Can Lagos Be Harnessed to the Rest of Nigeria? February 1st, 2024
Courtesy of The Africa Report, a report on Nigeria’s efforts to create a new industrial hub in Lekki:
Successful economies connect their growth poles to their hinterlands. In Nigeria, the Lagos ‘locomotive’ is isolated from the ‘carriages’. Can that change with a new industrial hub in Lekki?
Lagosians are ambivalent about the inflows of people that Nigeria’s economic capital attracts. “How do you deal with migration, with criminality,” asks economist Bismarck Rewane, the CEO of Financial Derivatives Company in Lagos. “Nigeria is not ready for such income inequality.”
It is an issue that the Lagos State government is trying to come to terms with. Governor Babajide Sanwo-Olu tells The Africa Report that a questionnaire is being prepared for distribution through transport companies that bring people to Lagos “so we can determine things like how many new schools to build in what area; so we can plan”.
Beyond preparing Lagos for the influx of people, Rewane says the answer is better integration of Lagos with its neighbouring states, which is already starting to happen.
When General Park Chung Hee took power in South Korea in 1961, the first thing he did was to create a road between the capital, Seoul, and the second city, Busan. Trucks would take more than a day to make the journey. “Politicians lined up to lie down in front of the diggers,” says Yoo Chang-ho, deputy secretary to President Yoon Suk Yeol.
“They said the country needed food, not roads.”
Paving the way
Park built the road anyway. Busan now houses the fifth-largest port in the world, and South Korean farmers across the country were connected to the city’s markets. Economic growth and food security were boosted with one bold sweep of the tarmac.
The pulling away of Lagos State from its peer group over the past two decades is perhaps inevitable. London, after all, is asymmetric in its relative prosperity compared to the rest of the UK. But in the UK, connectivity between the economic driving force of London and other cities and ports – Manchester, Cardiff, Newcastle, Glasgow, Dover – is well established by road and rail links.
In Nigeria, the ‘locomotive’ is isolated from the ‘carriages’.
“The first thing we should have done is build a railway between Abuja and Lagos,” says Folahanmi Fagbule, deputy director at Africa Finance Corporation. For Nigeria to flourish, he adds, the Tinubu administration will need to find incentives for governors to link with their wealthiest neighbours.
Amid the tornado of bad news around the collapsing naira in October, an approval for contracting 11 highways went almost unnoticed, amid the welcome news that works minister David Umahi was not ripping up his predecessor’s projects but carrying on the work of Babatunde Raji Fashola – another previous Lagos governor.
Also unnoticed was Ogun State successfully applying to rehabilitate and manage the road between the airport zone and Ota, Ogun State. “They know how important it is for them,” says Olukorede Adenowo, former CEO at Standard Chartered Bank. “Lagos State is to Ogun State what New York is to New Jersey.”
The commissioner for commerce and industry in Ogun State, Bimbola Ashiru, has helped grow the economic corridor between Lagos and Ogun, creating a free trade zone with Chinese investors and bringing in global bluechips like Olam, Nestlé and CCECC to build factories there.
Leaving Victoria Island at 7AM, you will be happy to arrive at the Lagos Free Zone and Lekki Deep Sea Port complex by 9.30AM. The road is also improving; many people who live or work in the area will tell you about being stuck in Lekki peninsula traffic for four to five hours.
Congestion or not, people vote with their feet, and the number of housing complexes mushrooming alongside this 100km stretch of highway tells its own story about where Lagosians want to live. So too do the tell-tale signs of the Corona School and Greensprings School campuses – elite institutions for affluent Lagosian families.
It is not just proximate neighbours who need connecting to the financial muscle and market of Lagos State. The hinterland beyond Nigeria is unconnected to global markets.
Lagos plays a key role in the new deep-sea port and industrial zone complex, spearheaded by long-term Singapore investor Tolaram.
Trading places
The port is the first in the country that allows deep-draft ships to dock and aims to make Lagos a transshipment hub, competing with Lomé down the coast. It is slated to handle around 1.2m TEU a year in the first phase.
Across the road in the industrial zone, a joint venture between Tolaram and Kellogg’s is pumping out packets of cornflakes. Giant gleaming plug-and-play hangars are prepped for a new generation of investors targeting the middle classes of the region. Some 300ha is expected to be completed by the end of 2024.
The road connections being built to major arteries leading up and out of Lagos State, rather than traffic heading back into Lagos, are attractive to investors.
Upgrades in the road network around the Lekki Deep Sea Port.
The ports in Lagos at Apapa are jammed and trucks are banned from the city during the day. The Lekki Free Zone can move goods upcountry via the expanded Oke-Oso road to Araga, which links to the A121 – the planned 7th axial road signed with China Harbour Engineering Company will accelerate matters.
To the east, the highway links up to Anambra State; it has also received investment. Smoother and wider, it connects the industrial zones of Nnewi and Onitsha, where Nigeria’s nascent auto sector is based, with dozens of smaller parts manufacturers and big players like Innoson and OMAA.
Lagos may yet spark an industrial revolution by connecting a port to a country. Park would approve.
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