Lagos Beyond 2015: BOLD IDEAS,NEW OPPORTUNITIES

February 04, 2015

There are 3 fundamental questions to answer

2

Who am I?

What are my ideas?

Why am I in this race?

Why am I in this race?

I am in this race because ……..

4

I believe I can make a significant difference in the need to achieve a Lagos that is sustainably competitive and liveable Lagos has lost ground when compared with other mega cities

- The improvements in Lagos over the past decade-and-half could and should have resulted in a more competitive environment for business and more humane society for the people of our State – residents, indigenes and visitors

The developments ahead are likely to disadvantage Lagos and responding to them requires a clear understanding of making private effort work effectively for the community

The future can’t be about celebrating progress which doesn’t match what our comparators achieved – Lagos is not and cannot be about local comparisons. It is an international Mega City and must be compared with others

It can’t be about continuity, its all about leapfrogging change on limited resources!!

The importance of Lagos as a megacity needs to shift from being all about

population to being about competitiveness

Lagos is deservingly a hotspot city based on population, …ranks low in competitiveness

Population

Sources: 1. EIU Hotspots 2025, Becoming the future competitiveness of cities2. Oxford Economics: Global Cities 2030 Forecast Service (GDP 2012 Current Price Level)3. CBN Database – Capital Importation by Location and Type.

137th/140

EIU Liveability Index Stability, Healthcare, Culture and

environment, Education and infrastructure

Global Urban Competitiveness Index (GUCI) Reports

Economic scale, growth, efficiency, density, quality and Exterior effect

City Prosperity Index (CPI) Productivity, Infrastructure, Quality of life, equity,

environmental sustainability (0.5 shows weakest prosperity factor)

Lagos receives 98% of Nigeria’s capital importation, yet 78% is in the stock exchange (short term money) and other portfolio investments than FDIs3

548% increase in consumer spend between 2010-20302

POPULATION

EIU Hotspots 2025 Economic strength, Physical capital,

Financial maturity, Institutional character, Human capital quality, Environmental governance quality and Global appeal

DEVELOPMENT & COMPETITIVENESS

119th/120

454th/500

0.496/1

City with the world’s biggest increase in population by 20302

World’s largest entry level consumers (ages 14 and below) by 20252

Number of households in Lagos is expected to grow by 3million (four times faster than New York (by 2025) 2

We perform poorly on competitiveness and quality of life indices

Lagos is deservingly a hotspot city based on population, …ranks low in competitiveness

Population

EIU Liveability Index The Liveability index ranks 140 cities

with the best and worst living conditions. The best city is ranked 1st and the worst 140th.

Global Urban Competitiveness Index (GUCI) Reports

The GUCI ranks the economic competitiveness of 500 cities around the world. The best city is ranked 1st and the worst is 500th.

City Prosperity Index (CPI) CPI measures the present and future

progress of cities towards economic prosperity.

The CPI ranges from 0 – 1

EIU Hotspots 2025 The 2025 City Competitiveness Index

benchmarks the economic competitiveness of 120 cities across the world at two distinct points in time: 2012 and in 2025. The most competitive city is ranked 1st and the least is ranked 120th

WHAT DO THESE INDICES MEASURE?

….and the picture is even worse relative to comparative global cities

WHERE LAGOS STANDS AMONGST OTHER COMPARABLE MEGA-CITIES

Cities EIU Liveability Rankings

2014 1

EIU Hotspots 2025

Rankings 2

City Prosperity

Index 3

GUCI Rankings 2007/ 2008 4

Delhi 111/140 56/ 120 0.635 213/500

Guangzhou 90/140 NA NA 130/500

Johannesburg 91/140 66/120 0.479 224/500

Sao Paulo 91/140 36/120 0.757 201/500

Lagos 137/140 119 /120 0.496 454/500

SOURCE:1. EIU Global Liveability Rankings 20142. EIU Hot Spots 2025 Benchmarking the future competitiveness of cities3. UN HABITAT: State of the World's Cities 2012/2013 , Prosperity of Cities4. The Global Urban Competitiveness Report 2010

CPI Keys0.900 – 1 very solid prosperity factors0.800 – 0.899 solid prosperity factors – first category0.700 – 0.799 solid prosperity factors – second category 0.600 – 0.699 moderate prosperity factors 0.500 – 0.599 weak prosperity factors Below 0.500 very weak prosperity factors

Solid

Moderate

Weak

15 years &

N4.1trn later…………..

