‘Economy of Lagos is expanding, outlook bright’
While Nigeria’s economy is thought to have contracted in 2017, the commercial capital Lagos continued to expand. CNBC Africa’s Wole Famurewa spoke to Steve Ayorinde, Commissioner for Information and Strategy for Lagos State and discussed the spending plan and outlook for the state’s economy.
Recession is a word that we approach cautiously in Lagos because you also have to be sensitive to the general feelings in the country, but the way you look at ht eLagos economy is that last year Lagos State actually generated more money than the year before it, when there was no recession.
Is that internally generated revenue by Lagos State?
Absolutely. And if you also look at the budget we’ve passed into law, N812 billion, which means that you can see that in about two years of Governor Akinwunmi Ambode’s Administration, the governor has almost doubled the budget size that he met in 2015, which means that the economy of the state is expanding. Lagos State is now an oil producing state, it has the largest petrochemical industry, the largest fertilizer west Africa, the largest refinery in Africa in a year or two will all be happening here. It means that something is happening and work has started and without a doubt, this is the fifth largest economy in Africa.
It has two of the most lucrative ports in Nigeria are in Lagos, so you can’t discount the fact that financially speaking, there’s actually no recession in Lagos state, but as I said we have to be sensitive to the general mood of the nation and what is going on
But while we’re not trying to be insensitive to the broader country’s plight with the recession. I think it’s important to really highlight what is going on in Lagos. Like you mentioned, we’re looking at doubling the budget size in 2 years. So let’s get a sense of where that spending is going and the impact that you’re expecting.
Infrastructure. I say to people, one of the most iconic features of Lagos is the Lekki Ikoyi bridge. The one that Mark Zuckerberg jogged on. That image went viral all over the world. That bridge, as fantastic as it is, came at the 6th year of Fashola’s administration. In Governor Ambode’s first two years 2 similar bridges are on their way, not just to serve as iconic structures but to ease traffic in two of the most densely populated areas in Lagos. Those two fly over bridges will be ready before the 27th of May as part of the legacy and iconic projects that we thought are necessary to celebrate Lagos at 50. As we’re commissioning those two, work will be starting on another bridge to serve Agege. Work is progressing. In terms of infrastructure, roads are a major concern of this administration.
For a state that has about 9,000 roads, 6000 belong to local government and local council development areas means that there’s a lot crying for attention in these areas. This was why last year, we embarked on 114 roads, the first of its kind in Nigeria, we’re concentrating on inner and local government community roads. That’s 2 per local government and LCDA. This year we expanded the scope to 181 roads. This means that the least that any LCDA will get is two, but we realise that there are other areas that require more than two because of the nature of the road network. We don’t just want to fix roads, we want roads that will add to the economic activity; that will lead from one point till the other; that will connect to the express ways and the major roads. That’s why we said 181 roads. All will be delivered in addition to the other roads. You need to go to Epe and see the kind of road infrastructure that we’re putting on there. So, our area of focus is road infrastructure is without a doubt.
In addition to this we’re working in the hospitality and creative sectors. We’re building 6 theatres across Lagos in all the divisions of Lagos state, Epe, Badagry, Ikorodu. Areas that have otherwise been neglected, because we see that Lagos is not just about Lagos Island or Ikeja. Let every part of Lagos feel development under Ambode.
It sounds like a really great project that you’re putting out there, and the government is spending quite a bit, but then, we’ve heard a lot about what the government is doing, let’s move over to the private sector investment. It’s a difficult environment because of all the forex issues but tell us about that, the types of flows of private sector capital that we’re seeing into Lagos.
You know the beauty of what Lagos is enjoying is that practically everything that Lagos initiates involves a buy in from the private sector. Take for example the Security Trust Fund. You can’t have a mega city with 21 million people and counting without adequate provisions for security. the bulk of the money that goes into the Lagos state security trust fund actually comes from the private sector. It’s the same thing that we have applied with the Lagos State Employment Trust Fund. It’s a N25 billion, 4 year project but what we’re trying to say is that Lagos is partnering with the private sector to ensure that a sort of soft loan goes out to a number of young entrepreneurs to start up businesses and everything. The job of government is to provide an enabling environment for businesses to thrive, for salaries to be paid and for activities to flower. And that’s what Lagos state is trying to achieve with the way we’re softening all the laws that pertain to registration of businesses. We have the Lagos global office of home office affairs, serving as a one stop shop for people and businesses.
But are there any major projects coming from Lagos that we can anticipate this year?
A lot. Take for example the oil and gas sector. The Tunde Folawiyo oil and gas initiative. People say Lagos is an Oil and Gas state now, but it’s a private sector driven thing. Yes Lagos will gain statutory benefits as an oil and gas producing state, but who will derive the greatest benefit? It’s the Tunde Folawiyo company that will employ people and ensure that money is coming into the state and into the pockets of people that will be employed. It’s not coming to government directly but we’re ensuring that support is provided to the private sector. The whole idea is to partner with the private sector. If the economy is not, booming. If civil servants, are not getting their salaries, the rippling effect touches practically everybody.
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