Lagos traffic is killing its economy

Speed of economic cycles: the rate at which economically productive activities are started and completed plays a significant role in economic development and this is true regardless of whether the final products are material goods sold in stores or abstract products offered by the service industry.

Poor transport infrastructure affects everything from the efficient holding of meetings to the movement of inputs for production. Economic systems can be boosted by fluid movement between production points and sales channels and this impacts efficiency and costs. A good example is how the cost of moving goods from China to the Apapa Port is lower than the cost of moving the same cargo from the Apapa Port to another part of Lagos (let’s not talk about up-country). The resultant rise in prices as the cost of transportation is passed on to the final consumer slows down demand which eventually further hurts supply and complicates the economic cycles even further.

This phenomenon that makes a China-Apapa freight trip cheaper than an Apapa-Gbagada freight trip is also responsible for the high cost of other forms of transportation within and between the states. Intra-Nigerian trips that used to take six or nine hours became journeys that took 48 hours sometimes and the impact of this on the countrywide distribution of consumer goods and skilled manpower has increased turnaround times, the increased risk associated with movement of resources, and of course prices. But we are focusing on just Lagos today.

In Lagos state, the traffic control agencies which were ostensibly created to smooth the free flow of traffic have in essence become vehicles primarily for generating IGR

There was quite some reaction to the decision for the Super Eagles to travel for last Saturday’s Africa Cup of Nations qualifier in Port Novo, Benin, by boat. To be honest, travelling by boat was a good idea, but many have pointed out, correctly in my view, that the reason for the boat ride was because of the atrocious state of the road that links Lagos to Seme via Badagry.

In 2019, a client asked my employer, SBM Intelligence, to conduct a study on the cost of road transport in Lagos in terms of time. The results of that study were documented in this video:

As a part of that study, we benchmarked transit times in Lagos with some other cities that have similar population densities. Lagos had the highest travel times, and specifically, the Badagry route was really awful. A trip from Badagry to Ikeja at the time took an average of four hours and a half. In performing that study, we spoke to people in Badagry who do not see their kids during the week. One particular family did not have an option as both parents work on the Island, and because of the cost in both time and treasure, they had to squat with friends closer to the office. They could not afford domestic help, and they had no immediate family to bring in to babysit. Thus, their kids were each week left at the mercy of their neighbours. Think of the potential social problems that could lead to in years to come.

One of the subtler impacts of poor infrastructure is health-related as the stress associated with longer and more difficult journeys builds up for people already dealing with the negative economic effects of perpetual gridlock. Stress is rather ruinous if sustained and it is common to see people with daily six-hour commutes that are devastating to their health and family lives when stretched over a decade or two. The physical and mental wear and tear build-up and sometimes result in emergencies that put people in ambulances that ironically get stuck in traffic until the patient inside dies.

What makes it particularly difficult is that certain elements in the state have built rent-seeking arrangements around the inefficiency that comes from the poor infrastructure. In Lagos state, the traffic control agencies which were ostensibly created to smooth the free flow of traffic have in essence become vehicles primarily for generating IGR and, have in the process, created black markets where drivers are extorted daily for tens of millions of Naira. This means that ironically we might be faced with a situation where the government itself is motivated to keep traffic stuck at a certain level and are thus not motivated to improve transport infrastructure, because of what they make from the gridlock.

Back to Nigeria’s national team, and the real reason behind the Eagles going to Benin by water is the state of that road, there can really be no denying it. A good experiment would be to wait patiently for a year, and see how commonplace boat trips between Lagos and Cotonou become. That would be a genuine marker of whether there is a genuine effort to improve travel times between Lagos and Badagry.

Nwanze is a partner at SBM Intelligence