Lagos prides itself as the economic hub of Nigeria yet is unfriendly to businesses

1. STARTING A BUSINESS 2. DEALING WITH CONSTRUCTION PERMITS

3. REGISTERING PROPERTY 4. ENFORCING CONTRACTS

1 st 2

n

d 3 rd 4

th 5th

1st 2

nd

3rd 4

th 5th

FCT ABUJA

ZAMFARAKEBBI LAGOS

36th

28t

h 31s

t

OGUN

JIGAWA

SOKOTOOSUN

EKITI

NIGER

1st 2n

d 2n

d 4th 5th

1st 2n

d 3rd

5th

ZAMFARAGOMB

EKATSIN

AJIGAWA

KANO 3rd

KATSINA

KADUNAKEBBI YOBE

EDO

LAGOS

LAGOS LAGOS

Cost of dealing with construction permits increased to 3504% of income per capita (2013) from 1016% (2007)

The State declined from its position in registering a property 27th (2010)to its current position 31st (2013),

Though the time reduced from 2010 (82 to 77days ) in registering a property, 30 states are doing better than Lagos

SOURCE: World Bank Group; Doing Business in Nigeria (2008, 2010 & 2014) reports. NOTE: RANKINGS ARE AS AT 2013

World Bank: Doing Business in Nigeria 2014 compares Business Regulations for Domestic Firms in 35 States and Abuja, FCT and ranks them accordingly.

HARSH CONDITIONS

Losing our competitive advantage to Ogun State

10

SOURCE: World Bank Group; Doing Business in Nigeria (2008, 2010 & 2014) reports. NOTE: RANKINGS ARE AS AT 2013

LAGOS 4/36OGUN

5/36

LAGOS 36/36

OGUN 16/36

LAGOS 31/36

OGUN 28/36

LAGOS 28/36

OGUN 17/36

State infrastructure is struggling to keep up with the demands of a

growing population

Health Indicators2000

2014E

No of hospital beds / 1000 people 0.70 0.33

No of doctors / 1000 people 0.20 0.33

No of nurses / 1000 people 1.00 1.05

Health facilities are increasing at a slower pace than the population

SOURCE:: 1. Oxford Economics Group: Global cities 2030 forecast services: Number of hospital beds (2000 – 2014), Number of doctors( 2000 -2014), Number of nurses (2000 -2014)2. Lagos Bureau of Statistics, 2011 Digest (Population 2006 – 2014) (Population estimates for Year 2000)

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Educational outcomes in Lagos reflect insufficient levels of investment in the education sector relative to population growth

Source: Oxford Economics Group: Global cities 2030 forecast services, Lagos Population (2000 – 2005), Lagos Bureau of Statistics, 2011 Digest (Population 2006 – 2014) Note: Age 5-19 was population used as a proxy for Universal Basic Education (UBE) population from the Lagos Bureau of Statistics, 2011 Digest (Population 2006 – 2014) (Year 2000 population estimate)

Indicators 2000 2014E CAGR

UBE Eligible Population (Million) 4.03 6.72 8.16

No of primary education teachers 13,000 23,600 4.30

No of secondary education teachers 5,700 18,000 8.56

In 2014,only 45.86% of students in Lagos State passed WAEC

Indicators Primary JSS SSS

Year 09/10

10/11 09/10

10/11

09/10

10/11

Classroom student ratio

1:33 1:42 1:87 1:78 1:68 1:63

Teacher student ratio

1:28 1:30 1:34 1:35 1:26 1:28

As you all know, your businesses pay the cost of the failure of education

The State is still struggling to meet the transportation needs of a true global mega-city

Transport is predominantly road based, leading to congestion Water transportation for intra-state carriage of goods and people is under-utilized Lagos is one of the two mega cities in the world without rail based mass transit, the

other being Karachi in Pakistan The rail track right of way is currently occupied by traders, markets and

even residences

Overview

Current Transport Demand

Demand for transport services is growing faster than economic growth in Lagos Metropolitan Areas (LMA)

