When the Financial Times interviewed me last year for its special report on Nigeria entitled “Investing in Nigeria”, it specifically wanted to know my views about the situation in Lagos State. “Has Lagos stopped working?”, David Pilling, the newspaper’s Africa Editor, asked me.
The question implied, of course, that Lagos used to work. In truth, it once worked. But that was ages ago – a distant memory! Yet, some Nigerians still remember the 1950s, 1960s and early 1970s when traffic worked in Lagos, when night life was without hazzles and when many basic amenities were available and worked well. For many, in those days, Lagos was, as one writer recently said about old memories of California, a “litany of platonic ideals of human happiness”, with the prevalence of opportunities, entertainment and prosperity.
But let’s put those blissful years in context, an important context, in fact: demography. In 1960, Lagos had just 200,000 people, the population reached 1.4m in 1970, but today, in 2020, it is 22 million. One study says that the population might be 30 million by 2040. More scarily, according to Global Cities Institute, Lagos would have a population of 88 million by 2100, making it the world’s most populous city. But before we worry about 2040, let alone 2100, we have the immediate problems of today, when Lagos’s population of 22 million has turned it upside down. The stark truth is that Lagos that once worked is no longer working!
From the litany of platonic ideals of human happiness, we now have a dystopian reality, a litany of human woes: endless blackouts, lack of decent houses for the vast majority, crippling traffic jams, terrible roads, shocking sewage and waste conditions, not to mention insecurity, joblessness and a multitude of other joy-sapping problems associated with Lagos life. Lagos is, indeed, an oxymoron. Here is a state with a GDP of $136 billion, the 7th largest economy in Africa, and a nominal average income per capita of $5000, which is twice the Nigerian average. Yet, two out of three people in Lagos State live in slums, according to the World Bank. What’s more, as a recent analysis by the Deutsche Bank showed, Lagos had the lowest quality of life among all the cities in the world in 2019.
But why is Lagos not working? Clearly, the overarching problem is inadequate infrastructure to mitigate the exponential population growth. A state with a population of 22 million can’t have infrastructures that can barely serve 10 million people. Of course, given that every public governance problem is a failure of policies and institutions, it is clear that the problems of Lagos State are entirely man-made: it’s a failure of governance. Put simply, both the federal government and the Lagos State government have failed the state.
Take the federal government. It should long have granted Lagos a special status, with a dedicated federal grant. Lagos State is the commercial nerve centre of Nigeria; its GDP is 25% of Nigeria’s; it is the highest source of non-oil revenue for the federal government. I told the Financial Times that “Lagos should keep more of its relatively healthy tax base” and that “Like the oil-producing states, Lagos needs a bigger slice of the federal budget”. The six oil-producing states get a 13% derivation revenue from the Federation Account in recognition that the oil revenues are “derived” from these states. But Lagos, which accounts for much of the corporate, VAT and trade taxes that accrue to the federal government is left alone to struggle under a heavy burden of infrastructure crisis. It is short-sighted to have ignored the economic value of Lagos to Nigeria, its role as the country’s commercial hub.
But there is also the political value. Lagos is Nigeria’s melting pot, attracting people from all over Nigeria who are looking for opportunities, settlement and a better life. To most ordinary Nigerians, living in Lagos is the closest thing to living overseas! But as people move from all over Nigeria to Lagos, that puts enormous pressure on the state’s inadequate infrastructures. It behoves the federal government to recognise the burden that Lagos carries on behalf of the country and grant it a special status and federal support. Sadly, in 2016, for the second time in three years, the Senate rejected a bill to grant Lagos a special status. Partisan and ethnic politics were put above national and social cohesion.
However, let’s be clear, federal neglect is not the only cause of the infrastructure crisis in Lagos State. I also told the Financial Times that Lagos’s infrastructural problems “can’t be tackled without significant federal government and private-sector interventions”. Surely, as I have argued above, ahead of restructuring Nigeria, an imperative, the federal government should grant Lagos State a special status and give it a form of “derivation revenue” to support the state’s infrastructural development. But the second form of intervention is also important, even more important: private sector investment. However, this is something that must be incentivised by the state government through good governance.
Yet, despite all the hype, Lagos State has not been transparently and effectively run. As a result, first, it is not attracting as much internally-generated revenue, IGR, as it could. For instance, according to an analysis, only 600,000 of those liable to pay tax do so and, as a recent BusinessDay investigation revealed, much of the revenue collected actually “goes into private pockets”. Second, the state is not attracting sufficient private capital and investment to fund infrastructure projects.
Indeed, since Lateef Jakande, the state’s first civilian governor, launched the potentially transformational Metro Line project in 1983, which was torpedoed by the military regime of now President Buhari, no serious initiative has emerged to tackle the state’s traffic, housing and other infrastructural problems or to attract significant foreign investment.
To be sure, political wrangling and policy inconsistency have been a bane of governance in Lagos State. For instance, in 2016, the government of Akinwunmi Ambode launched the Office of Overseas Affairs and Investment, also known as “Lagos Global” to make Lagos “the most desirable investment destination in the world”. But what became of the idea, what outcome did it achieve? Now, Ambode’s successor, Babajide Sanwo-Olu, is talking about T.H.E.M.E.S, an elaborate programme covering traffic management and transport; health and environment; education and technology; entertainment and tourism; as well as security and governance. But he knows, or should know, that his ambition to “make Lagos a 21st century economy” is just a pipe-dream without significant private capital and investment.
Yet, Lagos has a serious problem with governance. Its politics is closed; its governance is not transparent. Lagos is a one-party state that has the semblance of medieval feudalism. Everyone knows that the state governor, whoever he may be, is not his own man. He must answer to a godfather or a politburo. As the fate of Ambode, who was denied a second term, shows, a governor will fail utterly if he falls foul of the godfather, former governor Bola Tinubu, the party politburo or, even, the state bureaucracy, an extension of the party structure – virtually every Lagos State Civil servant is a card-carrying member of the ruling party, All Progressives Congress, APC! It is hard to see how an attractive destination for quality investment and international business such a state can be!
So, Lagos’s problems are made-made. The federal government neglects the state, and the APC runs it like a fiefdom. Yet to succeed, Lagos needs a special status and federal support; it must also be run well to attract significant local and foreign investors’ interest in its infrastructural development.
Olu Fasan
