Mr. Olujimi Agbaje`s Presentation - February 2015

Report
Lagos Beyond 2015:
BOLD IDEAS,
NEW OPPORTUNITIES
February 04, 2015
There are 3 fundamental questions to answer
Why am I in this race?
What are my ideas?
Who am I?
1
Why am I in this race?
I am in this race because ……..
 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!!
3
The importance of Lagos as a megacity
needs to shift from being all about
population to being about
competitiveness
is deservingly a hotspot city based on population, …ranks low in competitiveness
We performLagos
poorly
on competitiveness and quality of life indices
POPULATION



DEVELOPMENT & COMPETITIVENESS

City with the world’s biggest
increase in population by 20302

World’s largest entry level consumers
(ages 14 and below) by 20252


548% increase in consumer spend
between 2010-20302

Number of households in Lagos is
expected to grow by 3million (four
times faster than New York (by 2025) 2


119th/120
Economic strength, Physical capital,
Financial maturity, Institutional character,
Human capital quality, Environmental
governance quality and Global appeal
EIU Liveability Index
Stability, Healthcare, Culture and
environment, Education and
infrastructure
137th/140
Global Urban Competitiveness Index
(GUCI) Reports


EIU Hotspots 2025
Economic scale, growth, efficiency,
density, quality and Exterior effect
454th/500
City Prosperity Index (CPI)

Productivity, Infrastructure, Quality of life, equity,
environmental sustainability
 (0.5 shows weakest prosperity factor)
0.496/1
Lagos receives 98% of Nigeria’s capital importation, yet 78% is in the stock exchange (short term
money) and other portfolio investments than FDIs3
Sources:
1. EIU Hotspots 2025, Becoming the future competitiveness of cities
2. Oxford Economics: Global Cities 2030 Forecast Service (GDP 2012 Current Price Level)
3. CBN Database – Capital Importation by Location and Type.
Lagos is deservingly a hotspot city based on population, …ranks low in competitiveness
….and the picture is even worse relative to comparative global cities
WHAT DO THESE INDICES
MEASURE?

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.

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

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
SOURCE:
1.
EIU Global Liveability Rankings 2014
2.
EIU Hot Spots 2025 Benchmarking the future competitiveness of cities
3.
UN HABITAT: State of the World's Cities 2012/2013 , Prosperity of Cities
4.
The Global Urban Competitiveness Report 2010
WHERE LAGOS STANDS AMONGST OTHER COMPARABLE
MEGA-CITIES
Cities
Delhi
EIU
Liveability
Rankings
2014 1
111/140
EIU Hotspots
2025
Rankings 2
City
Prosperity
Index 3
GUCI Rankings
2007/ 2008 4
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
119 /120
0.496
454/500
Lagos
137/140
CPI Keys
0.900 – 1 very solid prosperity factors
0.800 – 0.899 solid prosperity factors – first category
0.700 – 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
FCT
ABUJA
JIGAWA
ZAMFARA
1
st
2
nd
SOKOTO
KEBBI
3
rd
1
LAGOS
st
4
th
OGUN
OSUN
2
nd
EKITI
3
rd
5
4
NIGER
th
5
th
th
3. REGISTERING PROPERTY
LAGOS
36th
4. ENFORCING CONTRACTS
KATSINA
ZAMFARA
GOMBE
KATSINA
KADUNA
JIGAWA
1st
2
nd
2
nd
KEBBI
YOBE
3rd
3rd
1st
KANO
LAGOS
5th
31st
4th
2nd
EDO
LAGOS
5th
28th
World Bank: Doing Business in Nigeria 2014 compares Business Regulations for Domestic Firms in 35
States and Abuja, FCT and ranks them accordingly.
SOURCE: World Bank Group; Doing Business in Nigeria (2008, 2010 & 2014) reports. NOTE: RANKINGS ARE AS AT 2013
HARSH CONDITIONS
 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
Losing our competitive advantage to Ogun State
LAGOS 4/36
OGUN 5/36
LAGOS 36/36
OGUN 16/36
LAGOS 31/36
OGUN 28/36
LAGOS 28/36
OGUN 17/36
SOURCE: World Bank Group; Doing Business in Nigeria (2008, 2010 & 2014) reports. NOTE: RANKINGS ARE AS AT 2013
9
State infrastructure is struggling to
keep up with the demands of a
growing population
Health facilities are increasing at a slower pace than the population
Health Indicators
2000
2014E
No of hospital beds /
1000 people
0.70
0.33
No of doctors / 1000
people
0.20
0.33
1.00
1.05
No of nurses / 1000
people
SOURCE::
1.
2.
Oxford Economics Group: Global cities 2030 forecast services: Number of hospital beds (2000 – 2014), Number of doctors( 2000 -2014), Number of nurses (2000 -2014)
Lagos Bureau of Statistics, 2011 Digest (Population 2006 – 2014) (Population estimates for Year 2000)
Educational outcomes in Lagos reflect insufficient levels of investment in the education sector
relative to population growth
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
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
In 2014,only
45.86% of
students in
Lagos State
passed
WAEC
As you all know, your businesses pay the cost of the failure of education
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)
12
The State is still struggling to meet the transportation needs
of a true global mega-city
Overview
 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
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
169,000
91,000