17.5 million Lagos residents create demand for about 10.5 million trips daily on all motorised modes

Number of passenger trips carried by BRT grew to 62 million passenger trips in 2010 from 12.5million passenger trips in 20082

Total number of buses operating in LMA is estimated to be about 83,000 Water Transportation: 117 Vessels operated by 47 providers, number of

passengers moved from 1.5 million monthly to 1.8 million between June and October 2013

Source: Transportation Master Plan by LAMATA, Urrbanrail.net: Lagos, Railway-technology.com (Project: Lagos Rail Mass Transit System, Nigeria 2

The demand for additional housing in Lagos is growing rapidly

SOURCE: Oxford Economics: Global cities 2030 forecast services1 , Lagos State Development Plan 2012-20252

Lagos state has a housing deficit in excess of 2 million units2

LSDPC has provided about 20,000 housing units since 19722

Ministry of housing has only added about 5,000 housing units in

Lagos since 19992

91,000

169,000

Businesses, such as yours, are affected directly by several issues in Lagos

Porous Security - of life, property and investment Inadequate infrastructure - Power & Transportation: Roads,

Water, Rail Rising cost of doing business in Lagos

- Multiple taxes- Illegal fees and levies- Regulation as taxation

Lack of skilled manpower - even with high unemployment levels

Emerging National Reforms may be to the disadvantage of LagosFor example - The reforms which will lead to the expansion and modernisation of national Rail network

Consequences

Individuals Move to surrounding states with lower cost of housing and living and commute to Lagos i.e. loss of income taxes and spending

Businesses can move to lower cost areas (or closer to raw materials) and send goods by rail to Lagos i.e. loss of competitive advantage as economic and business hub

Lagos cannot afford to take businesses or residents for granted!

Headwinds arising from current decline in oil prices are pointers to a tougher 2015 & 2016 for Lagos State

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Source: 1-Statista.com (Average prices for OPEC crude oil from 2000 to 2014 (in U.S. dollars per barrel) 2- 5 Year Revenue, Expenditure and Debt Profile of Lagos; Lagos State Budget 2008-2014

Drop in Federal Allocation Decline in IGR

- Business slow down may affect IGR negatively

- Declining taxable persons, as companies downsize

Exchange rate depreciation- Make dollar denominated debt - more

expensive- Importation - more expensive, thus

fewer imports- higher costs for businesses importing

raw materials- The pass through effect will cause a

rise in inflation rate

Declining Crude Oil Prices Implications for Lagos

Oil Shock

Historical antecedent (2009 Oil shock)- LASG actual IGR performance against expected declined to 76.9% (2009) from 81.8%(2008) and fell further to 75.7(2010) 2

What we need is to transform Our Lagos into a specialised economy so as to

develop new competencies and competitive advantage

What will I do?

BOLD IDEASNEW OPPORTUNITIES

We know that for us to succeed, we need a clear vision, a powerful message and ground-breaking policies

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We aim for a Lagos that embraces its position as a global mega-

city state populated by well-educated, skilled, healthy people

living in secure and prosperous environment

We strive for a Lagos that enables ‘Lagosians’ to achieve their

personal, entrepreneurial and professional aspirations, regardless

of origin, socio-economic background and gender

We will work towards a Lagos that confirms its place as a regional

hub for financial and professional services and commercial

enterprise through genuinely business-friendly reforms and

initiatives

Our government will be inclusive and will foster partnerships with

the private sector, other tiers of government, non-governmental

interest and community groups to improve access and delivery of

economic goods and services

Our Strategy to re-position Lagos as a business friendly environment

22

THEMES

SOURCE: Team analysis

• Ensure that State policies are people friendly and are always for the benefit of the people and the State.

