Lagos and Ogun as investment hubs
In Nigeria, Lagos State has peculiar attributes that have enabled it to transcend its status as one of the 35 other geographical expressions in the country known and addressed as states. It is a city state with a larger than life size image which has, unwittingly, qualified it as a mega city.
A sprawling city that is almost bursting at its seams with a large and growing population estimated at 20 million, Lagos by this sheer number has very big market opportunities, making it an investment hub and the largest commercial city in Sub-Saharan Africa.
Ogun State, Lagos’ closest neighbour, is benefitting immensely from this proximity and it is such that the state is fast developing and also growing exponentially as an investment hub.
A close look at the two ‘cities’ shows that, though Lagos remains a destination for some classes of investors, Ogun, now identified as a greenfield, is a preferred destination for new investors, especially those in manufacturing and real estate which require large space.
Government authorities in Ogun would readily tell whoever cares to listen that they are not in any way in competition with Lagos but, from all indications, the state is in a very subtle way ‘stealing the show’ from Lagos as it has come up with some incentives that has made it irresistible to investors.
The state has identified land as an important part of production process that every investor needs to make investment happen and has therefore come up with highly favourable land administration which, in the last two to three years, has attracted investment in estate development, agro-allied industries, foods and beverages, chemicals and pharmaceuticals, iron and steels, non-metallic and mineral products, wood and furniture, pulp, paper and packaging.
In Ogun, investors get rebates on land, good road network and better security of plants, machinery and assets in industrial zones while certain types of taxes paid by these investors in Lagos are also accepted by the state, thus preventing them from paying multiple levies in two states. For real estate developers, obtaining building permit, property registration and title documentation do not take forever while they don’t have to break the bank till to pay for all of these
It is pertinent to note that these incentives and favourable business environment are paying off. Available record shows that 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 while the Ikeja and Apapa industrial zones got N15.74 billion and N6.98 billion respectively.
It is interesting to note too that, in 2014, investors pumped in N691.77 billion into the economy out of which N514.87 billion went to Ogun, hence 74.42 percent of all the investments were directed to the state. Apapa and Ikeja in Lagos contributed N15 billion and N85 billion in investments, representing 15 percent of the total within the same period.
In terms of output, Ogun turned out N265.27 billion in half year 2015 as against Lagos’ N88.6 billion. Similarly, the state produced goods worth N306.58 billion in the whole of 2014, while Lagos churned out goods worth N274.41 billion within the same period. All these are the kind of developments we canvass in the states now when the luxury of monthly allocation from Abuja is fast fading out and even where it comes, it is hardly enough to take care of civil servants wage bill, leading to social unrest.
We recognize and really appreciate efforts by the Lagos State government to attract more investments to the state, but it needs to do much more, especially in the area of infrastructure.
The Babatunde Fashola administration in the state did a lot to improve on both infrastructure and environment, but came up with land and tax policies too stringent to encourage investment. The situation in the state is further compounded by the uncontrolled activities of touts who have formed a parallel government and go about collecting all manner of levies from businesses.
We acknowledge the good strides of the new government in the state in opening up the state through roads infrastructure upgrade, but advise that more needs to be done on its land administration and tax policies to make them more investor-friendly than they are at the moment.