The Sun News

Government’s plan for rapid economic development in Lagos

Tayo Ogunbiyi

In a bid to actually put the Organized Private Sector, OPS, abreast of his administration’s economic blueprint, Lagos State Governor, Mr. Akinwunmi Ambode recently had an interactive session with captains of industry in Victoria Island, Lagos. At the session, which was tagged “Lagos Means Business”, Governor Ambode disclosed that the state would require a staggering sum of $50 billion (equivalent to N14.47 trillion) in the next five years to bridge infrastructure gap with the exclusion of education, health and housing sectors.

The Governor, therefore, proposed that an infrastructure fund be established to address the state’s huge infrastructure deficit. The fund, which is to be managed by private sector, will be similar to the Lagos State Security Trust Fund. On the decision to increase Land Use Charge, the governor revealed that it was borne out of the desire to do more than what is being done, especially with the current budget of N1.046 trillion. Governor Ambode noted that the Land Use Charge Law was enacted in 2002 with a provision for review every five years. But, it has not been reviewed for 15 years. He, however, disclosed that the state government is ready to dialogue with the OPS and other stakeholders on the Land Use Charge.

Governor Ambode further disclosed that out of its 24 million people, only eight million Lagos residents are actually taxable.  While the number of people that actually submitted tax returns in 2017 is two million, the Governor revealed that only 700,000 people paid their taxes.  The governor, therefore, submitted that the current tax returns were not sufficient to provide for the capital projects ongoing across the state, adding that major cities across the world with thriving economies are sustained by the taxes paid by residents.

Certain issues become quite perceptible at the Lagos State government’s parley with the OPS. One, the Ambode administration has a track record of judiciously expending public fund as this is reinforced by the quantum of projects currently on-going across the state in diverse sectors. So, Lagosians are rest assured that their taxes would continue to work for them in a transparent and honest manner. This much was attested to by members of the OPS.

Second, it is obvious that the state government prefers to take the route of encouraging taxable Lagosians to willingly embrace the culture of taxation rather than taking the traditional path of borrowing to fund public projects. According to Governor Ambode, “If the vision of a prosperous Lagos is to be achieved, the State must retreat from borrowing to finance its infrastructure and pay back later in the future with high interest rate.’’

Third, a proper understanding of the Land Use Charge, as broken down by the governor, shows that it is not as complex as it is being branded around.  For instance, the governor explained that pensioners, owner occupiers, NGOs, churches and Mosques are exempted from the payment of Land Use Charge. The good part of it all, according to Governor Ambode is that the State government is ready for dialogue and will welcome the complaints of dissatisfied members of the public in this regard.

Also, it becomes clear from the dialogue that the state government is passionately interested in job creation, empowerment, wealth creation and wealth redistribution. According to Governor Ambode, the guiding principle of government with regard to all on on-going projects across the state is wealth creation, especially for operators of the informal sector such as artisans, is to ensure that Lagos residents with the appropriate skills are productively engaged. “It is only in doing this that the social fabric of the society can be firmly preserved and real security guaranteed”, said the governor.  

Furthermore, members of the OPS are mostly on the same page with the state government’s plan to engender accelerated socio-economic development in the state. Indeed, most captains of industry present at the parley promised to continue to partner with the state government across all sectors.  They were particularly excited at the conducive environment being created by the state government for business to thrive in the state.

 In this respect, richest African, Alhaji Aliko Dangote, was quite emphatic in his commendation of the state government in the area of ease of doing business. He said:  “I think for people who are doing business here, Lagos is the most-friendliest States in Nigeria. If you really want to know, try other states and you will see hell”. He also advocated support for Governor Ambode’s appeal to Lagos residents and business community to continue to pay tax. “You should pay your taxes to Lagos state,” Dangote counseled.

Perhaps most importantly, it is patent from the dialogue that if nothing is urgently done to provide the much needed fund to finance Lagos infrastructure need, challenges that would confront the state in the future might be too complex and troubling. For instance, Lagos was projected to become the third largest consumer market in the world with a population of 35.8 million, closely behind Tokyo and Delhi, while the population growth and rapid urbanization would put infrastructure and public services under pressure.

But then, if the current business climate in the state is further enhanced, rather be a gloomy one, the prospect of Lagos is bright. Presently, the largest single line refinery in the world, designed to refine 650,000 barrels of crude oil daily, is being constructed at the Lekki Free Trade Zone (LFTZ) by Alhaji Aliko Dangote. This is further to the fact that Lagos, indeed, means business. The project will positively change the face of oil and gas business in the West African region.

More than ever, Lagos is now open for business.  The state government is investing massively in infrastructure which will support businesses and ultimate promote economic development.

Ogunbiyi writes from Lagos.


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