Jide Akintunde, Managing Editor/CEO, Financial Nigeria International Limited
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Subjects of Interest
- Financial Market
- Fiscal Policy
If Lagos State were a country 10 Dec 2019
When he was the Governor of Lagos State between 2015 and 2019, Akinwunmi Ambode revelled in the hype: If Lagos State were a country, it would be the fifth-largest economy in Africa. The IMF estimated the nominal GDP of Lagos at $136 billion in 2018. This estimate was only surpassed by the GDP of Nigeria ($397 billion), South Africa ($368 billion), Egypt ($251 billion) and Algeria ($181 billion).
But Lagos is not a country. It is the commercial hub of Nigeria – Africa's largest economy – and the capital of the country until December 1991.
If Lagos were a country, based on current trends, it would probably be in the middle of a national economic downturn. Lagos would be experiencing significant productivity decline and a trend of rising road-traffic-induced morbidity amongst its citizens. And if Lagos were a country, it would be leading other countries in the world in losing its middle class population through emigration, while attracting a large number of Okada (commercial motorbike) riders and street traders from its poorer, neighbouring countries.
Nigeria experienced negative economic growth from Q1 2016 to Q1 2017. The tepid recovery from the recession has been driven by higher oil production and higher oil prices, and stronger performance of the agriculture sector. But the economy of Lagos is neither oil- nor agro-based.
Lagos' services and trade economy has been jaded under the state's infrastructures that are growing in inadequacy. Trips that used to take 30 minutes or one hour within the metropolis of Lagos now take up to three hours or up to six hours, respectively. The traffic snarls are mainly caused by the epidemic of bad roads and inadequate road network, in the absence of alternative mass transit systems.
Rehabilitation of some of the roads is currently being undertaken. But the observable poor quality of the roadworks means the roads would soon return to their familiar state of disrepair. In the 2019 Driving Cities Index, Lagos ranked as the city with the worst roads among 100 major cities of the world. On the Road Quality Score of the study, Lagos got 1 out of a maximum 100 score.
Lagos similarly ranked the worst on the study's Air Quality Score. This may appear incredulous, because of reports by the international cable news networks, notably CNN, on episodic smogs in China and India. But all year long, the air quality of Lagos is, quite simply, hazardous to health.
Chaotic driving/riding behaviour, bad roads and poor air quality form the trifecta of misfortunes that commuters face in Lagos, making life in the city "poor, nasty, brutish and short." Spending hours on end on the roads, five days a week – apart from gridlocks on some weekends – is surely causing residents (and visitors alike) high levels of fatigue and stress.
According to Mustapha Danesi, a Lagos-based neurologist, the city's residents are grappling with learned helplessness. This is a situation where a person comes to believe he or she cannot control or change a situation after repeated stressful experience of it. Thus, nearly everyone is now contributing to the traffic chaos in Lagos, including senior public officials, law enforcement officers and otherwise respectable persons.
But, as Prof. Danesi told me, the situation could trigger psychiatric conditions in people that are predisposed to them. In any case, the 2019 Driving Cities Index reports the rampancy of road rage in Lagos, where drivers of public buses routinely use alcohol and illegal drugs to keep themselves "high" and help keep the city moving.
Thanks to the stressful traffic, any opportunity to travel out of Lagos for some time is to be relished. It is common, these days, to hear middle class Nigerians say "I can't live in Lagos (again)", even foreclosing taking job opportunities in the city. These sentiments are very negative for aggregate demand in Lagos, with implications for expenditures, which is one of the three approaches to calculating GDP; the others being income and output.
The economic importance of Lagos, and the current reality, now compel well-meaning Nigerians to make various contributions towards reversing the socioeconomic downturn of the state. In this regard, I have been speaking to various thought leaders. One of them, a bank CEO (who prefers anonymity), said Lagos has to go digital, which, according to him, necessitates more investment in ICT infrastructure than roads. Businesses would have to redesign their work processes and introduce flexible work hours as well as make employees who don’t require physical contact with customers and stakeholders to work from home sometimes.
He said enforcing Key Performance Indicator(s) (PKI(s)) would ensure that employees deliver on their responsibilities in this redesign of the work environments (home and offices). When or where people can't work from home, despite having access to internet connectivity, they can go to the office at different times instead of the current rigid work hours that make everyone to be on the road during the rush hours.
These practical solutions would, however, require fundamental complementarities. One of such is an urbanisation and urban renewal policy. The population of Lagos was estimated at 21 million in 2016. If Lagos were a country, its rate of urbanisation, at 5.8 per cent annually, would make it one of the fastest urbanising countries in the world. The population explosure in Lagos cannot continue without adequate planning and checks.
In the past, the state government toyed with curtailment of drifters, by 'repatriating' some people to their "states of origin" in the dead of night. This unconstitutional, haphazard measure attracted political criticism. But there is no doubt now that Lagos needs federal backing for a robust urban policy, which is intolerant of further slum-ification.
Lagos also needs to strengthen its capacities for setting standards and regulatory enforcement. Currently, its regulatory regime for road traffic has broken down. Commuters are disinclined to obey traffic regulations while the state traffic officials look both overwhelmed by, and accommodating of, the infractions.
If Lagos were a country, its potentials could make it one of the most beautiful and richest countries – in per capita terms – in the world. The city's services economy is expansive, straddling banking and finance, commerce, tourism, maritime, transportation and education. As a coastal city, Lagos could rival London in scenic beauty, if well-developed.
But, again, Lagos is not a country. And this is not altogether an inhibition of its ability to develop. However, Nigeria's 'unitary' federal structure affects governance in Lagos State, like every other state in the country, because of the poor federal leadership.
Lagos State is currently the opposite of what it should have been in Nigeria where there is growing poverty and under-development. We cannot afford to be indifferent to this.
Before I sign off, I would like to thank Financial Nigeria's subscribers, writers, clients, partners and staff for our collaboration in 2019. Here is wishing you merry Christmas and happy new year in advance!