Cost Of Doing Business Cheaper In Ogun State

Cost Of Doing Business Cheaper In Ogun State

Thursday, August 14, 2014 5:16 pm

Wale Adegbite, chairman, Eagle Packaging and Vice-Chairman of Manufacturing Association of Nigeria, MAN, Ogun State branch, tells FUNSHO BALOGUN that industrial firms find the cost of doing business cheaper in the state
There has been this, lately, or rather since The last couple of years have witnessed an influx of industrial concerns into Ogun State. To what can we ascribe this development?



There are many attractions. I think the first is location. Location, location and location, as they say, in business. We all know that Lagos is the biggest market for any product in Nigeria. And Ogun State is extremely close, or rather, the closest to market. Being in Ogun State means you can capitalise on probably the biggest market in West Africa, which is Lagos.

Secondly, the cost of doing business is still relatively cheaper in Ogun State than in Lagos State. And when I say cheap, I mean, for example, the cost of land.

Because Ogun State is much bigger than Lagos State, by definition it means that land in Ogun State will be cheaper than land in Lagos State. Then of course there is the issue of the availability of the land as well. Ogun State has a lot more land than Lagos State. For those reasons, you would expect that people would be more attracted to Ogun State is they want to set up a factory.

Thirdly, the Ogun State government is very investor-friendly. Apart from being a chartered accountant, the governor has also surrounded himself with a lot of private sector people. And so there is a very experienced private sector banker as the commissioner for Commerce and Industry, whose mission is to basically industrialise the state. These people know what it takes and what the industries want. They are making sure that all these things are provided. They also engage a lot with the manufacturers in the state. There is a constant engagement, where they ask what the problems are and what can be done to solve them. When you add all these things together, it makes Ogun State very investor-friendly.

Maybe the last point I should also mention is that Ogun State is also sitting on a gas pipeline. Although Lagos State also has gas pipelines in many parts. Ogun has, for example, gas pipelines in Agbara and Ota, which are two big industrial areas. So if you don’t want to rely on diesel generators, you can rely on that.

Ogun State also has quite a lot of independent power suppliers as well. They produce power and sell to industries, because there are quite a lot of industrial clusters in Ogun State. That also means that if you want to set up a factory, and you are near one of those IIPs, then you don’t need to bring any generator. You can just start paying the IPP, even if you don’t want to connect yourself to the unbundled PHCN. These are the various alternatives to the power from the Ibadan Electricity Distribution Company, where this Ogun axis is attached to. These are the reasons why Ogun State is a very desirable place to set up industries.

How easy is it to access power through the IPP’s and can the available IPPs boast enough capacity to handle the energy needs of the industries?

I am aware of three functional IPPs in Ota, and there may be more. In terms of capacity, there are a lot of people and industries that want their product (the energy), so they themselves have been increasing their capacity to meet the demand.

Would you say there is an improvement in road infrastructure along with the growth of industries?
We need to give a lot of credit to the government of Ogun State which is investing massively in the road infrastructure in Ogun State. In Ota, the major roads are being rebuilt. The only thing that remains is the rehabilitation of the feeder roads or the small roads leading to the actual location of all the factories because not all factories are on the main road.

Has the government been able to address issues concerning taxation which manufacturers complained about in the recent past? And is Ogun State now a tax-friendly place for manufacturers to operate?

Corporation tax is determined nationally, so a concession cannot be given in a particular state because it is a national policy. Ditto for income tax as well, which is also determined nationally. The only areas now would be what we can call the various levies that each state tends to impose on companies or people that carry out economic activities in the various states. As manufacturers, we will always complain that we are faced with different government agencies, all trying to extort money from us. And I think the difference we have in Ogun State is that there is a state governor and a commissioner willing to listen to us. And when we complain to them, they usually try to do something about it.

It is believed that acquiring land in Ogun State for industrial purposes is quite cheaper than doing so in Lagos. Can we talk about the Ogun State advantage in terms of actual figures and the factors responsible for this?
It is definitely cheaper to get land here in Ogun State than in Lagos. It may be difficult to give figures because even when we refer to Lagos, it depends on the location in the state. Some are more prime than others, and the same thing applies in Ogun State as well. But it is definitely cheaper to acquire land for purposes of manufacturing in Ogun State.

Is there really a significant difference in electricity supply in recent times to the industrial areas in the state when compared with what obtained before?

There are so many things that affect electricity in different areas. It is not so much the generating capacity, but also the distribution. For instance, if there is a problem with a transformer in an area, then you don’t have light. It is not that there is no electricity, it is just that it cannot be distributed because of the state of the transformer. What I must say is that the distributing company has become more responsive when you have issues with your transformer. They now lend to respond a little bit faster in trying to fix the problem. Courtesy of the faster response, we then tend to have more light than before.

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