Speeches

4th Chief Babatunde Olusola Benson (SAN) Lecture

Nov 26, 2008 - Introduction
In four short years, the B.O. Benson Lectures have come to symbolize the vigorous social consciousness of the Ikorodu Bar and, perhaps more importantly, the unique insights that Ikorodu always has to offer towards the legal and economic development of Nigeria. For that reason, I consider it a privilege to have been invited to deliver the 2008 lecture. In a rather interesting way, the topic you have chosen – “Lagos Megacity Project – Issues and Challenges” captures the essence of our current efforts in the administration of Lagos State. It also creates a fresh opportunity for all of us to contextualize our challenges so as to better refine our strategies.

The concept of Megacities was first put forward in the 1950s by the French geographer Jean Gottman (1915-94) to describe the metropolitan area from Boston to Washington. Since then, it has become a term commonly used for any urban agglomeration with a population in excess of ten million. A Megacity is also defined by its location in the national scheme of things, i.e., its impact on socio economic life and overall development of its home country. As of 2006, UN-Habitat considered Lagos the 6th global megacity and the fastest growing in that category. Considering her rate of population growth, our State is expected to rise to 3rd place by the year 2015 with a projected population of 24.5 million.

In general, Megacities are characterized by their rapid growth, population density, formal and informal economics, as well as poverty, crime, and high levels of social fragmentation. However, emerging trends have facilitated a dual classification. Megacities of the developed world are exemplified by relatively high public revenue, modern infrastructural facilities; an urban population with efficient social services, reasonably high standards of living and more pleasant scenery. Generally well planned and laid out, these developed megacities are the hub of commercial and political activities in their respective countries. Examples include New York and Los Angeles in the USA, Seoul in South Korea, Tokyo in Japan, Paris in France and London in the U.K.

On the other hand, Megacities in developing countries are often characterized by creeping disintegration and segregation of the urban population, slums and high streets in close proximity, power, water and, sometimes, food shortages, ineffective control of traffic and human congestion, environmental pollution and attendant health hazards, high crime rate, haphazard building layout, low aesthetics and greenery, and a general absence of social security and public safety. In this category, we have shared space with Dhaka in Bangladesh, Lahore and Karachi in Pakistan, Bangkok in Thailand, Mumbai (then Bombay) in India, etc, but the great news is that we are pulling out.

Lagos State currently boasts a population figure in excess of 18 million. It is estimated that over 50,000 new residents come into the State on a monthly basis, seeking “greener pastures”. This rapid growth places an enormous strain on social and economic infrastructure, such as road traffic, environmental sanitation, housing, education and health. At the last count, population density in Lagos State is 20,000 per sq. km. while vehicular density is 222 per sq. km. Compared with the national average of 1,308 persons per sq km and 11 vehicles per sq km respectively, the Lagos Megacity poses a challenge far exceeding that of any State in Nigeria.

In its 2006 Report, the Presidential Committee on Redevelopment of the Lagos Mega-City Region described the Lagos Megacity Region as the continuous, built up area of Lagos from the Atlantic Coast spreading eastwards, westwards and northwards beyond the boundaries of Lagos into Ogun State. The Megacity Region is thus a continuously expanding area comprising for the moment all or part of the 57 local government councils and development areas of Lagos State as well as at least four local government areas of Ogun State, notably Ado-Odo/Ota, Ifo, Obafemi Owode and Sagamu. Thus, the Lagos Megacity Region is not geographically restricted to Lagos State. It also spills over into neighbouring Ogun State.

There is no doubt that the essential characteristics of the Lagos megacity pose some unique challenges. However, the essence of government is to bring about positive changes in the life of the citizenry. My believe, and indeed the very firm believe of the current administration, is that we can overcome these challenges and, in spite of everything, make Lagos a safe, clean, orderly, business-friendly and beautiful place worthy of the most discerning citizens of the world.

When you look at it carefully, I’m sure you too will find that our opportunities are contained in our challenges: The biggest market in this part of the world, a vibrant, hardworking, ingenious and adaptable citizenry, large scale business activities at our air and sea ports, natural aquatic splendour, productive land, abundant water resources, etc, etc.

The ultimate goal of our administration is therefore to develop the Lagos Megacity, aiming for the highest standards of infrastructure, educational and health services, safety and security, cleanliness and aesthetics to be found anywhere in the world. We are committed to reengineer and build a livable Megacity where economic productivity, social equity and environmental diversity will be the norm. Above all, we shall make the Lagos Megacity a place where development will be carried on with the people in mind.

There are, of course, many constraints and challenges on the way. These may be characterized as legal, constitutional, economic, social, regulatory, and institutional in nature. Some are even so subtle as to defy characterization. We shall now attempt to identify these challenges, after which we shall examine initiatives evolved by the Lagos State Government for dealing with them.

The Funding Challenge
Many things go into the building of a modern state, but one essential requirement, without which others cannot work, is funding. Over the next two decades, it is projected that Lagos State must spend at least US$2 billion on the expansion and modernization of its water supply network. In the shorter term, the State is also expected to commit no less than US$715 million over a five year period to provide qualitative and efficient road network. Among several others, there is also the crucial challenge of uplifting the quality of life our people in blighted areas of the State. This redevelopment venture will gulp no less than US$ 185 million in the next 15 years.

