In its report for the first quarter of the year, the National Bureau of Statistics (NBS) recently listed Lagos, Akwa Ibom, Ogun, Oyo, Rivers states and the Federal Capital Territory, Abuja as the most investor-friendly destinations in the country in the first quarter of 2017.
According to the NBS, the five states and the FCT attracted a total of $908.268m capital importation in the first quarter of 2017, adding that Lagos got 95 per cent of the imported capital.
It noted that Lagos, which is home to the head offices of the Nigerian Stock Exchange, most of the commercial banks and telecoms companies, attracted $865.718m capital importation.
The report also showed that while Akwa Ibom, which is a major tourism hub of the country, attracted $18.361m capital importation, the FCT attracted $14.867m.
It listed Ogun as the next investment-friendly state with a capital importation of $5.351m in the first three months of the year, while Oyo and Rivers came next with $3.419m and $550,000 respectively.
According to the report, the largest chunk of the imported capital, $302.47m, representing 33.5 per cent, came in from the United Kingdom, while the second largest, $215.66m, came in from the United States of America.
The bureau noted that this year’s record showed a 27.75 per cent improvement over the country’s achievement last year.
Governor Ibikunle Amosun has not underestimated the enormity of the task of turning around the prosperity of Ogun State. Since he assumed power in 2011, he has prioritised the attraction of private capital to Ogun State to spur the ‘Mission to Rebuild’ agenda.
Ogun State had languished near the bottom of the World Bank Ease of Doing Business index in the 2010 report but was ranked as one of the five most-improved states in the country in 2014 report of the global financial institution.
It is no news that the dwindling federal allocations caused by the falling prices of crude oil at the international market have deeply affected finances of every state in the federation, Ogun State inclusive. But for the financial engineering put in place by Governor Amosun, governance at both the state and local government levels would have been grounded.
In April 2016, the Internally Generated Revenue (IGR) of all the states in Nigeria for 2015 was released by the NBS. From the statistics, there was a decrease in the total IGR of all the states together, comparing the IGR of 2014 and 2015. The IGR of 2014 was N707.8 billion while that of 2015 was N683.6 billion. For the year 2015, Ogun was one of the states with the highest IGR (49.42%).
Due to prudent husbandry of the scarce resources of the state and his less reliance on the monthly federal allocation, Amosun has not defaulted in the payment of salaries.
It is worth noting that the Treasury Single Account (TSA), which the Amosun administration introduced in 2011, has now got nation-wide acceptance and enabled the state to block leakages in the system.
To increase the revenue of the state, a Revenue Committee chaired by the Governor himself was constituted where issues on businesses and internally generated revenue are sorted out.
The establishment of One-Stop Shop domiciled in the state Ministry of Commerce and Industry as well as synergy that exists among all ministries, departments and agencies (MDAs) has removed the usual bottlenecks that impede investors’ access to lands, building approval, environmental impact analysis and these have enhanced the ease of doing business in Ogun State.
The usual bottlenecks which government removed from its relationship and partnership with private sector, coupled with massive investment in infrastructure such as roads, bridges, pipe-borne water, education, health and electricity is the magic behind the increased internally generated revenue.
The migration of investors and industries to the state has really helped to develop the economy of the state in terms of wealth creation, employment opportunities, tax remittance, and corporate social responsibilities, among others.
The government has harmonised its revenue sources and this has helped to block leakages in MDAs and avoid multiple taxation between state and Local Government.
There is also the introduction of new revenue lines to bolster revenue generation, such as Home Owners’ Charter, Land use Act and Okada Rider’s Permit.
Ogun State was adjudged one of the five states that made the best stride towards the national frontier of good practices as presented in the World Bank ranking, an initiative of IFC/GIZ, 2015
The state has continued to provide enabling environment, security, power and road network which made it to take over 70% of investment in Nigeria as confirmed by Manufacturer Association of Nigeria (MAN) report, 2015.
It has equally continued to reap maximum benefits from the enabling environment created for business growth by the Amosun administration. The state is now unarguably the most industrialised in Nigeria. In addition to these milestones, significant work was also done to support the Micro, Small and Medium size businesses. The government partnered with the Bank of Industry to provide much needed funding for MSME entities, restructured and upgraded several markets across key cities in the state.
According to the MAN, Ogun State Industrial Zone ranked first in 2014, while new investment into Ogun in 2014 was valued at N514.87 billion, an increase from 2013 investment of N376.57 billion and total Investment stood at N691.77 billion (74%) by the end of 2014.
More than 106 new factories have been commissioned since 2011. Additional 100 companies have made requests for land, while many others are at various stages of construction.
The MAN said the production value recorded by the Ogun Industrial Zone accounted for 69 percent of total production for all zones, thus re-confirming Ogun as the industrial hub of Nigeria.
According to findings, investors get rebates on land, good road network and better security of plants, machinery and assets in industrial zones in Ogun State. Certain types of taxes paid by these investors in some other states are also accepted by Ogun State, thus preventing them from paying multiple levies.
Ogun also has one-stop-shop platform, where investors are given access to understudy available natural and mineral deposits, as well as agricultural potential of the state. Many manufacturers also say there is less harassment from touts in Ogun State. Also, there is less traffic gridlock in Ogun and cheaper and more available accommodation for staff in the state.
In the last six years, more investments have moved to Agbara, Igbesa, Abeokuta, Sango-Otta, Ibafo, Mowe, Ijebu-Ode and Sagamu industrial clusters.
Out of the N180.12 billion invested in the whole manufacturing and agro-allied industries in Nigeria, in the first six months of 2015, N128.3 billion went to Ogun, representing 71.23 percent.
In 2014, investors pumped in N691.77 billion, out of which N514.87 billion went to Ogun. Hence, 74.42 percent of all investments in Nigeria were directed to Ogun State.
From 2011 till date, there have been different investments committed to the state’s economy in many sectors. From manufacturing to agro-allied industries, real estate, banking, oil and gas, telecommunications, services among others, the combined inflows into the state economy in the forms of capacity expansion, or greenfield investments run into about N1.5 trillion.
After commencing the process of creating a business friendly environment, Governor Amosun moved on to convene the first ever Investors Forum, where he rolled out his plans of making the Gateway State the number one destination for investors. Today three of such fora have been held and their impacts on the economy of the state are very manifest. From the first Investors Forum in 2012 till date, over a hundred multinational companies have made the Gateway State their home.
- Durojaiye is Special Adviser, Information & Strategy, to Governor Amosun