•Sustainable development focusing on the needs of Lagos as a megacity today and the future

•Ensuring that all projects have clear, achievable goals and are monitored from inception to completion

•Citizens resources used efficiently and transparently with full accountability to the people

Value for money

Doing thins

differently and

effectively

A kinder more

humane Lagos

Build an efficient

and dynamic economy for today and the future

Diversifying the economy 1

Improving on security2

Reforming laws and taxes 3

Improving the quality of labour/Man power 4

Expanding and developing infrastructure

5

PEOPLE

The JayKay policy philosophy is based on aspiration and prosperity with clear roles and responsibilities for residents and the government

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Every resident has aspirations

Suggested improvement initiatives and potential impact

Suggested improvement initiatives and potential impact

Every resident of Lagos has aspirations regardless of Socio-economic background, educational-level, profession or status

Residents are enabled to achieve their aspirations, because the state government helps them to:

IDENTIFY opportunities ACCESS the identified opportunities BENEFIT from/Take advantage of

opportunities

The Government will clearly define and articulate its roles and responsibilities to the residents of Lagos

Residents have expectations of the government BUT there are also responsibilities flowing from residents to the government and fellow residents

The government will partner with diverse, appropriate stakeholders to deliver economic goods, services & infrastructure

Partners will include The Private sector Non-governmental organisations and

professional interest groups Local governments and wards Community and neighbourhood groups International agencies and non-

government organisations

The government will: Ensure efficient and cost-effective

provision/delivery of facilities and services the private sector will be the primary

vehicle for delivery of services and provision of facilities

In exceptional cases, provision and/or delivery will be through government agencies

Regulate, monitor and evaluate the quality of services and facilities provided

The role of the Government

We will:

Broaden our tax net by

Encouraging growth of new

businesses and new business areas

Work towards becoming an International

financial centre

Establish Industrial Clusters

Set aside 5% of the State procurement budget

for young entrepreneurs and graduates

Pass the local content legislation to enforce

10% participation of residents and small

businesses in large scale State Projects – This

will be achieved through employment, sub-

project and/or training opportunities.

Ensure Open procurement process - that is the

business of Lagos will be transparent and open

to all; faster execution and implementation

and expansion of the provisions of the Lagos

State Procurement law

A way to renewal and rapid expansionDiversifying the economy 1

Establish an Ocean economy

Tourist centre

and natural

trade location

Logistics hub

Invest in a Digital economy

One stop

Investment

centre

Epe and Ikorodu to be national fisheries hub

Exploit the geography of Badagry

Develop Epe Free Trade Zone, port and airport into a logistics hub and aerotropolis

Free Wi-Fi/Hot spots in libraries, Local Government Headquarters and other selected public places

To help new businesses fast track government approvals - educate them on government opportunities

▪ Utilize Security Trust Fund more effectively

▪ Encourage more IPPs

▪ Provide more solar powered public lighting

Tackle underlying causes of crimes (Unemployment, lack of education)

3

Establish an international

state crime lab to enhance

crime detection

Give neighbourhoods the

greater responsibility for

protecting their communities

by empowering

community/neighbourhood

watches through integration

with the state security

network

Support the State police

initiative and reforms from

the National conference

Increase the funding for primary

education;

Strengthen technical/vocational

education to provide an option

with those who are academically

challenged and encourage Local

and international certification and

standards for artisans and

technicians

Provide 100,000 vocational and

internship places annually

Attain a 65% pass in

WAEC/appropriate degrees

Rehabilitate slums to bring

succour to Lagosians

Implement our new initiatives

21Strengthen current initiatives

Lagos State needs to operate a 24-hour economy

Improving Security 2

The Security findings of the

National Crime Victimization and

Safety Survey 2013, show that 62% of Lagosians

fear becoming victims of crime

A

B

C

We will continue to encourage businesses by ensuring State laws are

fair and giving them a suitable environment to encourage investment

We will ensure that Lagos becomes business friendly and we will boost the economic activities within the State

Reforming Laws and Taxes 3

Reform and simplify the property registration process

Avoid the use of regulation as a means of taxation

Review and rationalise the list of fees taxes and levies

payable by

businesses.

