Lagos State boasts of more than 21 million people, according to the state website, within 3,577 square kilometers of territory. Its GDP is bigger than that of Kenya, and larger than the combined GDPs of 25 other African countries. If Lagos were a country, it would be the 4th largest country in Sub-Saharan Africa. Although it is the smallest of the 36 states, it contributes 25% of the national GDP and 32% of the non-oil national GDP.
Lagos has over the years positioned itself to be the economic capital of Africa’s largest economy. In ten years, it has grown at a faster pace than its counterparts and weaned itself off the key resource in an oil-dependent national economy.
At an average GDP growth of 7%, it has exceeded the national GDP rate of 5.36% over a 10-year period. This is expected as Lagos contributes over 50% of national port revenue (the main port is situated in Lagos), over 70% of international air traffic, and 50% of national energy consumption. With such growth in economy, population and industrial activities on a relatively small land mass, there is bound to be challenges.
An average of 23 billion man hours are lost yearly to traffic congestion as about 1 million cars are commuting on the 9,990-km stretch of roads in the state as road transportation is the key mode for getting around. How about the housing? It is densely congested with some of the buildings extending into road spaces designated by the government. Dilapidated structures litter the city, crying for refurbishment.
Congestion and creation of waste (industrial, domestic and medical) go hand in hand and the present poor waste management and recycling system complicate issues. Overpopulation in the presence of these factors gives rise to poor sanitation and hygienic conditions.
Cost of living is also high up in the clouds. Did you know that Lagos State is one of the most expensive cities to live and work in? According to Savills some years back, Lagos comes ahead of Singapore and Dubai and just behind San Francisco and New York. The urban and rural inflation index goes further to buttress this point.
For February 2016, the urban index grew by 12.3% (a 3%-increase from the previous month) while the rural index jumped by 10.7% (a 2.3%-increase). The Urban Index is used when measuring inflation in Lagos State. As this is an average, the inflation rate in that state is most likely higher than the 12.3% reported for the entire country, further eroding the purchasing power of Lagos residents. I can bet that given the right incentive, residents of Lagos State will be ready to migrate to greener and saner pastures.
Lagos is the 7th most expensive city to live and work in
Can you see a solution?
The greener pastures could come in the form of the other 35 states in Nigeria.
What are the other states doing to take a bite from the Lagos pie by way of creating incentives for a migration from Lagos? There is a need for other states to diversify from their reliance on oil – Federal Account Allocation. A need to be self-sufficient. States need to start thinking of creative ways to grow IGR in an inclusive manner to attract investment, skilled labour, and other resources.
Which of the states is positioning itself to be the Silicon Valley of Nigeria besides the Yaba Tech space in Lagos? How about attracting service companies (call centres, perhaps) that do not require face to face contacts with clients? Just by migrating from Lagos to a less urban space, the purchasing power of an employee at a fixed salary increases.
Nigeria is yet to boast of a mega world class recreational park – this requires a large expanse of land that Lagos cannot offer. Which state is actively identifying investors and offering incentives such as partnerships? Which is offering land as equity?
How about sea ports? Calabar Port, Delta Port, Rivers Port in Port Harcourt, and Onne Port? Can you imagine port activities without a Lagos? The Lagos port gridlock costs the nation N35 billion in a typical day. Why is Rivers State’s sea port under-utilised while Lagos suffers from congestion? The problem is multi-faceted but we can set realistic deadlines accompanied with concrete plans towards meeting decongestion and usage objectives.
Manufacturing is another key sector as it contributed 9.6% to the GDP in 2015. Other states could position themselves to attract investors in all arms of manufacturing – oil, cement, food, beverage, tobacco; textile, and footwear; wood and wood products; pulp paper and paper products; chemical and pharmaceutical products; non-metallic products, plastic and rubber products, electrical and electronic, basic metals, iron and steel; motor vehicles and assembly; etc.
Benue State is known as the food basket of Nigeria. It is strategically located in the middle belt of the country with vast fertile land and has an advantage and capacity to produce virtually all major food crops of the nation. It should actively source for the establishment of food processing companies. Food processing reduces the weight of the food from its natural form and also cuts down the wastage as a result of a weak value chain. Benue already has a land acquisition policy to aid investment, but where is the political will behind it?
Poverty and social exclusion is a major challenge in the broader Nigerian federation today. Poverty rates range from 16% in the South-West where Lagos is located to 50.2% in the North-East. This initiative poses an opportunity to address this challenge.
Host states stand to benefit from the migration out of Lagos
It is a win for host states. Along with taxes that will accrue due to increased economic activity, there are positive effects that will be seen in the form of increased demand for goods and services-improvement in money circulation, a bump in real estate growth, job creation, a hike in investment activities and ultimately a larger GDP.
Let it be known that there’s room to attract investors operating in the local space with the right incentives.