Wooing Chinese Investors For Greater Lagos

With an estimated 22 million people, Lagos obviously stands out as the most populous city, not only in Nigeria but also on the African continent.

With the huge population comes the challenges of provision of infrastructure, traffic and waste management, transportation, employment, security, among other urban-related issues that continue to put immense pressure on governance.

Across the world, governments are seeking collaborations with investors to meet the growing needs of the people.

Governor Babajide Sanwo-Olu is no stranger to such developments. Since assumption of office six months ago, Sanwo-Olu has made relentless efforts to attract local and foreign investors in the quest to address the challenges associated with the burgeoning population of the megacity state. His election seemed to have boosted global confidence in the capacity of Lagos to realise its potentials as one of Africa’s leading economies.

Into the elections that heralded him into office, he preached T.H.E.M.E.S, an acronym for his government’s programme. T.H.E.M.E.S, which stands for Traffic Management & Transportation, Health & Environment, Education & Technology, Making Lagos a 21st Century Economy, Entertainment & Tourism as well as Security & Governance, is a dashboard created for driving and measuring the Greater Lagos Agenda of his administration.

Beyond being a development framework for the government, it is also an accountability guide for the public. With T.H.E.M.E.S Sanwo-Olu has signalled the capacity to keep global attention on Lagos State quite positive, hence the trip to China where he displayed the audacity for his agenda.

Read Also: $629m Lekki Port deal signals robust investor confidence in Lagos – LCCI

The quest to turn Lagos into a 21st-century economy is one of the critical elements of Sanwo-Olu’s agenda. He also knows that a functional city supports business growth. With this awareness, the governor is reaching out to more developed economies and societies for models and supports for building Lagos.

While in China, Sanwo-Olu reached out to his counterpart, Ma Xingrui, the governor of China’s Guangzhou Province on a Twin City Agreement between Lagos and Guangzhou Province.

What Lagos is to Nigeria, Guangzhou is to China. Therefore, there is a strong fit in the collaboration between the two cities. With 44.2 million people in its metro area, Guangzhou is the biggest city in China and has remained an important port in southern China for centuries.

Sanwo-Olu’s choice of Guangzhou for a twin-city partnership with the province which is acknowledged as the commercial centre of China could be as a result of his admiration of its Beta+ Global Global City ranking, and perhaps because the intensity of Ma Xingrui’s headache doubles his, judging by the size of Lagos population, estimated at 22 million people.

The partnership agreement between Lagos and Guangzhou is a deliberate step for Sanwo-Olu. He stretched his hands across the Atlantic to understand why some cities routinely attract the best companies, the top talent, and the most investment dollars.

Although his experience may have revealed that presence of the right mix of factors such as business activities, human capital, information exchange, political engagement, and positive experiences that help organisations and people to thrive makes one city more attractive than the other.

From the Guangzhou Traffic Management Centre, managing the entire vehicular traffic and emergency management services are just a click of buttons. The orderliness on the roads of Guangzhou, a city with a major terminus on the silk road, perfectly matches the picture of Sanwo-Olu’s ideal Lagos.

The tour, after a demonstration of responsiveness to distress calls by emergency agencies, triggered an action that will make Lagos smarter. With about seven million people in five million vehicles and 200 commercial buses on Lagos roads daily, the governor must have reasoned that things must be handled differently to bring orderliness to Africa’s most populous city.

At the discussion about transforming Lagos into a smart city and collaboration with leading technology giants, Huawei and Ehang, as well as some reputable urban development organisations, including Zhuhai Holding Investment Group, the socio-economic importance of Lagos to the world, and Africa in particular, was the central point.

“We are at the stage of building critical infrastructure that will make our city more habitable. We want technology to drive economic innovation, public security, health management, waste management, traffic management, government processes and services to the public,” said Sanwo-Olu while assuring the companies of the readiness of Lagos State to take its rightful place in the comity of megacities by transforming into a smart city.

Even though Sanwo-Olu signalled to the potential partners that Lagos State Government may not have the big cheques to sign for the total transformation, now, he nevertheless informed them that “it is a journey we know will take us into the future we really should be as Africa’s most populous city and 7th largest economy.”

He assured that the “vitality of our 22 million people and political stability are valid collateral that should provide comfort in the collaboration we are seeking.”

One of the companies, Huawei, which has an impressive footprint in smart-city development in South Africa, Dubai and across Asia said through the head of its Nigeria office, Eric Zhang while taking the governor and team on a tour of the company’s  campus in Shenzhen, with the company’s global vice president, Enterprise Business Group, Laurent Fan, vice president, Government & Public Utility, David Zhang and, global public safety expert, Peter Goulding, said that “Huawei is excited that Lagos State is planning digitisation of its assets, processes, operations and public service facilities”.

“I am familiar with Lagos State and I know that the state needs this transformation and is capable of embarking on it. As someone who is very familiar with Nigeria and Lagos State especially, our company, Huawei is ready to work with Lagos on the transformation journey. I know that transforming Lagos into smart city is an exercise that will happen in phases, but the most important requirement is the government’s commitment, which you have demonstrated”, he added.