Provide more funds for Primary; Ensure that education is accessible, affordable,

available and of high quality

Our children will leave the education system with industry-demanded skills and

qualifications

Strengthen the inspectorate division for public and private schools to ensure high

standards – so we can raise the success rate in WAEC

Public School Education

Youth Empowerment

Establish an IT-based job matching recruitment system and portal,

incorporating pre-employment screening, retraining and remedial

programmes and real job opportunities and placements

Offer Re-training opportunities – match industry needs to skills development

Technical and Vocational Education

Provide 100,000 vocational and internship places annually

Encourage skill acquisition through informal apprenticeship/vocational

education

Set local and international certification/standards for artisans and technicians

Our Labour force has to be ready to be able to compete internationallyImproving the quality of labour/Man power 4

Review and accelerate implementation of the Transportation Master Plan to create an integrated Multi-modal mass-transit system

Engagement in PPPs to allow greater regulated private sector participation in road mass transportation

Revisit the framework for private participation in the light-rail system, incorporation of different companies for different lines and for maintenance; resolution of right-of-way issues with the Federal Government through constructive dialogue and partnership

Re-activate and expand the utilisation of Lagos‟ extensive inland waterways for transportation of goods and people; enforce safety standards to avoid accidents

Transportation

Health

Working with the Private Sector, we will deliver 150,000 housing units by 2018 through fostering partnerships with the private sector and promoting sustainable and effective building methods

Provide Land and partner with developers Promote industrial scale building methods Reduce the cost of land and registration title ( the cost and time of

government bureaucracy) Review and reform property registration and title process

Housing

Universal Health Coverage - Eko Contributory Health Insurance Scheme, open to all residents of Lagos State

mobile and community-based micro-clinics in all LGAs and LCDAs, especially rural areas

Eko Medical City (health tourism resort)

Expanding and developing infrastructure 5

We need to create an enabling environment for businesses

29

Cost Recovery

PLANNED ACTION

Public-Private Partnerships

Greater Efficiency of tax

Capital Markets

Co financing

STRATEGY

We believe that as the economy expands, the revenue base will also broaden

Reduce Leakages

Constructive engagement with the Federal government on cost recovery

Creatively design projects within our programme to ensure they are viable and attractive to the private Sector

Encourage schemes with matching contributions from the Federal Government of Nigeria

Seek resources in form of grants from donor agencies and international funding sources – World Bank Grants, Non-Multilateral Agency grants etc.

Streamline the heads and points of taxation so as to encourage more voluntary compliance

Invest in technology to widen tax coverage and improve efficiency to reduce leakages

Use the instrumentality of financial markets and expert advice to restructure existing debts

Where appropriate, continue to use capital market resources and the securitisation of cash flow from assets for development

Initiatives that mean citizens will pay even minimal contributions to services such as health (micro-insurance) in the medium term

We believe there are significant leakages in the system and the savings from reducing these leakages will fund some of our projects

Certain projects will be prioritised ahead of others, based on expected impact

Prioritise projects

Who am I?

Who am I?

Member of the “Concerned Professionals”

Member, Save Nigeria Group (SNG)

Founder, Jimi Agbaje Outreach Trustee, Nigerian Infection

Control Association (NICA). Patron, Catholic Youth

Organisation of Nigeria (CYON) Archdiocese of Lagos

Faculty Member, African Centre of Leadership, Strategy and Development

Awardee the National Honour of the Order of The Niger (OON) for his contribution to the Pharmacy Profession & Politics

PDP gubernatorial candidate for Lagos State

Lagos State gubernatorial candidate of the Democratic Peoples’ Alliance Party in 2011

Former Treasurer and Secretary of the Socio-Political Movement Afenifere Group

Lagos Coordinator of the Afenifere Renewal Group (ARG)

The Managing Director of Jaykay Pharmaceutical & Chemical Company Ltd.

- Nationwide manufacturer and distributor of pharmaceuticals

Board Member, Vigeo Holdings Ltd

Board Member, Oakwood Park Ltd

Vice Chairman, Atlantic Hall School

Former National Chairman, Nigerian Association of General Practice Pharmacists

Former Chairman, Lagos State Pharmaceutical Society of Nigeria

Committee Member, Lagos State Task Force on Fake & Adulterated Drugs

Fellow, Pharmaceutical Society of Nigeria

Fellow, West African Post Graduate College of Pharmacy

Fellow, Nigerian Academy of Pharmacy

A Politician

A Social Activist

A Pharmacist, entrepreneur & investor