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
SOURCE: Oxford Economics: Global cities 2030 forecast services1 , Lagos State Development Plan 2012-20252
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 Lagos
For 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
Declining Crude Oil Prices
Implications for Lagos


Oil
Shock

-
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
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
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
17
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 IDEAS
NEW OPPORTUNITIES
We know that for us to succeed, we need a clear vision, a powerful
message and ground-breaking policies

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, socioeconomic 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
20
Our Strategy to re-position Lagos as a business friendly environment
THEMES
• 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
PEOPLE
• Sustainable
development
focusing on the
needs of Lagos as a
megacity today and
the future
Build an
efficient and
dynamic
economy for
today and
the future
1
Diversifying the economy
2
Improving on security
3
Reforming laws and taxes
4
Improving the quality of
labour/Man power
5
Expanding and developing
infrastructure
A kinder
more
humane
Lagos
• Ensure that State
policies are people
friendly and are
always for the benefit
of the people and the
State.
SOURCE: Team analysis
21
The JayKay policy philosophy is based on aspiration and prosperity with clear
roles and responsibilities for residents and the government
Every resident has aspirations

Every resident of Lagos has aspirations regardless
of Socio-economic background, educational-level,
profession or status
 Residents are enabled to achieve their aspirations,
Suggested
and
Suggestedimprovement
improvementinitiatives
initiatives
andpotential
potential
The role
of impact
the
Government
impact

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
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

22
A way to renewal and rapid expansion
1
Diversifying the economy
Establish an
Ocean economy
 Epe and Ikorodu to be national fisheries
hub
We will:
 Broaden our tax net by
 Encouraging growth of new businesses
Tourist centre
 Exploit the geography of Badagry
and natural trade
 Work towards becoming an International financial
centre
location
Logistics hub
and new business areas
 Establish Industrial Clusters
 Develop Epe Free Trade Zone, port and
airport into a logistics hub and
aerotropolis
 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
Invest in a Digital
economy
 Free Wi-Fi/Hot spots in libraries, Local
Government Headquarters and other
selected public places
large scale State Projects – This will be achieved
through employment, sub-project and/or training
opportunities.
 Ensure Open procurement process - that is the
One stop
Investment centre
 To help new businesses fast track
government approvals - educate them on
government opportunities
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
Lagos State needs to operate a 24-hour economy
2
1
Improving Security
Strengthen
current initiatives
▪ Utilize Security Trust Fund
more effectively
2

Implement our
new initiatives
Establish an international state
crime lab to enhance crime
▪ Encourage more IPPs
▪ Provide more solar
powered public lighting
The Security findings
of the National Crime
Victimization and
Safety Survey 2013,
show that 62% of
Lagosians fear
becoming victims of
crime
detection

 Increase the funding for primary
education;
 Strengthen technical/vocational
Give neighbourhoods the greater
education to provide an option with
responsibility for protecting their
those who are academically challenged
communities by empowering
and encourage Local and international
community/neighbourhood
certification and standards for artisans
watches through integration with
and technicians
the state security network

Tackle underlying causes of
3 crimes (Unemployment, lack
of education)
Support the State police initiative
and reforms from the National
conference
 Provide 100,000 vocational and
internship places annually
 Attain a 65% pass in
WAEC/appropriate degrees
 Rehabilitate slums to bring succour to
Lagosians
We will ensure that Lagos becomes business friendly and we will boost the
economic activities within the State
3
Reforming Laws and Taxes
We will continue to encourage businesses by ensuring State laws are fair and giving
them a suitable environment to encourage investment
A
B
C
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.
Our Labour force has to be ready to be able to compete internationally
4
Improving the quality of labour/Man power

Provide more funds for Primary; Ensure that education is accessible, affordable,
available and of high quality
Public School
Education

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
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

Establish an IT-based job matching recruitment system and portal,
incorporating pre-employment screening, retraining and remedial
Youth
Empowerment
programmes and real job opportunities and placements

Offer Re-training opportunities – match industry needs to skills development
We need to create an enabling environment for businesses
5
Expanding and developing infrastructure
Transportation
Health
Housing
 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
 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)
 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
We believe that as the economy expands, the revenue base will also broaden
STRATEGY
Cost Recovery
Public-Private
Partnerships
Greater Efficiency
of tax
Capital Markets
PLANNED ACTION
 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
Co financing
 Initiatives that mean citizens will pay even minimal contributions to services such as health
(micro-insurance) in the medium term
Reduce Leakages
 We believe there are significant leakages in the system and the savings from reducing these
leakages will fund some of our projects
Prioritise projects
 Certain projects will be prioritised ahead of others, based on expected impact
28
Who am I?
Who am I?
A Pharmacist, entrepreneur &
investor
A Social Activist
 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
A Politician
 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

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