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Ogun, Ikeja top manufacturers’ investment destinations in 2014

Cost of funds highest in Edo/Delta industrial zone

Ogun State and Ikeja Industrial Zone recorded largest investments from manufacturers in the first half of 2014, data from the Manufacturers Association of Nigeria (MAN) have shown.

While Ogun, which is now Nigeria’s industrial hub, recorded N377 billion worth of investments within the period, Ikeja returned investments worth N39.86 billion.

Ogun State’s represents 78 percent of N483 billion worth of investments made in the whole of the manufacturing sector within the period under review, while Ikeja shares 8.3 percent.

“This has revealed that the majority of manufacturing investments were directed towards Ogun industrial axis, which consists of Otta, Agbara, Ibafo/Mowe and Shagamu industrial areas,” said MAN, in its latest January to July 2014 economic review.

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The data further show investments in Kano/Sharada/Challawa as N19.75 billion and those of Oyo/Ondo/Osun/Ekiti as N19.2 billion within the period under review.

This was followed by Kano Bompai, where N9.4 billion investments were made and Anambra/Enugu that had N5.5 billion worth of investments.

Total investments in Bauchi/Benue/Plateau were put at N4.12 billion, while those of Edo/Delta were worth N4.54 billion.

Furthermore, the data show Apapa in Lagos recorded N3.34 billion worth of investments within the period under review. Analysts have attributed this not-too-impressive investment estimate of Apapa to tough business environment in that part of Lagos. The area is notorious for port gridlocks and long hours of traffic jams caused by tanker drivers who lift premium motor spirit (PMS) from the area.

“Getting to the ports has become an unprecedented nightmare; moving out of the ports is even a greater nightmare. The entire system has become totally dysfunctional and delivery of empty containers and the evacuation of cargo have become a terrifying experience,” said Remi Bello, president, Lagos Chamber of Commerce and Industry, in his July 2014 note.

Raw materials are often stuck at the ports for weeks, while export products are usually delayed owing to transport gridlocks, the manufacturers say.

But investments in Kaduna were worth N371.2 million, while those of Imo/Abia were estimated at N309 million. Rivers State industrial zone reported the least investment record of N72.3 million, the data also show.

Manufacturers say many more investments can come to the sector if the business environment improves. Notable among issues that clog manufacturers’ investments are electricity supply hitches and high cost of funds.

“The unstable supply of electricity, coupled with high cost of funds, has limited the potentials of the manufacturing sector at the mid-year,” MAN further said.

“However, these challenges have not prevented manufacturers from investing in the economy. The level of investment as shown across the sectors and zones indicates the confidence Nigerian manufacturers have on the economy,” MAN said.

On the cost of funds, MAN suggested a development finance institution that will take care of the real sector credit demand, saying “this is necessary in view of the constraints that have been associated with the Bank of Industry’s capability to resove this critical issue in the productive sector of the economy.”