Olajide Olutuyi, Founding Partner, Greentouch Consulting Inc., Canada
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- Frontier and Emerging Markets
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Making the economic republic of Lagos great 14 Nov 2017
Lagos State Governor Akinwunmi Ambode
During my recent visit to Lagos, not unlike the previous ones, I had the opportunity to observe and scrutinize the energetic metropolis. This often required me to take off my Nigerian lenses and put on the lenses of a tourist, an investor, or an expatriate. With these different critical lenses, I was able to assess, without bias, the real situation of things.
My conclusion during this last visit confirmed what is already known: Lagos is far ahead of all the other sub-national units in virtually all aspects of development, including the civil service. Indeed, Lagos is now an economic republic on its own.
Welcome to the ‘Economic Republic' of Lagos
According to the 2016 edition of Demographia World Urban Areas, published by NewGeography.com, Lagos is ranked the 24th largest city in terms of population within the recognised metro area. From the mainland to the island, every corner of the sprawling state is economically vibrant. Yet, there are untapped opportunities and unrealized potentials lurking everywhere.
It is a well-known fact that since the 19th century, Lagos has been a melting pot of Africans and Europeans. The barber who cut my hair in Lekki, the lady who gave me a nice pedicure in Ikeja, and one Uber driver and another Taxify driver were all foreigners who had come into Lagos from neighbouring African countries as economic immigrants. Taken as a country, Lagos is the 5th largest economy in Africa.
Despite the lack of government’s support and paucity of basic infrastructure, the Lagos entrepreneurial spirit is not dampened. CNN’s Anthony Bourdain noticed this during his recent visit for his popular travel and food TV show, Parts Unknown. “I have never been in any place where I’ve seen such wild, entrepreneurial, positive thinking, a go-go, unrestrained capitalism completely out of the purview of control of government,” the American chef and television personality said. The Rockefeller Foundation listed the state among the 100 most resilient cities in the world.
Development experts have pointed out that a city’s performance reflects the strength of its economy, social conditions and the environment. Regardless of its economic achievement thus far, Lagos’ urban development requires smart thinking and global best practices in urban planning to make the city sustainable and also feature in the best cities rankings. Singapore rose from a colonial harbour to a world-class city-state in just a few decades. In its report “How to make a city great,” McKinsey and Company warns that, “Economic growth, however, does not automatically deliver a better quality of life for citizens and can often harm the environment. Indeed, many cities find they have to take expensive remedial action to fix problems caused by growth itself. It is better, then, not to assume that all growth is good, but to learn what smart growth looks like.”
Making Lagos great
As it grapples with the challenges of urbanisation, there are critical sectors that the government must pay close attention to and provide necessary interventions in. Lagos is the commercial, cultural and entertainment capital of Nigeria. It is home to the nation's major ports, and the Nigerian Stock Exchange (NSE); the headquarters of virtually all the banks are in the city. Most of the country's manufacturing industries, multinationals and oil companies are based in Lagos. This explains why there is a high incidence of migration from less economically active sub-national units to the state. People who are seeking employment opportunities throng to Lagos, hoping to improve their living conditions.
Lagos is the capital of Nollywood, the metonymy for the Nigerian movie industry. The industry’s major distribution centres are located in Idumota Market on Lagos Island and Alaba International Market in Ojo. This billion-dollar sector with huge potential to support other value chains of the Lagos economy remains poorly regulated. This is stifling the potential of the industry. Practitioners and consumers alike are dissatisfied with the performances of the key regulatory bodies, Nigerian Film Corporation (NFC) and National Film and Video Censors Board (NFVCB). These bodies have not been able to fulfil their mandates to provide an enabling environment for the growth of the film industry. The industry is still bedeviled by piracy and weak distribution infrastructure to ensure videos and DVDs get access to the market.
With its many private beaches and resorts, Lagos can easily be one of the leading tourism destinations in Africa. It is surprising that I have never come across an advert in an international tourism magazine that tells the international community about the culture and tourism potentials of Lagos. Although some steps have been taken by the government to revive a number of cultural festivals, and there are plans to build six theaters across Lagos, these would not be enough.
The culture and tourism sectors require massive and focused investments both by the public and private sectors. Seoul, the world’s 5th largest city, is home to 115 museums. The South Korean capital also has the world’s largest indoor amusement park, Lotte World.
Traditionally, the physical elements of a city are its road networks, buildings and the open spaces. Although Lagos has one of the largest and most extensive road networks in West Africa, the transportation networks are sorely inadequate to meet the demands of the vast and growing population. Road congestion at peak hours remains a perennial feature of the state. Although its BRT system is functional, it is not extensive. A rail system that runs across the city is still under construction, while its water resources are underutilized. A total reform of the transportation system is required if the state intends to prepare for the future.
Other areas that need urgent attention include power, water supply, broadband, waste management, and affordable housing. Improvements in these areas will attract foreign investors and help small and medium scale businesses thrive, thereby helping to increase tax revenue for the state. During my last visit, I saw a lot of small and medium-scale businesses operating independently of state-provided support or public infrastructure. This kind of situation does not motivate business owners to pay their taxes.
The government also needs to pay attention to the retail industry. Analysts have forecasted that the next frontier of middle-class growth will be in the retail sector. McKinsey and Company’s report, “Africa’s growing giant: Nigeria’s new retail economy,” estimates that between 2008 to 2020, there is a $40 billion growth opportunity in food and consumer goods in Nigeria. Lagos will attract a major part of this. A well-thought-out retail building policy will help to attract the right retailers.
In all this, the government needs to collaborate with the private sector to achieve its programmes. Under the privately-run park system in Tokyo, parks are developed and managed by the private sector. Hope SF, a partnership between the city of San Francisco and private developers, is transforming distressed public housing units on five sites into thriving, mixed-income communities with more than 50,000 housing units.
As Lagos continues its rapid urbanization process, it will be foolhardy to leave behind the vulnerable residents of the state. Social issues need to be taken seriously. Mayor of Boston, Thomas Menino, intoned an inclusive vision when he said: “My job is to make sure that everybody has an opportunity in Boston. More than 50 percent of our population is made up of different minorities. We have to look out for everyone. This includes good education, good schools, and good services.”
A well-drafted social entrepreneurship framework can help in addressing social issues, while creating jobs and reducing unemployment. The value proposition of great cities is not limited to economic development; they offer opportunities to all residents, reduce inequalities and protect the vulnerable.
The late American urban planner, Kevin Lynch, prescribed the five basic dimensions of a city’s performance as: vitality, sensibility, fit, accessibility, and control. According to Lynch, a vital city successfully fulfils the biological needs of its inhabitants, and provides a safe environment for their activities. A sensible city is organized so that its residents can perceive and understand the city's form and function. A city with good fit provides the buildings, spaces, and networks required for its residents to pursue their projects successfully.
An accessible city allows people of all ages and background to gain the activities, resources, services, and information that they need. A city with good control is arranged so that its citizens have a say in the management of the spaces in which they work and reside. Until Lagos meets the above criteria, its mega-city status will remain a mirage and questionable.
Olajide Olutuyi, a Financial Nigeria Guest Writer, is a graduate in Management from the University of Lethbridge, Canada. He is Founding Partner, Greentouch Consulting Inc. Canada, Co-Founder/CEO Top-Olax Energy Ltd. He is on the Board of Calgary Quest School, Canada. Email: Ola.email@example.com. Twitter: @jideolutuyi