Likewise, the Ehang,the China-based world’s leading autonomous aerial vehicle (AAV) technology platform company’s delegation led by Shiny Biu, the company’s director, Strategic Cooperation said “the company is ready to partner with the state and is open to discussing the appropriate models that will fittingly serve the goals of the two parties”.

With Ehang, the governor thinks that “like other megacities in the world, Lagos State is still faced with some challenges that will require a very innovative solution. For instance, emergency situations will require an urgent and speedy response, just as when there are security challenges because the safety of lives and property are very important to our government”.

This may mean that Sanwo-Olu is considering collaboration in urban air mobility, including passenger transportation and logistics, smart city management and aerial solutions because Ehang is the forerunner of cutting-edge AAV technologies and commercial solutions in the global Urban Air Mobility industry.

To keep Lagos ahead and sustain its status as a foremost economy in Africa, the state needs to leverage its influence to attract quality investments, global businesses and large scale enterprises. Even though its GDP of $136 billion and nominal per capita income of about $5,000 suggest the prosperity of the state, indicators are unequivocal about the fact that the state is yet to maximise its potentials.

Perhaps this realisation may be Governor Sanwo-Olu’s push and propelling force. Hence, his methodical knock on Chinese investors’ doors to make Lagos the home of their businesses.  In China, he met and invited two Fortune 500 companies to locate plants and operations in Lagos State.

“As you know, Lagos is the largest city in Africa with a population of over 22 million people and the state economy is 7th largest on the continent of Africa. The state is central for easy distribution of products and a fertile ground for recruiting highly skilled workforce that will help further the innovation for which Gree Electric Appliance is globally reputed”, he told the company’s leadership, adding that “we are the major driver of Nigeria’s fifteen places improvement on the World Ease of Doing Business Index, and we will continue to drive the process for continual ascension of Nigeria on the index”.

The company expressed gratitude for the invitation, and interpreted the opportunity to expand into Lagos as a channel to increasing its share of the air-conditioning market to the region of 35% and annual production capacity from of residential air-conditioners (RAC) and central air-conditioners (CAC) from more than 60 million and 5.5 million sets respectively.

Like the Zhuhai-based Electric Appliances Inc., Gree, the board of Guangzhou Automobile Company (GAC Motors Group), led by Zeng Qihong as chairman, expressed willingness to come into the African market through Lagos.

Board members at the meeting include Feng Xingya, president, GAC Automobile Groups, Zhang Yuesai, director-general, Yu Jun, director-general of International Business and Kamel Zheng, regional sales director, African Region, and Zeng Qihong, the Group’s chairman who said: “the Group is considering expanding strongly into international markets”.

“With the governor’s invitation, we are quite confident and encouraged that coming to Lagos will be exciting. We will look into the process of establishing an operation in Lagos after our international business department has visited to carry out a visibility study of the market. But we are optimistic about coming to Lagos because of the market size and the significance of the economy to Africa” said Qihong.

It is anticipated that GAC Motors operations in Lagos will contribute to the development of the state’s economy and encourage technology transfer between the Chinese and Lagosians.  GAC Group is ranked 189 on the list Fortune 500 companies, with total revenue for 2018 being $53 billion and profit standing at $10 billion.

It is believed that when companies like GAC Motors and Gree Electric Appliance come to Lagos, they will contribute to the growth of the state’s economy and encourage technology transfer to the local economy.

In a move to address the infrastructure deficits that have held down Lagos from its envisioned greatness, the state has started making impressive efforts that will make roads smoother, connections easier with bridges in the right places, address housing deficit through disciplined urban development programmes and ease intra-city community with the introduction of a multi-modal transportation system.

When all these are fully delivered, Lagos will be a beautiful example of what African’s can make of their continent. The anxiety to address extant infrastructural gaps was noticeable in Governor Sanwo-Olu’s interactions with development partners and multilateral agencies in China.

In Beijing, at the headquarters of the China Railway Construction Company (CRCC)), the governor who attended a project review meeting with a leading political figure and chairman of CRCC), Chen Fenjian, listed projects Lagos State would require collaboration and investments from the Chinese corporations to build to completion.

“In Lagos State, we have a number of projects that we are putting on the table for you to consider even though their award will be via a competitive and rigorous bidding process that will guarantee that the projects are delivered to specifications and in a timely manner too”.

“These projects include the construction of the 4th Mainland Bridge in Lagos, our railway projects – Blue Line, Redline, Yellow Line and Purple Line, the Lekki Free Trade Zone access road, water, power and urban development projects across the state,” said Sanwo-Olu.

Also, at a different engagement with China Civil Engineering Construction Corporation (CCECC) and China Harbour Engineering Company (CHEC), the company working on the Lekki Deep-sea Port, which upon completion may contribute 70% of Lagos State GDP, Governor Sanwo-Olu emphasised the importance of the 4th mainland bridge to the government and people of Lagos State.

