolition of several shopping malls said to have been erected around the state’s popular Eid prayer ground, many of them have continued to count their losses.

Investors’ nightmare

But analysts say the demolition spree could scare away investors in a state that is in dire need of economic development. At least 10.5 million residents are multi-dimensionally poor, according to the National Bureau of Statistics.

Additionally, Kano’s overzealous Sharia police, who go about enforcing Islamic canons by destroying millions of bottles of alcoholic beverages and shutting down businesses, have also slowed down the state’s investment drive, analysts say.

Kano is among the states that failed to attract any Foreign Direct Investment, according to the National Bureau of Statistics (NBS).

Kano has also failed to meet its projected internal revenue target despite being the commercial capital of the north. The state has since been overtaken by Kaduna which now has the highest internal revenue in the north.

Professor of economics at Bayero University, Kano, Garba Sheka tells the Africa Report that the demolition spree would “definitely” affect investors’ confidence in the state because “no reasonable investor will commit his resources in an unsafe environment.”

He said aside from the local investors mostly affected by the ongoing demolition exercises, foreign investors would be more worried about dealing with the government because of the fear that whatever decision is reached with an incumbent government can be undone without due recourse to due process and rule of law by a succeeding government.

“This is why you see for instance whenever foreign investors are bringing money to a country, they always make room for counterpart funding in the form of equity for the receiving government so that the government can protect the investment,” he says.

Different approach

Sunday Michael Ogwu, a business analyst, tells the Africa Report that the government should have been more circumspect in the manner it approached the demolition exercise.

Ogwu insists that beyond what foreign investors may think, which may not be very positive at the moment, local investors would feel the need to tread carefully when dealing with government officials. Some fear that a successive government could render such deals illegal, resulting in losses.

In the whole of the country, there is no governor who has demolished more structures than Nasir el-Rufai (the immediate past governor of Kaduna state). He was like a bull in a China shop.

He said investors would look at the ongoing exercise on how the government deals with the demolition, which he believes does not convey confidence in allowing the rule of law to take its course.

“What is on record is that the titles (of the revoked property) were signed by a legitimate government, whether or not the action appeals to this current government. What investors would have loved to see would have been a demonstration of the rule of law,” he says.

A legal practitioner, Umar Isa Sulaiman, opined that based on the Land Use Act, before embarking on the demolition, the government was supposed to first notify the developer and give all those that have claims to the land the opportunity to defend themselves.

“The principle of fair hearing is clear and sacrosanct all over the world,” he says.

But social commentator and publisher Ja’afar Ja’afar tells The Africa Report that contrary to the fear of many, the demolition exercise may turn out to be such that will encourage investors to invest in the state because according to the governor, the exercise is aimed at sanitising the land allocation process.

Citing an example with the neighbouring Kaduna state, Ja’afar believes Kano may follow this path and become the investment haven of northern Nigeria.

“In the whole of the country, there is no governor who has demolished more structures than Nasir el-Rufai (the immediate past governor of Kaduna state). He was like a bull in a China shop,” Ja’afar tells The Africa Report.

“But Kaduna got the highest foreign investment in the whole of northern Nigeria,” he says, reaffirming that “demolishing illegal structures can affect the investment prospect of a state.”

Notice given, campaign promises fulfilled

A spokesman for the governor, Sanusi Bature, said during the transition period, the advisory that anybody building on a public space should stop had been issued and widely circulated and as such, it was not fair to say the government did not give the people affected ample time before the commencement of the demolition exercise.

He said since the issue had formed the basis of his blueprint with which the governor vigorously campaigned, it would be an act of failing on promises for the governor to allow the structures to continue to “illegally” occupy public spaces.

Bature also believes the development would not have any negative impact on the state’s prospect for investment, noting that the government had plans and policies in the pipeline to make the state rank high on the ease of doing business, which he believes will encourage local and foreign investors to key in.