Lagos has once again overtaken Ogun State, once touted as Nigeria’s industrial hub, in manufacturing investments. This is coming on the back of a new wave of poor doing business practices that have dogged Ogun in the last two years.
Lagos got 52 percent of total manufacturing investments in 2018 as against Ogun State’s 34 percent, data from the Manufacturers Association of Nigeria (MAN), a group with over 2,500 investors, show.
While Lagos, which includes Apapa and Ikeja industrial zones, got total investments valued at N287.16 billion out of the total N552.64 billion, Ogun got N186.47 billion.
In 2017, Ogun mustered only 28.59 percent of the total N329.94 billion invested that year, whereas Lagos got 50.11 percent.
But this was not so between 2014 and 2016, when 50 to 70 percent of investments in agro processing, heavy and light manufacturing went to Ogun, while Lagos attracted less than 20 percent of the total.
The elephants in the room are multiple taxes charged by Ogun State and poor state of roads left unattended to by the state government, which seems more interested in revenue collection than attracting more investors, manufacturers say.
“I will like to put on record that the only motorable road within the OPIC Estate was constructed by members of MAN within the estate,” Paul Gbededo, group managing director, Flour Mills of Nigeria plc, told Dapo Abiodun, governor-elect of Ogun State, on April 11.
Gbededo’s reference was to the dismal state of roads at Agbara, one of the major industrial clusters in Ogun, which also hosts Unilever, Pharma Deko, Beloxxi Industries and Nestlé Nigeria, among many others.
We gathered that the government in 2018 asked manufacturers operating within the zone to contribute 30 percent while the state contributes 70 percent for the rehabilitation of the roads.
Gbededo said reconstruction of Agbara/Atan road was critical, adding that though manufacturers were willing to collaborate with the government on the project, government needed to take the lead in ensuring its proper and timely completion.
At the meeting, Seleem Adegunwa, chairman of MAN, Ogun State chapter, explained to Governor-elect Abiodun that the activities of government agencies, particularly the Ministry of Environment, were sometimes inimical to investments.
Ogun State is currently Nigeria’s leading industrial hub, with virtually all the large enterprises in Lagos having a factory in the state. But the state is hard hit by insecurity, poor infrastructure and money-chasing regulatory agencies hampering investments. Recently, Procter&Gamble, located in Agbara, which was until July 2018 United States’ biggest non-oil investment in the country, packed up.
In 2018, manufacturers told us that they pay a large number of taxes in Ogun each month, including those demanded by the Federal Government.
They added that things were becoming more predictable in Lagos and less so in Ogun as many government agencies demanded the same fees and levies in Ogun.
“Ogun is gradually becoming less organised,” said Olusegun Osidipe, director of research and statistics at MAN.
“Many things are still handled manually in Ogun, but you can easily check who owns a piece of land on the system in Lagos. You know how much to pay on Land Use Charge in Lagos, but not so in Ogun,” Osidipe said in 2018.
In the first half (H1) and second half (H2) of 2018, Ogun got N95.31 billion (out of total N305.56 billion) and N91.16 billion (out of total N247.08 billion), respectively, while Ikeja got N54.8 billion in H1 of 2018 and N85.76 billion in H2 of 2018. Similarly, Apapa got N93.31 billion in H1 and N53.29 billion in H2 of 2018.
Compare these with previous data. In 2014, for instance, manufacturers invested N691.77 billion, out of which N514.87 billion went to Ogun State, representing 74.42 percent of the total.
Also, 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 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 3 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,
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.
Source: By Odinaka Audu