Egerton became Governor of Lagos Colony, covering most of the Yoruba lands in the southwest of what is now Nigeria, in 1903. The colonial office wanted to amalgamate the Lagos Colony with the protectorate of Southern Nigeria, and in August 1904 also appointed Egerton as High Commissioner for the Southern Nigeria Protectorate. He held both offices until 28 February 1906. On that date, the two territories were formally united and Egerton was appointed Governor of the new Colony and Protectorate of Southern Nigeria, holding office until 1912. In the new Southern Nigeria, the old Lagos Colony became the Western Province, and the former Southern Nigerian Protectorate was split into a Central Province with capital at Warri and an Eastern Province with capital at Calabar. When his predecessor in Southern Nigeria, Sir Ralph Denham Rayment Moor, resigned, a large part of the southeast of Nigeria was still outside British control. On taking office, Egerton began a policy of sending out annual pacification patrols, which generally obtained submission through the threat of force without being required to actually use force. When Egerton became Governor of Lagos he enthusiastically endorsed the extension of the Lagos – Ibadan railway onward to Oshogbo, and the project was approved in November 1904. Construction began in January 1905 and the line reached Oshogbo in April 1907. He favored rail over river transport, and pushed to have the railway further extended to Kano by way of Zaria. He also sponsored extensive road construction, building on the legislative foundation laid by his predecessor Moor which enabled use of unpaid local labor. Egerton shared Moor's views on the damage that was being done to the Cross River trade by the combination of indigenous middlemen and traders based in Calabar. The established traders at first got the Colonial Office to pass rules inhibiting competition from traders willing to set up bases further inland, but with some difficulty, Egerton persuaded the officials to reverse their ruling. Egerton was a strong advocate of colonial development. He believed in deficit financing at certain periods of a colony's growth, which was reflected in his budgets from 1906 to 1912. He had a constant struggle to obtain approval for these budgets from the colonial office. As early as 1908, Egerton supported the idea of "a properly organized Agricultural Department with an energetic and experienced head", and the Department of Agriculture came into being in 1910. Egerton