Incentives push 88% of new investments to Ogun in 2015
Eighty-eight percent of new investments in the manufacturing sector went to Ogun State industrial zone in 2015.
Manufacturers told Real Sector Watch that the new investments went to the state on the back of attractive incentives such as rebate on land, tax cuts and holidays, among others.
Ogun is also tapping into its proximity to Lagos to lure investors. The state has less number of touts and congestion, while constantly reassuring manufacturers of the safety of their investments, market watchers say.
“We, manufacturers, are happy with Ogun because of some of the incentives provided by the state,” Frank Udemba Jacobs, president, MAN, told this writer recently.
Jacobs added that safety of investments was also another reason why manufacturers had confidence in the state.
According to Real Sector Watch’s calculations on the latest data from the Manufacturers Association of Nigeria (MAN), N430.55 billion worth of investments went to Ogun State out of the total N489.45 billion pumped into the state by manufacturers in 2015.
While N128.29 billion worth of investments went to Ogun in the first half of 2015, investments valued at N302.26 billion were directed to the state within the second half of the year.
Ogun is one of the industrial zones, which also include Edo/Delta, Imo/Abia, Oyo/Ondo, Osun,Ekiti, Apapa (Lagos) and Ikeja (also in Lagos). Others are Kano/Sharada/Challawa, Kaduna, Kano Bompai, Anambra/Enugu, Bauchi/Benue/Plateau, Rivers, Kwara/Kogi, and Abuja.
In the last three to four years, more investments have moved to Agbara, Igbesa, Abeokuta, Sango-Otta, Ibafo, Mowe, Ijebu-Ode and Sagamu industrial clusters, all in Ogun State.
Ogun has a one-stop-shop platform, where investors are given access to understudy available natural and mineral deposits, as well as agricultural productivity capacity.
Bimbo Ashiru, commissioner for commerce and industry in Ogun, said in 2015 that seventy manufacturing companies were established during first four years of Governor Ibikunle Amosun of Ogun State. Ashiru said both the existing and new companies were given some level of incentives and benefits that prompted rapid development in manufacturing sector.
In 2014, investors pumped in N691.77 billion, out of which N514.87 billion went to Ogun State, representing 74.42 percent of all the investments.
“Analysis of investment by industrial zones shows that very significant proportion of the manufacturing investment in the review period went to Ogun zone, while other zones witnessed slow investment with the exception of Imo/Abia zone,” says the 2015 MAN Economic Review obtained by Real Sector Watch.
Last year (2015) was a difficult year for investors who endured election and handover uncertainties as well as policy un-clarity and forex scarcity.
“The year 2015 was indeed a very difficult period for the manufacturing sector. The reality of acute shortage of FOREX and the erosion in the value of naira, coupled with the CBN policy that excluded 95 manufacturing essential raw materials from the market, significantly constrained manufacturing productivity in the period,” says MAN.
“In the review period, stock of manufacturing raw-materials significantly depleted as new importation could not be met and manufacturers were not able to meet their clients’ purchasing orders and therefore resorted to rationing of product supplies,” MAN adds.
ODINAKA ANUDU