Dapo Abiodun, Ogun State governor-elect, faces a daunting task of retaining aggrieved investors and attracting new ones to Ogun State industrial clusters when he is finally sworn in.
Ogun has beaten Lagos as a favourable investment destination in the last six to eight years, but this is gradually changing as major issues that scared investors from Lagos are now happening in Ogun.
The state has several industrial clusters such as Agbara/ Igbesa, Otta, Ibafo, Mowe, Abeokuta, Ikebu-Ode, and Sango-Otta, among others.
However, many manufacturers in these clusters are unhappy with the poor level of infrastructure there. A case in hand is the Agbara/Igbesa axis.
During rainy season, trucks ferrying raw materials and products are stuck in mud in this cluster as the state government, which takes the large chunk of taxes, refuses to rehabilitate the dilapidated link roads.
Manufacturers have complained severally to the state government, but the complaints have always fallen on deaf ears.
Obi Ezeude, CEO of Beloxxi Industries, whose biscuit factory is located in Agbara, complained on February 8, 2018, during a factory commissioning, that poor state of roads in Agbara was hurting manufacturers as vehicles often got stuck.
Similarly, at the 9th quarterly interactive Session with Ogun State government in Abeokuta in March 2017, Wale Adegbite, chairman, Manufacturers Association of Nigeria (MAN), Ogun State Chapter, had noted that apart from poor state of roads which were causing economic and man-hour losses, multiple taxation were also rife in the state.
Ogun State had come up with a 70/30 formula, whereby investors put down 30 percent while the state catered for the rest 70 percent for road construction, but manufacturers say this makes little sense.
“This does not make any sense,” said an executive director of a manufacturing company based in Agbara, when the idea was mooted in 2018.
“You collect taxes and other levies from us, yet you refuse to do the little things for which the money is meant for,” he added.
Manufacturers in the state also say that things ( like land titles) are becoming more predictable in Lagos and less so in Ogun as many government agencies are now asking for similar fees and levies in Ogun.
They say Ogun, which, in the past, benefitted from proximity to Lagos and poor doing business in Nigeria’s economic capital, must begin to do more in order not to lose existing investors and discourage incoming ones.
Between 2014 and 2016, more than 70 percent of investments in agro processing, heavy and light manufacturing went to Ogun, while Lagos, which is mainly made up of Ikeja and Apapa industrial zones, often attracted less than 20 percent of the total, according to data from MAN.
But the trend changed in 2017 as data showed that the state posted only 28.59 percent of all the investments last year, whereas Lagos got 50.11 percent of total investments that year.
The MAN data showed that out of N329.94 billion invested by manufacturers in the first half of 2017, 32.9 percent (N108.87 billion) went to Apapa zone. Ogun zone attracted 28.4 percent (N93.76 billion), while Ikeja got N67.27 billion (20.4 percent of total investment).
In the second half, manufacturers made investment estimated at N176.69 billion. While 28.9 percent or N51.11 billion worth of investments went to Ogun zone, 24 percent or N42.46 billion was channelled to Ikeja, while 20 percent or N35.33 billion went to Apapa zone.
In the first and second half, Ogun got N144.87 billion out of the total N506.63 billion, representing 28.59 percent. However, Apapa got N144.2 billion (28.46 percent, while Ikeja got N109.73 billion (21.65 percent). This means that Ikeja and Apapa got N253.93 billion, representing 50.11 percent. But before 2017, Ogun alone often dwarfed both Apapa and Ikeja put together.
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 .
Apapa and Ikeja in Lagos contributed N15 billion and N85 billion to the investments respectively, representing a combined 15 percent of the total.
Similarly, manufacturing investments worth N309.33 billion were made in the second half 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.
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.
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 showed that N313.62 billion worth of investments were directed to Ogun out of the total N448.94 billion. This represented 70 percent of the total. Like in the first half, Apapa and Ikeja industrial zones scrambled for the remaining 30 percent investments with other zones. MAN is the largest manufacturing association in West Africa with over 2,000 companies as members.
“It is true that the current government attracted a lot of us here, but the incoming government should learn from its mistakes,” an investor in Otta industrial cluster said.
ODINAKA ANUDU
