July 20, (THEWILL) – There are concerns that Nigeria’s deepening revenue challenge may escalate into a financial implosion, with the 36 states and the Federal Capital Territory (sub-nationals), being the worst hit. The situation is aggravated by the nation’s escalating public debt stock (standing at N33.107 trillion as of March 31, 2021), consuming a huge amount of money for debt servicing. The debt stock comprises domestic and external loan obligations of the Federal Government and the sub-nationals.
With over 70 percent of the nation’s revenue committed to debt servicing annually, governments at all levels are struggling to survive. There is little left for capital budget, pay salaries and undertake other priorities to grow the economy. Moreover, there is a limit to which the people and corporates could be taxed. Yet, profligacy takes the centre of our governance space while frugality assumes the back seat.
As such, the sub-nationals are hemorrhaging huge resources in paying salaries and other emoluments of a bloated bureaucracy. To survive, they are urged to diversify their resource base, embark on aggressive internally generated revenue (IGR) and depend less on shrinking federal allocations.
The purpose of the State of the States project, is to present evidence-based alternatives. These include avenues for the sub-nationals to become more viable and less dependent on the proceeds of the Federal Accounts Allocation Committee (FAAC) – referred to as Abuja handout, in unpopular parlance.
State of the States, a bi-weekly publication, will periscope two states per edition. It endeavours to unearth hidden treasures in each state and ascertain, through consultations and evidence-based survey, areas of competitive advantage. The publication will show-case, in no exaggerated terms, the socio-economic status of each state and highlights the opportunities and threats.
Furthermore, State of the States will examine existing realities that hinge on sector-specific competitive advantage – Agriculture, Tourism, Transportation, Education & Skill Acquisition, Wellbeing and MSMEs. Ultimately, the project seeks to create the desired spotlight on the sub-nationals to motivate them into something different for better results.
State of the States debuts with Lagos and Ogun.
Created in 1967, Lagos has metamorphosed into a humongous business and commercial hub competing evenly with the economies of some independent African states. About 20 years ago, it was physically relieved of the status of Nigeria’s capital which it bore till December 12, 1992 when the seat of government actually relocated to Abuja.
Lagos remains the heartbeat of the nation’s economy and the largest contributor (33.1 percent) to the nation’s GDP. It maintains a strong backbone in industry and commerce and is the largest economy in the South-West, the South and the entire country. It controls the coastal advantage of the entire South-West. With the smallest land mass in the country, it is the most densely populated after Kano and reaps bountifully from its lucrative borders and strategic coastline.
FACTS-FILE OF LAGOS
▪ Has one of Africa’s busiest ports; handles about 80% of the nation’s imports.
▪ The revised UN World Urbanization Prospects estimates Lagos 2021 population at 14,862,111; this is additional 493,779 representing 3.44 percent growth over 41,368,332 in 2015 – one of the fastest in the world.
▪ It’s Africa’s most populated city; the only African city in the List of “The World’s 10 Most Populated Cities” and the 4th most populated city globally.
▪ Population projected to hit 32.6 million by 2025
▪ It has the third highest number of millionaires in Africa (after Johannesburg and Cairo) and is home to about 130 individuals of ultra-high net-worth of over $30 million of net assets excluding their private residence.
▪ It has a total of 1,001 primary schools, 339 Junior Secondary Schools and 319 Senior Secondary schools.
▪ Population of primary school pupils is estimated at 430,000.
▪ There are over 18,500 private schools in
▪ Over 200,000 vehicles are registered in Lagos annually.
▪ Lagos state leads the country in the percentage of vehicular movement accounting for 30% of all Nigerian traffic
▪ It generates 25% of Nigeria’s total gross domestic product and represents an excellent example of what is possible when the government offers energy and other initiatives to its residents.
▪ The 2021 budget is N1.15 trillion – the highest among the sub-nationals.
▪ Over 6,000 companies operate in the state, hosting most of the nation’s MSMEs
▪ Total Revenue N534.93 bn (@2020)
▪ Total FAAC N115.94 bn (21.57% of Total Revenue)
▪ TOTAL IGR N418.99 bn (78.33% of Total Revenue)
▪ Domestic Debt N508.78 bn
▪ External Debt $1.4bn
▪ Agricultural output N20 billion (@ 2017)
▪ N8 trillion non-oil industrial base
▪ Service Output N29.7 trillion
▪ Gross State Output N37.6 trillion or 33.1 percent of Nigeria’s GDP in 2017
▪ Life expectancy: 50 years
- Drives economic and developmental strides of South-West
ENDOWNMENT AND INVESTMENT OPPORTUNITIES
Lagos’s most strategic endowments are its Atlantic coastline and large population. Experts describe this as a status that confers unique competitive and comparative advantage to the state; but which has not been adequately harnessed.
Dr Muda Yusuf, immediate past Director-General, Lagos Chamber of Commerce & Industry (LCCI) told THEWILL in an exclusive interview that Lagos has lots of untapped opportunities as a coastal city with a large population.
“There are huge investment opportunities in Lagos that have not been tapped. Lagos is an aquatic state; there is a lot of water. We need to see a lot more private investments in water transportation. There is a huge opportunity there. As a coastal city, a lot more can happen around the maritime sector taking advantage of water. There are opportunities around trawling, fishing and water transport. Lagos should be a fishing hub.
“We have some agricultural beds in areas like Badagry with lots of coconuts. We need to see a lot more of processing than what is going on there at the moment. The population is huge; food processing is a key area of investment because people have to feed. There should be storage facilities to feed a population of about 20 million; instead of allowing perishable items like tomatoes to rot away. Go to Mile-12 market and see things that can feed the population rot away.
“The huge population also creates opportunity for healthcare. Rather than going abroad for treatment, there should be opportunity for excellent healthcare facilities in the state. The population is there, the purchasing power is there. There is a whole lot that we can still do in Lagos.”