By Ayo Akinfe
I expect whoever is planning to take over the governing of Lagos State to have drafted ambitious plans to convert Lagos Island into a global financial centre. Lagos is already unique in Nigeria — the only state that can survive without federal allocation or crude oil receipts. Yet, for all its dynamism, it is still nowhere near the likes of New York, Tokyo, London, Frankfurt, Kuala Lumpur, or São Paulo.Lagos currently accounts for about 50% of Nigeria’s GDP, with an economy valued at around $270 billion. As far back as 2015, its internally generated revenue stood at $1.3 billion — three times more than the next state and 39% of Nigeria’s total.
This is a strong foundation, but we must build on it. Compare this with Tokyo’s GDP of $1.6 trillion or New York’s $1.4 trillion, and the gap becomes clear. In those cities, capital is raised through financial districts, with strict due diligence. In Nigeria, oil receipts have bred carelessness, leading to abandoned projects after millions have been wasted.One radical step would be to pass a Lagos State Financial Act capping loan interest rates at 5%. Nigerian banks currently charge up to 25%, stifling growth. A cap would spur unprecedented socio-economic development. Imagine state governments across Nigeria coming to Lagos for loans — Cross River to dredge Calabar port, Niger to open cattle ranches, or Mambilla to establish wildlife reserves.
This would force proper planning and accountability, as repayment schedules would be mandatory.Such a system would also curb corruption. Unlike public funds, private sector loans cannot be stolen without consequence. Banks would pursue repayment through every court in the land. Kuala Lumpur offers a model: its economy grows at 7% annually, compared to Malaysia’s 5%, and between 2010 and 2019, it attracted $37 billion in foreign direct investment each year. São Paulo adopted a similar approach, investing heavily in municipalities and tackling social crises like street children — comparable to Nigeria’s almajiri problem.
Nigeria’s current economic policies, as Arthur Scargill once said, resemble “Economics of the mad house.” Why indebt ourselves to the IMF, World Bank, or Chinese banks when we can build our own financial centre offering loans at sustainable rates? As part of this radical rebirth, heavy industries should move to neighbouring states, while Lagos metamorphoses into a financial hub. This would also ease the strain of Lagos’s 22 million residents. The first capital project under this programme should be the Lagos Underground Metro Network, laying the foundation for a modern, efficient metropolis.Lagos has the potential to lead Africa as a financial powerhouse. The question is whether our leaders have the courage to make it happen.
📧 ayoakinfe@gmail.com
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