“Construction of the 4th mainland bridge is extremely important to our government because of the positive effect it will have on our lifestyle and Lagos economy,” said Sanwo-Olu.

Amidst the drive for functional infrastructure, industrial development and social security, Lagos still has its eyes on maintaining an ecologically balanced environment.

Even though this indication has emerged severally in the governor’s interactions with urban development corporations pitching their impressive footprints in Macao, Hong Kong and Hengquin for replication in Lagos, the discussion with Dyna Green Group, a Beijing-based company dedicated to the industry of recycling economy and renewable energy, affirmed the state government’s commitment to environmental cleanliness and ecological balance.

Muyiwa Gbadegesin, managing director, Lagos State Waste Management Authority (LAWMA) let out the impression that the agency must have found an operational model in the activities of Dyna Green in their discussion of investment and construction, operation and management, technology development and supply of the core equipment. The scope of the bilateral talks also covered the processes for the treatment of urban household waste and medical waste, as well as providing the overall solution for urban waste treatment.

“This model and partnership will pretty work well for Lagos State. We generate about 14,000 metric tonnes of waste daily, which aside from when taking off the streets contributes to wellbeing, could also bring forth energy and other useful by-products if recycled”, said Gbadegesin.

Over the past three months, the state waste management strategy appeared to have undergone revival with the introduction of several initiatives and new waste-evacuation plan. Similarly, the government is looking to commission a recycling plant, and continue with overhauling of the transfer loading plants to strengthen the capacity of the agency to keep the streets of Lagos clean.

However, with the combination of population, income and urbanisation, Lagos will need a more sustainable approach to its waste management. The meeting of these elements in a fast-growing city and economy like Lagos compels a holistic waste management regime.

With the array of needs that the Lagos State governor confronted investors, development partners, lending agencies and financial institutions with, one may begin to think about the capacity of the state treasury to execute limitless number of projects.

On the contrary, the state has awakened a collaborative model between investors and the government to foster its development initiatives and ideas. Inquest to sustainably build a greater Lagos, the government has revived its PPP model.

“We are at the stage of building critical infrastructure that will make our city more habitable. We want technology to drive economic innovation, public security, health management, waste management, traffic management, government processes and services to the public” Sanwo-Olu informed the investors.

Most importantly, the contributions of the state to Nigeria’s notching 15 places higher on the Ease of Doing Business Index is a testament to the efforts of the current government to make the state an attractive destination to investments, a notion reinforced by an extract “In Lagos, commerce is our mainstay” published by the state in the Friday, November 22, 2019 edition of the Financial Times of London’s Invest in Nigeria Report.

As Africa’s most significant sub-national government, boosting of a GDP of $136 billion, which is bigger than the economies of 46 countries and population size of 22 million, which makes Lagos the most populous city on the African continent, the state surely needs to grow sustainably.

The PPP model, therefore, may be a catapult that will take Africa’s 7th largest economy beyond its present position and help effect a greater growth above 4% expected in 2019.  Like other megacities, Lagos State has identified its social challenges and pursued the opportunities in their resolution through credible and dependable partnerships.

Like Governor Sanwo-Olu, the state commissioner for information and strategy, Gbenga Omotosho, is optimistic that Lagos is walking the path of faster growth and development.

“Yes, we have some social challenges, but therein are opportunities for growth, prosperity, development. T.H.E.M.E.S offers a glimpse of openings for investors to sow into our fertile economy because it is our path to becoming greater”, said Omotosho.

There is an unmistakable sense that every letter of the acronym T.H.E.M.E.S is an investment opportunity in the thriving economy of Lagos judging by the government’s unfolding plans and engagement of the international investment community since May 29, 2019, when it assumed office.

However, the government, notwithstanding limited resources, is expected to have its skin in the game. For the large-scale investments in infrastructure development, industry establishment and power, investors’ dollar is expected to find succour in government’s cent, beyond the state guarantee.

Accordingly, Sanwo-Olu presented areas of intervention and projects to the China Development Bank, which granted $629 million loan for the Lekki Deep-sea Port construction, China Exim Bank that has provided over 60% of funding for Chinese companies executed projects in Nigeria, maybe in the region of $38 billion and China Export & Credit Insurance Corporation (SinoSure), the risk management leg of Chinese government’s investment outflow to creditors ahead of the Lagos projects.

As Nigeria’s most significant sub-national government and a major economy in Africa, the state of affairs in Lagos remains a major point of interest to stakeholders across the globe.

The centrality of Lagos to economies in the African sub-region and her place as one of the largest cities in the world are some of the reasons the state remains on the world’s lens.

Indeed, the world has been worried about the seeming lack of direction to take the state to a premium position on the socio-economic map of the world.

But Sanwo-Olu is selling his vision for a greater Lagos with vigour and commitment. His attitude in propagating his plans for the state, oftentimes, provides a peep into his heart of good intentions and purpose. Though a politician, he has come to public service with candour, and without a doubt, the journey to actualising the greater Lagos vision is on track.