In recent times, Lagos State Government has reduced its dependency on federal allocation by striving to raise up to 80% of its revenues internally. This unprecedented feat enabled us to present for year 2008 an audacious budget of N403 billion. But, in spite of that, our public revenues are still far below what we require to properly fund a city of 18 million people. As against our budget of 3.4 billion US dollars, New York, with a population of 19.3 million has a budget of 52.2 billion US dollars. Johannesburg in South Africa has a population barely more than a quarter of ours, but it has a budget of 6.1 billion US dollars, almost double that of Lagos State.

Taxation is of course the only sustainable source of government revenues. The extent to which any Government can tap from this ample source is normally related to the natural and economic opportunities available within its territory, the level of business activities hosted by the government, the level of wealth created by the citizens and the value of their properties under the government’s protection.

However, the Nigerian system is structured in such a way that these characteristics do not necessarily reflect in the public revenue of a State. For instance, all incorporated companies (of which Lagos State has about 60% operating locally) pay their income tax to the Federal Government and no special consideration is given to the host State and Local Government Councils when allocations are made from the Federation Account. Similarly, in spite of the damaging effect of the sea and air port activities hosted by Lagos State, no part of the port revenues is set aside for the State Government.

Even in these circumstances, consumption taxes (which are neither on the Exclusive Legislative List nor on the Concurrent list) would have offered an ideal succour. Returns from consumption taxes are a direct reflection of the level of economic activities within the local economy and they are the best way of ensuring the appropriate flexibility of public revenues, especially as the economy expands. However, what we have in Nigeria today is a Federal Value Added Tax Act inherited from the military and maintained in spite of the 1999 Constitution. This means that as we make progress in establishing Lagos as a safe and conducive hub of commercial activities in Africa, the Government and people of Lagos State cannot directly benefit, by way of sales taxation, from the growth of intra State commercial activities. We have since challenged this anomaly at the Supreme Court and we eagerly await its reversal.

Talking about public revenue, another obvious inhibiting factor is in the fact that a majority of our people have still not imbibed the culture of paying their taxes as and when due. In the past, salary earners bore the brunt of tax payments because they had no choice in the matter. Professionals (including lawyers), artisans, traders, etc only paid when they were required to produce a tax clearance card for one purpose or the other. Apart from being an inequitable system, this is one of the things that limit government’s ability and retard the growth of our economy.

We have therefore taken on the challenge of raising awareness on the crucial importance of taxes, bringing the informal sector into the income tax net and strengthening our tax administration and monitoring capacity. These efforts are beginning to yield noticeable results but we are still far from the destination point. Many professionals and other income earners (I am sure some are here) are still to be converted. As a last resort, before the embarrassment of criminal prosecution, we now offer you free consultancy services to help you regularise your position and assume your civic responsibility as a good resident of Lagos State. I hope that by the end of this year, no lawyer in the Ikorodu Bar will be left behind.

The Public Private Partnership Funding Option
One of the ways in which we are dealing with the funding gap is by partnering with the private sector through adoption of the Public Private Partnership (PPP) option. This is a devise favoured by even the developed economies of the world. The Lagos State Government enacted the first law on PPP in Nigeria, the Lagos State Roads, Bridges and Infrastructure (Private Sector Participation) Development Board Law (PSP Law) in 2005. We have since refined this legal framework and we are encouraged by the responses that we have received from the private sector.

We have already started exploring PPP through various Build, Operate and Transfer (BOT) proposals, including the one with Lekki Concession Company (LCC) on the ongoing redevelopment of Lekki-Epe road. Implementation has already commenced on this project and it offers an exciting foretaste of the potentials of PPP for the revolutionary transformation of infrastructural landscape of Lagos State. It is the first private sector funded tolled road investment in Sub- Saharan Africa. We are currently completing the design stage of another such project for the construction of a fourth mainland bridge to Ikorodu.

Other Megacity Challenges
The legal challenges encountered in governing the Lagos Megacity are mainly constitutional in nature. For any reform to endure, it must be backed by laws. Unfortunately, as things stand today, the transformation of the Lagos Megacity requires reforms and initiatives that are beyond the current legislative purview of the State government. However, other challenges arise from the sheer characteristics of megacities as outlined above. Because of time constraints, I will discuss only a few of these issues today.

Public Safety and Security
Without adequate security the economy cannot maintain a steady growth. Indeed, business activities are bound to falter. Foreign investors will be scared away and standard of living will fall gradually. On the other hand, a secure environment attracts business, generates employment and enhances the people’s standard of living. In Nigeria, the mechanism and instrument of the State for the assurance of safety, law and order, i.e., the police, is the exclusive responsibility of the Federal Government. Section 214 of the Constitution and item 45 of the Exclusive Legislative List make that quite clear.

Apart from the well known shortcomings of the Nigeria Police Force, the actual number of officers provided by the Federal Government for Lagos is grossly inadequate. As pointed out by the Presidential Committee on the Lagos Megacity, Lagos State requires, for effective policing, fifteen Area Commands instead of the eight it now has; and one hundred (100) