Ease of doing business: More companies relocate to Ogun – Rising cost of production occasioned by unfavourable business climate in Lagos State is forcing more manufacturers to relocate to neighbouring Ogun State; investigation by The Nation has shown.
Most manufacturers who spoke with our correspondent confirmed that on a yearly basis many of them are forced to move out of Lagos due to high cost of doing business in the nation’s former federal capital.
They identified some of the challenges that have made Lagos business environment harsh for them to include multiple taxation, dearth of infrastructure, ranging from bad roads to poor electricity supply, coupled with the activities of touts, popularly known as the area boys.
Frank Udemba Jacobs, President of the Manufacturers Association of Nigeria, MAN, who confirmed the development, told our correspondent that manufacturers now found Ogun State as a good investment destination due to the state government’s commitment to industrialise through encouraging manufacturing activities in the state.
Jacobs disclosed that manufacturers have discovered Ogun Sate as the next investment destination because of the numerous incentives they get from the state government in the course of doing their businesses over there. Such incentives, he stated include, tax and land rebates which he says, lower production cost in the long run.
A manufacturer in the food and beverage sub-sector of MAN who confided in our correspondent disclosed that it is easier and seamless to get certificate of occupancy (C of O) in Ogun compared to Lagos.
Statistics from MAN agrees. A three-year data dealing with the direction of manufacturing and agro-processing investments show that Ogun is indeed topping Lagos in new investments.
The data indicates that Ogun State has over 70 percent share of manufacturing investments in Nigeria between 2014 and 2016.
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.
The contribution of manufacturers in Apapa and Ikeja in Lagos at the period under review was N15 billion and N85 billion respectively, representing a combined 15 percent of the total.
Out of the N180.12 billion invested in the manufacturing and agro-allied industries in Nigeria in the first half of 2015, N128.3 billion went to Ogun, representing 71.23 percent, while N15.74 billion and N6.98 billion, representing 8.7 percent and 3.9 percent share of the total investment went to Ikeja and Apapa industrial zones respectively.
Likewise, manufacturing investments worth N309.33 billion were made in H2 of 2015, out of which N302.26 billion went to Ogun, depicting 97.7 percent of the total, Apapa, Ikeja and other industrial zones across the country got the share of the remaining less than three percent with.
Also, in the H1 of 2016, the total investment made by manufacturers in the country stood at N54.55 billion, out of which N37.51 billion moved to Ogun State at the same period, which implies that 69 percent of the overall investment in the H1 of 2016 was.
Moreover, in the H2 of 2016, MAN survey reveals 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.
The Nation recalls that the chairman of the SME Group of the Lagos Chamber of Commerce and Industry (LCCI), John Tudy Kachikwu, said it takes about 30 days for agro processors and SMEs to get C of Os in Ogun.
In the three-year review, more investments moved to Agbara, Igbesa, Abeokuta, Sango-Otta, Ibafo, Mowe, Ijebu-Ode and Sagamu industrial clusters, all in Ogun State.
Statistics shows that in 2014 alone, new investors such as Shongai Technologies Limited, Ijako in Sango-Otta, Apples and Pears Limited, Ceplas Farms Limited, Greenlife Bliss Healthcare Limited, and Sumo Steel Limited, berthed Ogun.
The Nation also recalls that the Commissioner for Commerce and Industry, Ogun State, Otunba Bimbo Ashiru said in 2014 that 70 manufacturing companies were established during first four-year tenure of Governor Ibikunle Amosun of Ogun State, adding that both existing and new companies were given some level of incentives and benefits that prompted rapid development in manufacturing sector.
“There are over 100 companies in the state, but we have been able to commission 79 till date. When we came in, Ogun State was rated number 35 in terms of the place for doing business in Nigeria. What we did was not only to create a friendly environment; we also put all necessary infrastructure on ground for easy take off of any business and sustain them. We then went to the World Bank to convince them that we had improved in so many ways through creating enabling environment for business to thrive. We have also introduced a one-stop-shop, whereby investors now know who to talk to and where to go. “The last time we commissioned one of these companies, Fidson Healthcare Plc., they informed us they had employed over 500 individuals from Ogun State and another one said they had employed 10,000,” stressed Ashiru.