Top 5 Reasons Why Lagos Works Better Economically Than Other Nigerian States.
It is public knowledge that Lagos works better economically than the other Nigerian States but the reasons why are not really as clear or widely known to most people. Lagos in many ways is Nigeria’s equivalent of London to the United Kingdom and New York to the United States, as it stands as the major hub and melting pot for Nigerian culture, finance, media, and technology among other things. Home to over 21 million people, Lagos alone accounts for 60% of Nigeria’s industrial, commercial and financial output, despite covering just 0.4% of the country’s landmass, has an average per capita income above $5000, an output above $136 billion, and generates 75% of its revenue away from federally allocated funds. To put things in context, the Lagos economy is bigger than the whole Kenyan economy, which happens to be East Africa’s biggest economy. Why is Lagos this big, what makes it work, here are 5 reasons why.
1. Location and Infrastructure.
People may not be aware of this, but location and infrastructure are the fundamental reasons why Lagos works better economically than virtually any other Nigerian State. As with other major city-state hub areas around the world such as New York, London, Amsterdam, Singapore, Hong Kong, Tokyo, Sydney, California, etc, Lagos shares the status of being a coastal city-state area. Being close to the Atlantic Ocean means that Lagos is the pathway for the trade of goods and services in and out of Nigeria and thus the place where money stays before it heads anywhere else in the country. With its strategic coastal advantage, Lagos is blessed with the major airport in Nigeria (Murtala Muhammed), the major seaports in Nigeria Tin can, Apapa), and has the right amount of investment needed to invest in its series of bridges and road networks which improves its overall economic wealth.
2. Pro-business policies.
The area of pro-business policies has been an area exploited in Lagos better than any other Nigerian State. There is an understanding in Lagos more than in any other state in Nigeria, that businesses and capitalism create wealth and growth, and more effort to provide pro-business policies as well. Some of these policies range from tax incentives for long-term project build-up, such as the Dangote Refinery, to capital project incentives like internet broadband for tech startups as evident in the Yaba startup community today. Such enabling moves by and within Lagos state make it an attractive destination for foreign and domestic capital and have provided it with a tax base of 75% of its generated revenue.
3. Population mix.
With a strategic coastal advantage and policies that are great for businesses and capitalism, Lagos can attract the very best of what Nigeria has to offer in terms of talent from all ethnic groups across the country. What that population mix offers Lagos is a combination of new ideas and better skill sets which make better products and services to improve businesses and the economy. A better Lagos economy created from an attraction of the best population mix makes Lagos the first attractive destination for investment in Nigeria. A population of more than 21 million people offers Lagos the market to buy and consume products and services on offer, which is a huge attraction for investment as well.
4. Economic Diversification.
Compared to the other Nigerian states, Lagos works better economically because it is not dependent on one or a few economic sectors. While other Nigerian states are driven economically by the civil/ government sector, Lagos leads in every sector of the Nigerian economy and is home to their many business headquarters from banking to manufacturing, music to movies, ICT, and the very many startup companies popping up in Nigeria. With such diversity in its economy, Lagos has numerous economic activities that are vital for wealth and growth and the flexibility to cope in dire economic times more than any other Nigerian state.
5. Stable Leadership.
Given the fact that economics can’t work in isolation of politics, it's easy to say that the stability in leadership in the hands of a single party for at least the last 20 years has enabled its steady economic progress, even if not fully optimal. One party leadership and the fact that since 1999 every governor of Lagos has had one form of past private sector experience or the other has provided certainty and policies that have been good for business operators. In that regard, Lagos has maintained a political environment far different from the uncertainty and political instability rampant in other Nigerian states, which happen to be a fundamental non-starter for most businesses and economic activities being existent in those states.
Final Note.
The reasons provided above don’t absolve Lagos of its many deficits and lapses when compared to top city-states across the developing world. Lagos is still riddled with an infrastructure deficit, incoherent pro-business policies, economic mismanagement, lack of social services, and political shenanigans which all need to be acknowledged and sorted out for it to reach its full potential from a global standpoint.
Originally posted first here: https://titanic-news.com/top-5-reasons-why-lagos-works-better-economically-than-other-nigerian-states/
