The collapse of industrial clusters in the North, East and South South regions of Nigeria has left the Lagos – Ogun cluster as the only major functioning axis for manufacturing and Foreign Direct Investments (FDI).
Lagos has developed as Nigeria’s biggest trading hub, with a concentration of major seaports, big banks, traders, and construction firms.
Ogun has seen over 70 percent of Nigeria’s manufacturing investments moving into the state between 2013 and 2016.
Apart from being proximate to Lagos, Ogun has lured deep-pocket investors with land rebate, lower taxes and infrastructure, leading to the growth of industrial clusters at Agbara, Igbesa, Abeokuta, Sango-Otta, Ibafo, Mowe, Ijebu-Ode and Sagamu industrial clusters in the state.
Abia State has also developed a shoe hub in Aba, but the biggest challenge is that the market is still informal and remains unattractive, for now, to deep-pocket investors. The industry value of over 50,000 shoe makers in Aba is still below N120 billion, according to BusinessDay calculations.
Cash-strapped Nigerian states must create economic and industrial hubs in their domains to attract investors and trigger all-round development across the country, say experts.
“The best that states can do now is to develop industries around raw materials they have. If you have an arid land for fresh tomatoes, create an enabling environment to develop and attract tomato processors. If you have comparative and competitive advantage in palm oil, build industries that process palm oil. If it is cheaper to get animal skins from your state, develop leather industry. Do not be jack of all trade and master of none,” said Muda Yusuf, director-general of Lagos Chamber of Commerce and Industry (LCCI) in an interview with BusinessDay.
“Lagos does not have that advantage in agriculture, which is why it partnered with Kebbi for the supply of rice,” said Yusuf.
In 2014, manufacturers invested N691.77 billion, out of which N514.87 billion went to Ogun State and N100 billion to Lagos, representing 89.42 percent of the total.
This means that 34 other states shared the remaining 10.58 percent of the investments, data from the Manufacturers Association of Nigeria (MAN), analysed by BusinessDay, show.
Experts want states to replicate these examples to enable development spread to all parts of the country, saying that it is possible to develop car parts production hub in Nnewi, Anambra State; leather/shoe hub in Kano/Kaduna; food and beverage manufacturing hub in Benue; palm oil hub in Cross River South-East states; textile hub in Kano/Kaduna/ Sokoto; cocoa and chocolate hub in Ogun, Ekiti, Ogun, Ondo, Osun, Cross and Edo states, given that these are low hanging fruits.
“We need to ensure that the states are integrated and goods can easily be moved. We need to have a good network of transportation of either rail of road. This will enable investors to settle down in Enugu and manufacture products and move them easily to Lagos,” Yusuf said.
Frank Jacobs, president of MAN, noted that to create such hubs, states must have good transportation networks and make investor friendly policies.
“Why people are moving to Lagos and Ogun? If you want investors to come, create the right environment, support industrial estates or clusters, have friendly policies and liaise with the Bank of Industry to make matching funds available,” Jacobs said.
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 12.6 percent. Hence Lagos and Ogun had a share of 83.83 percent while 34 other states shared 16.17 percent.
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 had about two percent while 34 states shared the remaining 0.3 percent.
Lagos and Ogun had a share of over 80 percent of N368.17 billion investments 2016, while the rest of Edo/Delta, Imo/Abia, Oyo/Ondo/Osun/Ekiti, Kano/Sharada/ Challawa, Kano Bompai, Anambra/Enugu, Bauchi/Benue/Plateau, Rivers, Kwara, and Abia, shared less than 20 percent.
“What we had after Independence has been lost. Cocoa trees in the west are aging and need to be replanted. What makes anyone think we can’t have chocolate plants in the West; coffee plants in Taraba and north-east; palm oil manufacturers in the east and herbal medicine plants in the northern states?” asked Ike Ibeabuchi, CEO of MD Services Limited, a manufacturing and services firm.
ODINAKA ANUDU
