Lagos Real Sector Investments Moving To Ogun State

A three-year data dealing with the direction of manufacturing and agro processing investments show that Ogun is elbowing Lagos in new investments.

[b]Data by the Manufacturers Association of Nigeria (MAN), analysed by BusinessDay, show Ogun State has over 70 percent share of manufacturing investments in the country between 2014 and 2016.

In 2014, manufacturers invested N691.77 billion, out of which N514.87 billion went to Ogun State, representing 74.42 percent of the total .

Apapa and Ikeja in Lagos contributed N15 billion and N85 billion to the investments respectively, representing a combined 15 percent of the total.

Out of the N180.12 billion invested in the manufacturing and agro-allied industries in Nigeria in the first six months of 2015, N128.3 billion went to Ogun, representing 71.23 percent. Ikeja and Apapa industrial zones got N15.74 billion and N6.98 billion, representing 8.7 percent and 3.9 percent share of the total respectively.

Similarly, manufacturing investments worth N309.33 billion were made in H2 of 2015, out of which N302.26 billion went to Ogun, representing 97.7 percent of the total. Apapa and Ikeja shared the remaining less than three percent with other industrial zones across the country.

In the first half of 2016, total investments estimated at N54.55 billion were made by manufacturers in the country, out of which N37.51 billion moved to Ogun within the period. This means that 69 percent of all investments within H1 of 2016 were channelled to Ogun State. Apapa and Ikeja shared the remaining 31 percent with other industrial zones such as Edo/Delta, Imo/Abia, Oyo/Ondo/Osun/Ekiti, Kano/Sharada/ Challawa, Kano Bompai, Anambra/Enugu, Bauchi/Benue/Plateau, Rivers, Kwara, and Abia.

In the second half of 2016, MAN survey shows that N313.62 billion worth of investments were directed to Ogun out of the total N448.94 billion. This represents 70 percent of the total. Like in the first half, Apapa and Ikeja industrial zones stampeded for the remaining 30 percent investments with other zones[/b].

MAN is the largest manufacturing association in West Africa with over 2,000 companies as members.

Frank Udemba Jacobs, president of MAN, told Real Sector Watch that manufacturers find Ogun as a good investment destination due to the government’s commitment to industrialisation.

“Manufacturers are happy with Ogun because they get incentives from the government,” said Jacobs.

Manufacturers say they get tax and land rebates in Ogun, which lowers production cost in the long run. It is also easier and seamless to get certificate of occupancy (C of O) in Ogun, a manufacturer in the food and beverage industry told BusinessDay.

There is also a one-stop shop that allows investors to have a single point of contact for their dealings with the various ministries, departments and agencies of the state.

The cost of doing business in the state is also less when compared with Lagos.

“There is less harassment from touts in Ogun and the traffic is light, while there is more available accommodation for staff in the state,” another investor told BusinessDay.

Jon Tudy Kachikwu, chairman of the SME Group of the Lagos Chamber of Commerce and Industry (LCCI), said it takes about 30 days for agro processors and SMEs to get C of Os in Ogun.

“You know businesses are many in Lagos, so there might be some ‘I don’t care attitude’ from some government agencies. Again , people prefer Ogun because of multiple taxation and cost of the environment in Lagos,” Kachikwu, an agro processor and exporter, said.

In the three-year review, more investments moved to Agbara, Igbesa, Abeokuta cheesy , Sango-Otta, Ibafo, Mowe, Ijebu-Ode and Sagamu industrial clusters, all in Ogun State.

In 2014 alone, new investors such as Shongai Technologies Limited, Ijako in Sango-Otta, Apples and Pears Limited, Ceplas Farms Limited, Greenlife Bliss Healthcare Limited, and Sumo Steel Limited, berthed Ogun.

In the last three to four years, manufacturers have either moved from Lagos to Ogun or relocated their factories to the state, leaving only administrative offices in Lagos. Some of the companies that have done that include Fidson Healthcare, May & Baker, Pure Chemicals, Eagle Packaging, Nycil Limited, and Dufil, among others.

“Seventy manufacturing companies were established during first four-year tenure of Governor Ibikunle Amosun of Ogun State and both existing and new companies were given some level of incentives and benefits that prompted rapid development in manufacturing sector,” said Bimbo Ashiru, commissioner for commerce and industry, said in 2014.

Analysts say Ogun is benefitting from proximity to Lagos. A research done by The Economist in 2015 showed that an average company in Lagos 956 hours per year in paying taxes. However, things are changing in 2017 as the recent Doing Business Index by the World Bank shows some positive changes in doing business in Lagos.

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