Investors ditch Lagos as Ogun offers more incentives

New investors, particularly manufacturers and agro-allied industries, are abandoning Lagos for Ogun State, as the latter offers better incentives and fewer hurdles for businesses, BusinessDay has found.

“The production value recorded by the Ogun Industrial Zone accounted for 69 percent of total production for all zones, thus re-confirming Ogun as the industrial hub of the nation,” said the Manufacturers Association of Nigeria (MAN) in its latest economic review (2015).

According to findings, investors get rebates on land, good road network and better security of plants, machinery and assets in industrial zones in Ogun State. Certain types of taxes paid by these investors in Lagos are also accepted by Ogun State, thus preventing them from paying multiple levies in two states.

Ogun also has a one-stop-shop platform, where investors are given access to understudy available natural and mineral deposits, as well as agricultural potential of the state. Many manufacturers also say there is less harassment from touts in Ogun. Also, there is less traffic gridlock in Ogun and cheaper and more available accommodation for staff in the state.

In the last two to three years, more investments have moved to Agbara, Igbesa, Abeokuta, Sango-Otta, Ibafo, Mowe, Ijebu-Ode and Sagamu industrial clusters, all in Ogun State, at the expense of Ikeja and Apapa zones in Lagos which used to be the hubs of investors.

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

The new investments contributed only 12.61 percent, data from the Manufacturers Association of Nigeria (MAN) show. The rest was shared by Edo/Delta, Imo/Abia, Oyo/Ondo/Osun/Ekiti,  Kano/Sharada/ Challawa, Kano Bompai, Anambra/Enugu,  Bauchi/Benue/Plateau, Rivers, Kwara, and Abia clusters.

In 2014, investors pumped in N691.77 billion, out of which N514.87 billion went to Ogun State. Hence 74.42 percent of all the investments were directed to Ogun state. Apapa and Ikeja in Lagos contributed N15 billion and N85 billion in investments, which represent 15 percent of the total within the period under review. The situation was not too different in 2013.

In terms of output, Ogun turned out N265.27 billion in output in half year 2015 as against Lagos’ N88.6 billion. Similarly, Ogun produced goods worth N306.58 billion in the whole of 2014, while Lagos churned out output worth N274.41 billion within the period.

Some of the new investors which berthed Ogun in 2014 were Shongai Technologies Limited, Ijako in Sango-Otta, Apples and Pears Limited, Ceplas Farms Limited, Greenlife Bliss Healthcare Limited, Sumo Steel Limited, 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, at the annual general meeting of manufacturers held recently in Ogun.

The Ogun State chapter of the MAN said it admitted 31 new manufacturing companies from different production sectors of economy, including agro-allied, foods and beverages, chemicals and pharmaceuticals, iron and steels, non-metallic and mineral products, wood and furniture, pulp, paper and packaging, in 2014.

Under Akinwumi Ambode, Lagos is trying to return to its lost glory, as the governor has an Overseas Office that caters for investors’ welfare.

Apart from the cost of rent, investors who spoke to BusinessDay complained that they were often harassed by touts who would come to collect all manner of bogus ‘taxes’ and levies.

“In one month, 21 of such people came, but we had to use wisdom to avoid many of them,” said a chief executive officer of a foods and beverage firm in Lagos, who spoke on the condition of anonymity.

ODINAKA ANUDU