Kaduna Markets: Building World Class Commercial Hubs

MUHAMMAD HAFIZ BAYERO, the Managing Director of the Kaduna Market Development and Management Company (KMDMC), has been in the eye of the storm over the sale of shops at the Sheikh Abubakar Gumi market. In this interview, he gave insight into how a few vocal middlemen are misinforming the public and why the company is […]

MUHAMMAD HAFIZ BAYERO, the Managing Director of the Kaduna Market Development and Management Company (KMDMC), has been in the eye of the storm over the sale of shops at the Sheikh Abubakar Gumi market. In this interview, he gave insight into how a few vocal middlemen are misinforming the public and why the company is building several markets across the State.

 

You are building markets, malls, neighbourhood centres, almost everywhere in Kaduna State. Is there a compelling need for them?

Yes. Like you rightly pointed out, we are putting a lot of infrastructure on ground where commercial businesses can take place for two major reasons. One, because we do not have enough, and this has caused the prices of the very scarce ones to skyrocket, making it very difficult to rent places at an affordable rate. Two, where we have them, the infrastructure needs to be renewed because it was built many years ago and over the last twenty, thirty years they have run their course. The way commercial hubs are being set up now has totally changed and this is what informed our decision to remove the old ones and bring in new structures that will support the business of exchange of commodities, which is what will be done, be it market, neighbourhood centres or malls.

But even at the best of times, you see many people displaying their wares on the roads. Are you saying that they can afford to pay for shops or stalls in these markets that are being built?

It is not necessarily a factor of affordability or availability, it is just sheer lawlessness. In Kaduna and even more glaring across Nigeria, people have chosen not to abide by the dictates of the law.  Some of them prefer to cut corners in a bid to make more money. Some people do not want to rent shops, regardless of their costs. They feel that they can display wares on the road and have no operating cost, other than transportation to and from their homes. They are being clever by half, and we are saying that ‘’you cannot use spaces designed for public usage like walking or green areas into commercial hubs.’’ Like I have said, for every activity there is a place designated for it. Until you put some level of enforcement, people will continue to trade their wares on the roads.

Now back to your question on what is being done to ensure that the spaces are affordable for the people. We are aware of that, we know the people that require these shops have little capital. The Governor of Kaduna State, in his usual manner, has done something fantastic to support them by working with Sterling Bank to provide mortgages at single digit with a long tenor to enable them pay back overtime.

There is this fear that the original shop owners will lose out because when these new facilities are built, people with deep pockets will come, pay for them and collect them, since the Government’s prime motive is making revenue. What is the truth of this?

The Government’s reason for doing this is not primarily revenue, unlike what you would expect of the private sector. Of course revenue is an important component of Government activities, but revenue for what? Until you are able to get the residents to buy, revenue will not come. Whether we are building, rebuilding or remodelling, we are giving the owners of the place the right of first refusal. That is very clear. This is why, if we meet a facility with 30 shops, we try to replace it with something that at least has 70 shops. So those 30 shops owners that were there before, get right of first refusal. And after that, any new entrant is free to take a shop in that facility.

We are modernizing them, so we provide other services that were not available before, like fire stations, garbage collection facilities, parking spaces. We are also building a services section for large facilities like the mall, we will have a sewage treatment plant in the premises. What you find in Nigeria is that people just build shops, sometimes they don’t even fence it. They don’t care about parking lots. We are planning these things with convenience in mind. People should be able to visit these locations and do things in a manner that shows order.

As we speak, we have nothing like original owners. We have trader-occupiers and they are our main concern. We will also ensure that no Government official or politician buys these shops. It is a promise we stand by and will deliver on inshaa Allah.

There is this fear even amongst people who will get the right of first refusal. Because the shops are going to be modern and better than before, the cost of renting may erode their capital base. Are you looking into this?

Okay, even the places that most people are complaining about, these are places that belong to Government and for long have been given out to people at a subsidized rate. You look at the market where the most expensive shop per annum is about N45,000   in Sheikh Abubakar Gumi Market. Hundred metres down the road on Ahmadu Bello Way, in the plazas that you have there, the same size goes for at least ten times that amount per annum. So people must begin to pay the real value because you cannot subsidize trade in that manner.

Like I said, it is not only about building shops. We will provide mortgages, help them to formalize their business which will significantly boost the prospects of their business growing in the next ten years. They will have a sub-lease to their property which is like a Certificate of Occupancy. They can then access money from development banks and CBN at single digit interest rates, say 5%, to expand their businesses and trades. All these palliatives are meant to enable traders  buy more goods to put into their business with the hope that they will grow. We want outright ownership, we want traders to own the shops, we don’t want them to rent. It is a dream for every human being to at least own a home and some property. Their children can inherit them when they are no more. By so doing, the government is empowering them to become owners and stop paying rent. There are some people who have been doing that for thirty years in the market, but they still don’t own anything. It is better to pay that as mortgage and at the end, you own something. It is a step in the right direction and we are convinced we are doing the right thing. We are not worried about getting praises so early. Posterity will judge us favourably. 

