September 5, 2014

The Competitiveness of Cities: Lagos – World Economic Forum

Dolapo Omidire

This is an excerpt from the World Economic Forum Report on ‘The Competitiveness of Cities’, where Lagos was used as a Case Study.

What follows is a snippet of the introduction, and what was said about Lagos.

Cities have been the engines of productivity and growth throughout history, and will be essential to the future growth and competitiveness of nations and regions. This is especially true at a time of massive and rapid urbanization in emerging markets; hence, the focus on the competitiveness of cities. In this report, six global “megatrends” especially relevant to cities are identified: (1) urbanization, demographics and the emerging middle class; (2) rising inequality; (3) sustainability; (4) technological change; (5) industrial clusters and global value chains; and (6) governance. Led by urbanization, they condition the greater operating environment for cities around the world. It is up to cities to take advantage of these megatrends, as well as to mitigate negative forces such as rising inequality, pressure on natural resources and the environment, and a diminution of trust in public authorities.

Lagos: Rationale for City Competitiveness – That’s Where the People Are

Importance of Lagos: With over 17 million people, Lagos City is one of the largest megacities in the world, having surpassed Cairo as the largest city in Africa. Some 60% of Nigeria’s commercial activities and 25% of Nigeria’s GDP come from Lagos.

Competitiveness challenges: Lagos has major hard connectivity challenges, including legendary transportation bottlenecks, cumbersome port clearance and serous power outages. Rapid rural-urban migration seems to overwhelm the ability to provide health, education, water, transportation, energy and other services. Nigeria’s challenges of corruption, personal security and terrorism also affect Lagos.

Hard and soft connectivity: Lagos has not one but two major ports, and is well connected to the outside world by air as well as maritime transportation. Impressive growth in mobile telephone usage now means that there are two mobile phones per capita in Lagos. Trade has always been important for the city, and efforts are underway to try to build more West African trade, as regional connectivity is still deficient. The new generation in Lagos seems well connected by phones, and increasingly by smartphones. “Innovation hubs” related to information, communications and technology are also springing up. The growing financial hub mentioned earlier complements the role of Lagos-based firms in what is now regarded as one of the high-growth, “frontier” emerging markets.

The lesson of Lagos for city competitiveness: Lagos City has a larger population than many countries. With almost 18 million people gathered into the city, the prospects of boosting the productivity of a large number of people and connecting them to education, health, water and sanitation services are higher than in less dense areas. The ability to lift people out of poverty by training and placing them into jobs is greater in Lagos precisely because of its density. Lagos
has enormous assets, including a huge, available labour force. The city is the principal financial center in Nigeria, with Africa’s second largest stock exchange and a wide range of financial services, including venture capital. Few places offer the opportunity to make a greater impact on the productivity and competitiveness of more people.

What to reform: Fiscal management has played a key role in reform, and Lagos’ revenues are said to have grown threefold since 2007. Judicial reforms are underway, and some progress has been made to support an arbitration center for the region. At the Lagos state government level, there is a crackdown on corruption scandals and local level bribes. The Alternative Dispute Resolution Centre and Citizens Mediation Centre (CMC) have provided some relief for citizens. The Lagos Innovation Advisory Council, including both public- and private-sector members, drives this effort. It has also established the Research & Development Fund to support innovations. Saturday service has begun to be offered by some key government agencies, which has enhanced the responsiveness of Lagos public service to the needs of residents. Violent crimes have declined by over 80% since 2007 due to the Security Trust Fund, where public and private organizations/individuals contribute for police funding. Alternative Dispute Resolution has also been on the ascendancy in Lagos. In 2013, the CMC handled 7,186 cases. Lagos enacted an arbitration law in 2009, which has seen the establishment of a private sector- led Lagos Court of Arbitration. Some $20 billion from the state government has helped to improve infrastructure, such as seven functional and specialized mother and child hospitals, each with 100-110 beds.

WEF Blog

The Competitiveness of Cities – World Economic Forum

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