Lagos eats superlatives for breakfast. With a side of moi moi. “This city has the largest concentration of black people on the planet,” says architect Theo Lawson. “It gives Lagos its spirit of resistance.”

It is also one of the top 10 fastest-growing cities according to the UN; from 15 million people in 2021, it is slated to hit 25 million by 2035. “We have about 1,000 people arriving to settle every day,” Lagos State Governor Babajide Sanwo-Olu tells The Africa Report.

With GDP per capita rates of $17,000-$18,000 (measured in purchasing power parity), people living in Lagos State are also some of the richest in Africa. That would put Lagosians within touching distance of countries such as Albania, Colombia or Botswana. By 2018, Lagos had 14 million middle-class residents – the highest number for any African city, and nearly four times the number in nearest rival Luanda, Angola, according to Statista.

“We get lost in the statistics of the country,” says Bismarck Rewane, CEO of the Financial Derivatives Company in Lagos. “We represent under 1% of Nigeria’s land mass. But we deliver nearly a third of Nigeria’s GDP.”

Stronger, faster, better

More is yet to come. The hyper-urbanising ­corridor of Lagos’s Lekki peninsula – bookended by the new Dangote refinery and the freshly painted blue cranes of a new deep-sea port – is testament to industrial renaissance in the west. Getting around will be faster with a new metro line set to cut journey times for inbound commuters from three hours to under 30 minutes.

The city’s economic elite are planning to turn Lagos into an international finance hub, creating a Singapore-style destination for global investors looking to expand in the region. The ascension of a former Lagos State governor to the presidency has sparked enthusiasm from some of the Lagos elite.

Over eggs at the new Toast café of the Eko Hotel, the CEO of one of the largest international investment banks active in Nigeria points to the new operating system at the heart of government: classical macroeconomic orthodoxy, no fuel subsidy, no managed exchange rate and a central bank governor who will not use monetary policy to pursue fiscal goals.

Cost of compromise

Different beats can be heard elsewhere; from the markets, where the price of onions has quadrupled, to the pain felt by those at the other end of the scale, whose fortunes have been slashed by a stroke of a plummeting naira. “I am worth half of what I was in dollars a year ago,” says an Abuja tech businessman, who asked not to be named.

Nestled in the belly of Old Lagos sits a small plot of land. Dotted with trees, encircled by a thick red-brick wall and overlooked by some of the city’s first high-rise buildings, it embodies the spirit of defiance that gives Lagos its special place in the nation.

It is not the neat pied-à-terre of a Lagosian billionaire – though plenty admire this prime real estate. Neither is it a polo club, nor a parking lot for yellow Danfo buses. It is not a nightclub crammed with it girls and barflies, eligible bachelors and bone-rattling bass. Nor yet an over-filled housing block.

Freedom Park, as it is now known, was the site of the first British prison in Lagos – Her Majesty’s Broad Street Prison. Early colonial authorities, frustrated by locals burning down the straw-hut penal buildings, decided to invest the princely sum of £16,000 in a purpose-built steel gate. The entire colonial education budget for Southern Nigeria at the time was £700.

Later, the prison housed some emblematic figures of the anti-colonial struggle, including Obafemi Awolowo, Herbert Macaulay and Lateef Jakande.

By the time the British left in 1960, Lagos again became the epicentre of resistance, this time against the military governments of the 1970s, 1980s and 1990s. Fela Kuti, musical and ­political icon of the period, is feted each October in Freedom Park with ‘Felebration’.

In 1976, Nigeria’s military government led by Olusegun Obasanjo decreed that Abuja should become the Federal Capital, carrying out the wishes of General Murtala Muhammed, who had been assassinated. The city was built up throughout the 1980s and the move occurred in 1991. With the end of military rule in 1999, Obasanjo came to power again as an elected president. At that time, the governor of Lagos State, Bola Tinubu, was from an opposing political party and seen as a threat by Obasanjo.

The result: Lagos was starved of the capital funds it required, but the spirit of resistance did not die. “Lagos was really a destitute city,” says current Lagos State Governor Sanwo-Olu.