There is also the issue of the ownership structure. Some of these shops, stalls, have changed hands. That means the person whom the facilities were originally allocated to, must have sold them to some other people. But it is the name of the person that was initially allocated the shops that is in  Government’s database.  Who will be given the right of first refusal in this kind of situation?

Let me clear this erroneous thinking that the market belongs to the traders. It doesn’t belong to anyone but the Kaduna Market Development and Management Company (KMDMC), set up by the State Government. Government is the landlord as far as Sheikh Abubakar Mahmud Gumi is concerned. It gave temporary allocations to certain individuals at different times, over the last twenty years. It must not be misconstrued that permanent ownership was given. The terms and conditions for that temporary allocation were clearly spelt out. In any case, the State Government on the 1st of January 2020 announced that all the shops earlier allocated had been revoked going forward and ownership reverted to KMDMC. Someone cannot just wake up one day and claim ownership over your apartment because they have been renting it for twenty years. The relationship between us and them is that of a landlord and tenant. Many years of this practice cannot and does not change that sort of relationship. It is very clear who owns these shops.

Now you brought the issue of people selling their temporary allocations. They did this erroneously and that is their fault. They did it without recourse to the Kaduna Markets Company. Imagine I am your landlord, and then you sell my house that you are renting to somebody. Will you be able to take me to court because I want my house back? We are saying the relationship is over and we have decided to sell it to genuine traders but we are giving the genuine traders in the market right of first refusal. Or it is like me renting an apartment at N2 million. Then I go and find someone willing to pay N5 million. I move out of the house and allow him to take my place then collect the N5 million from him and instead of remitting the N2 million that I am supposed to remit to the owner of the property, I remit N500,000. So this is the situation that we are facing. But don’t forget that the market company is a revenue generating agency and it has the responsibility of collecting all revenues from the market and ensuring they are swept into the TSA as Internally Generated Revenue (IGR), which in turn is used for the 9 million people in Kaduna State. In 2019, we surpassed our revenue targets by N90 million. 

But the question remains, out of the two people, between the original person who was given the shop and the ‘new owner,’ who will get the  right of first refusal?

The person that will get the right of first refusal is the trader who has his wares in the shop and conducts his transactions daily there, not those who got allocations  and rent out the shops to others as their own type of investment. If you are an investor, we have the Kaduna Investment Promotion Agency. You can approach them with a proposal, they will ensure you get land to build your own market and decide the terms. But this is a Government owned market and now that the ownership is totally with Kaduna  Markets since January 1 2020, we will give the real traders, people who sit in front of the shops and sell wares everyday, the right of first refusal to purchase these shops. 

But some people have more than one shop, how will you handle that? Will you give them right of refusal for all the shops they own, so to say?

We have special cases, where you see shops that have been collapsed into one for a long time. A whole row demolished and is now one shop, which is usually what you see when you go to the wholesale section of the market and in the jewellery section. We have taken cognizance of that. What we do is add up the cost of each shop that was broken down and treat it as one shop. We are willing to do that because of the nature of the business. But these cases are not up to 10% of the situation we have on ground. Arrangements have been made for special cases and they are being addressed. The same thing will be obtainable for people who sell provisions and have large and often multiple shops. In their case, if they want to have six shops, we will give them because they are trading in it. So it is not all doom and gloom as people are trying to present it. 

So what are the unit costs for the different categories of shops?

It ranges from about N450,000 to N2.5 million for shops. They are required to pay 10% of the value of the shop they want and then pay the rest over time. Once they pay the 10% the shop becomes their own and we will only revoke if we they default for many months. We have been hearing that some of them who we thought could not afford,  have begun asking when they can pay, in full. So they might surprise us. But for those who don’t have it, the Governor’s determination to empower traders, mortgage has been arranged at single digit with a seven year repayment period. There is no better mortgage deal for such transactions anywhere in Nigeria.

 

 

Part of the confusion around the sale of Sheikh Abubakar Gumi Market shops in particular, is misinformation. Have you sat down with market leaders for an engagement?

The first time we mentioned to the Central Market Union that we were having thoughts of selling the shops to owner-occupiers, was eight months ago. It wasn’t a secret and we did not come like thieves in the night. They were aware that this was going to be a possibility for a long period. However, we had to take a memo, seeking the Governor’s approval for the process. From the Governor’s office, we proceeded to the Economic Development Council, a sub-set of the State Executive Council  for its ratification and these steps took about four months.

We also took another four months to ensure we had gotten the right transaction and legal advisers to guarantee transparency, accountability and efficiency of the process. We also had to set up the Project Steering Committee which is chaired by the competent Idris Samaila Nyam, Commissioner for Business, Innovation and Technology. Weeks before Government announced the revocation of all shops, we sat down with them. The market has its leadership who we meet with constantly and they are even part of the sale of shops committee. I went to the radio station together with the chairman of the market union on Christmas day. I sat down with them the day before and explained what the Governor wanted and we went to the radio station the next day. Different members of our management team were also on radio throughout that week, before we made the announcement and issued the press release on January 1, when the revocation became official.

