For the size of its economy, the 5th largest in Africa, Lagos State needs huge funding to provide supporting infrastructure and social services that will keep the wheel of her prosperity moving. It costs serious money to build first world environment with the amenities that make life good for the people.
Switzerland about a year ago opened an 11 billion Euro rail tunnel 17 years after the project started. California is spending $77 billion to have bullet train and that is about four years budget of the Federal Government of Nigeria in dollar terms.
I had written few times that the Nigerian Federal Government and the States, with the size of our budgets and revenue profile cannot fund real development. We will simply be satisfied with payment of salaries while we outsource to God the hope of ever getting good public schools, functional hospitals, good access roads and efficient public transportation system. The 2018 budget of Lagos State, which is the biggest in history, is N1.1 trillion (about $3 billion). What the current Lagos State budget means is that it will take 25 years to be able to pay for California bullet train. And that is spending the entire money on bullet train without doing any other thing.
For those who drive around Lagos, it is very easy to see the huge deficit in infrastructure despite the best efforts of successive government in Lagos since 1999 to tackle the challenges. Whatever progress that has happened so far can be described as a drop in the ocean.
The current Governor, Akinwumi Ambode, definitely fits into the class of leaders with “monomaniacal developmental ideology”, using the words Prof. Oladipo Adamolekun, a former World Bank regional director and renowned Public Administration scholar. This is not far-fetched from the way Ambode has focused on infrastructural renewal and expansion in almost three years in office. The investment in roads, security, education, employment generation, waste management, healthcare among others attest to the single-mindedness of the Ambode-led administration to improve living conditions in Lagos.
Lagos still has kilometres of unpaved roads, shambolic public schools, hospitals that should be upgraded, chaotic public transportation system, flooding problem among others. The state definitely needs more revenue to be able to provide service to the estimated 20million residents and expand socio-economic opportunities. Government will continue to use taxes and other levies to increase revenue. If the level of infrastructural development is not sustained for the next 20 years or more in Lagos, the city-state will be very difficult to live in.
It is in the light of the above, I feel the review of the Land Use Charge and the percentage increase of the amount payable across board is justifiable. The only option is for government to continue to borrow money from the bond market and banks to fund projects. There is a limit a government can go to accumulate debt. Any debt will be paid by future generation.
There had been a very strong push back by the vocal minority who are obviously affected by the new Land Use Charge. It is understandable. There is nowhere in the world people are happy to pay more in taxes and levies.
The government of Lagos State is obviously not unaware of the reactions of a section of the public on the reviewed land use charge law of 2001. With more openness and engagement, the government will win the argument.
Statistics should help Lagosians to understand what the state is up against and the reason why government revenue needs to be more robust. By year 2030, Lagos State is projected to become the third largest consumer market in the world with a population of 35.8 million, closely behind Tokyo and New Delhi. Expectedly, high population growth and rapid urbanisation will put infrastructure and public services under enormous pressure, especially security and waste management. Currently the state, according to its waste management agency, Lagos State Waste Management Agency, generates 13,000 metric tonnes of waste daily. The question is: are we ready? Can the government provide what is needed to make the state work for all without improve revenue? Lagos economy has grown beyond the one that will rely on the monthly federal allocation.
To be able to keep and sustain the current pace of progress, Lagos State has sought to grow its revenue base by ensuring all economic activities on Real estate gives a return to the government for the sole purpose of improving the living conditions of residents of the State.
I strongly support the Land Use Charge if Lagos must have the much needed resources to spend to make the state a liveable city-state. The government should continue to dialogue with the groups that are opposed to the new rates. Continuous engagements with the civil society and transparency are key elements to build trust in a democracy. The conversation should continue.