- Lagos is Nigeria’s biggest economy and one of the biggest on the African continent, many lessons can be taken from the way it manages its economy.
- Lagos state and city exploded on the economic scene through better government support and assistance to its growing tech scene.
- To replicate the kind of growth that has been seen in Lagos, Nigeria should work on implementing similar governmental support on the nation-scale.
Nigeria, the "Giant of Africa" is known for having a particularly robust economy and regularly makes it as one of the ten largest economies in Africa. Last year the Nigerian economy retained strong growth, despite a small setback in the last quarter of the year. In the first quarter of this year, Nigeria saw strong growth according to the National Bureau of Statistics (NBS). Among the West African nation’s biggest economies, one shines at the very top, with a GDP of approximately $33.7 billion, trailed by the River State at $21billion and Delta State at $16.7 billion.
The record growth of a nation constantly beset by poor government, unequal economic distribution, and most recently terrorism has caused many to examine just how the nation does it. To answer that question, one needs only to look at the biggest economy, Lagos.
Lagos City and Lagos State
Located to the South West of the country, Lagos city sustains a population of about 22 million people on only 452.23 square miles (about 1.5 times larger than New York City). It’s also the countries most urbanized region and one of the largest economies in all of Africa so economists have looked to the region to investigate how the Nigerian economy ticks.
In just the half a century after the discovery of significant oil reserves in the country, Nigeria is a well-known petroleum state and the 9th largest exporter of oil on the planet. Oil reserves, which usually economic stability for other countries like the United Arab Emirates and Saudi Arabia has, unfortunately, lead to significant corruption in the country. Nigeria exports crude oil and imports refined, usable oil. Therefore, the economy is arrested by multiple dealers and other middlemen who keep a tight grip on the industry. While a state of the art oil refining facility is being built in a neighboring city, options to better control oil production in the country don’t exist.
The problem of how to make such a chaotic industry benefit the country doesn’t seem to plague Lagos so many are still looking to the area to understand it’s astronomical economic take-off, despite these obstacles.
Run by former big oil executives, the private sector in Lagos was significantly developed, especially to benefit oil procurement. Although the infrastructure leaves much to be desired in terms of access and safety, in less than two decades, significant economic support has gone towards bettering the roads and infrastructure in the city and many feel an increased quality of life living there.
In Lagos State, the government, in an effort to stimulate better economic growth has incentivized investments in the region by investing in infrastructure, creating more business-friendly policies and investing heavily in security agencies. Though most terrorism seems to have been contained in the much poorer, northern region of the country, in order for investors to feel comfortable coming to Lagos from outside of the country or even the continent, security is integral.
So far it’s worked well; Lagos city has managed to attract significant contributions from foreign investors. In 2017 alone, the city’s economic output was approximately $136 billion, a third of the country’s GDP. In addition to oil, Lagos is the hub of Nollywood, Nigeria’s film industry and one of the largest on the planet and several gorgeous beaches, frequented by tourists.
The government in Lagos state also made strides to turn Lagos state and city into hubs for other development. For instance, the signing of the Lagos State Employment Trust Fund (LSETF) was implemented to assist young entrepreneurs who need to access funds for their education or endeavors. In Lagos city, though it’s been called one of the "least livable" cities in the world, residents enjoy safety, a strong economy, and a thriving tech scene because of measures implemented by the state and city government. The state government also put in fiber-optic cables to enable businesses and startups can function at full capacity in the area, which has reduced unemployment and made access to services easier.
Where to go from Here
The rest of Nigeria and maybe other nations as well can learn a lot from Lagos state and city, however, the learning curve goes both ways. The increased state investment into infrastructure, education, and employment should be replicated where possible but government intervention shouldn’t stop at the state level. For a country with such a strong economy and viable natural resources, Nigeria has to find a way to ensure wealth, development and security are the goals for nation-wide initiatives.
Even with governmental assistance, another problem at every level of government is corruption. This is an issue not solved overnight or in a straightforward manner but if Nigeria has any hope of replicating and maintaining the kind of economic growth that has been seen in Lagos, government support and intervention should be complemented by the election of a trustworthy government on all levels.