Taxing times

It is hard to exaggerate how dysfunctional Lagos was at the turn of the century – mountains of rubbish, rampant criminality, a state government focused on stealing public funds, with schools and hospitals sparse and decrepit.

The answer from Tinubu’s cash-starved administration at the time was to work to build up the tax base of Lagos State. Individuals, companies and government agencies that generated cash were harnessed to this microcosm of the social contract.

Speaking at Princeton University in 2009, Tinubu recalled rebuilding the civil service, setting up the tax system and forcing banks to use SWIFT international payments to do business with the state government.

“No more cash payments to [the] government,” said Tinubu. “Revenue that was [N]600m a month grew phenomenally to N2bn, N3bn, N4bn, N5bn. It was fluctuating between 10 [and in] a bad month you have eight.”

The growth of the tax base allowed Lagos to borrow on global capital markets. “Lagos benefits from a broad tax base and a diversified economy that contribute to a stable revenue structure led by internally generated revenue,” said Fitch ratings in its September 2023 report on the city. Debt service is kept “prudently” at under 30% of government revenues.

Because they pay their taxes, citizens and corporations expect services and goods in return – a step into modernity. Most agree that Lagos has been a success story over the past few decades, even as the country flounders.

Back in the fold

Could Lagos’s ability to act as a proto-nation, to push back, ultimately seed better fortunes for the country? This is contentious ground.

The past eight years of rule by northerner Muhammadu Buhari was not widely applauded by southern Nigerians. The fracture lies deep in Nigerian society and politics – the north and south were joined by the British in 1914, and much post-colonial politics has involved domination of the south by a northern military elite, of which Buhari was the ultimate example.

One Lagos-rooted financial sector player, requesting anonymity, recalls when Tinubu won the presidency. “My whole family said ‘Yes!’ not because they are blind to Tinubu’s background and flaws, but because this was about the south taking back control – as long as Tinubu can create a system that outlasts him.”

Optimistically, this involves Abuja’s national-­level civil service being reformed and focused on growth in the way that Lagos’ state machinery was oriented towards development. However, the pessimists fear that those aspects of dysfunctionality, which still exist in Lagos, will be replicated at a national scale.

One bright spot, says our finance professional, is the politics of Lagos of the past two decades, which, if not perfectly democratic, was at least inclusive.

“The reason for [Akinwunmi] Ambode’s demise [the former governor, who served one term] was to prevent an implosion in the powerful APC [All Progressives Congress] which had been cut out of various deals by Ambode,” he says. “Tinubu had no choice, as he has never been an autocrat.”

High hopes

He points to the popular coalition that Tinubu put together – market traders, traditional leaders, even the attempts to formalise some parts of the underworld into the National Union of Transport Workers – as proof that there is a pluralist approach.

Tax and pluralism might not be the sexiest bandwagon, but given what Nigeria has experienced in the past eight years, it might be worth giving it a go, he says.

Lagos has to leverage its very strong financial-industry presence to become one of Africa’s premier investment destinations

Even for the optimists, plenty of questions remain. Will the rising sea levels engulf the city? Will Lagos’s relative prosperity attract overwhelming waves of internal migration?

But no one doubts the will to turn Lagos into an international finance hub.

As the green, blue and yellow ‘Lagos is open for business’ float crawled through the streets of London for the Lord Mayor’s Show, the great and the good of the Lagos financial elite gathered to promote their vision.

Aigboje Aig-Imoukhuede, the co-founder of Access Bank, CEO of Coronation Capital and now co-chair of the newly inaugurated Lagos International Financial Centre (LIFC) Council, says: “Lagos has to leverage its very strong financial-industry presence to become one of Africa’s premier investment destinations.”

The LIFC, whose other co-chair is Governor Sanwo-Olu, brings together the leading institutions in the finance professional services.

The idea is straightforward. Strengthen significantly the banking, insurance, technology and capital-market sectors. Give large institutional investors the confidence to do their deals from Lagos for the rest of Africa.

“And then a lot of it will be left here,” says Aig-Imoukhuede. “They will see the many opportunities.”