The people spreading misinformation are those middlemen and ‘super’ landlords who see the shops as investments and have over 200 shops each over time and are on a daily basis extorting the traders and don’t even remit part of it to Government as they should. These are politicians who were former Managing Directors of the Market Company, former Local Government Area Chairmen, former Commissioners mainly of the PDP stock. We will publish their names if they don’t desist in their quest to cause confusion.

Is Kaduna Market Development and Management Company going to build   a prototype market that will be replicated across  the state? Or will it design  markets for specific communities, needs and uses.

It is both. Prototype in the sense that all supporting facilities are ensured in all; facilities like adequate parking, fire service, new toilets, restaurants all clearly defined, not makeshift. It is not prototype in the sense that in certain areas where we want to develop special markets like grains markets, fresh produce market, fish market etc .Essentially, the market has to match the primary economic activity of people in that community. So we make decisions according to the needs of the community .This is done in consultation with their union. If we see a market with 1,000 people, we try to build at the very least, 2,000 shops; ideally 2,500, so we can have new traders, in addition to the initial occupants. But sometimes we have issues with space.

 

For instance, Kurmin Mashi market, which we have not started despite finalizing with the developer. The design has no provision for parking, and it is in the middle of residences. So we proposed a new location, we have been going back and forth. We look at the community first and not the developer.  So, if he builds a market like that, we have not solved the issue of traffic, we have compounded it. We have decided that we will speak to the community, assess some of the houses, pay these people off and then open up the place and secure more land to enable us build the market there.

 

Is it one contractor handling the construction of all the Kaduna Market projects? If so, why?

Actually, most of the buildings that you’re seeing are not even contracts. A majority of these markets are developed by the private sector. They are not built by us, but are being built with the approval of Kaduna Markets and according to our terms and conditions to ensure that the rights of the traders are protected. Approval in terms of ensuring they are in conformity with designs that align with our own thinking, the prototypes like you mentioned.

Can you list  some of the projects that your office is currently carrying out and the rationale behind it? By 2023, what should we expect from your office?

Okay. We currently have 18 projects in our pipeline and about 14 of them are projects conceived in the last 8 months. Some have started and are at different stages of completion while some are still being conceptualized. Some have gone beyond conceptualization and we are at the community relations stage because wherever we go, we sit with the union, the district head and community to explain why we are doing what we are doing. First, to ensure relocation of the current occupiers has been done, through provision of makeshift temporary structures, then we remove and reconstruct the main site. We do not demolish anything until we relocate. People did not believe it when we promised to do so because trust has been eroded between traders and the Government. But we do things differently in Governor El-Rufai’s administration. People in Sabon Gari will testify that we relocated them before we commenced the first phase. People in Dan Magaji, people in Kawo will say the same.

Projects that have started and reached an advanced stage are Kasuwan Magani market which we broke ground in June, construction started in September and we will deliver the project by May 29, 2020. We have the Galaxy Mall which we broke ground in August 2019, construction started in November 2019 and as we speak right now, we have concluded the foundation, which is the most difficult aspect, and are building up. We hope to deliver early next year, February. We have the Murtala Square project. It is not a market, it is a sporting, leisure and recreational centre in the middle of the city and it is undergoing a complete re-modelling. We are concluding the Yar’Adua Hall component by the end of February and we hope to launch it at KADINVEST 5.0. The entire square should be ready by September 2020. We are building two neighbourhood centres on Race Course road; we just started and we hope for it to be ready in the next six to eight months. It will have about one hundred shops put together.

We are working with developers and private sector partners to do the markets in Ungwan Rimi, Kawo, Kabala, Amaru in Zaria, Sabon Gari, Dan Magaji and the Kafanchan market. KMDMC is also building some neighbourhood centres in conjunction with private sector partners. Lastly, the construction of a 500 capacity parking lot at Sheikh Gumi Market will begin in earnest by March. This will significantly reduce congestion in the commercial section of the Ahamdu Bello Way: We are also commencing the construction of a trailer park and market close to the Olam site, situated in the Green Agro Allied Industrial Zone (GAAIZ). This will enable the trailers dropping and picking up goods at Olam to have a conducive place to park as opposed to parking recklessly on the highway.  

The deficit is a lot and Government alone cannot do everything, so  we are working with our partners, and they are doing their own part.  Our goal is to significantly upgrade and add to the number of shops, and lettable spaces in the entire state.  Once the supply outstrips the demand, we will see a reduction in price. We are building for almost everyone in society, from the poor to the rich. Some people just want a place to display their wares from morning till evening- usually open stalls and we will provide for them. We will not allow hawking of goods, we will not allow displaying of wares on our roads and we will continue to enforce that without fear or favour.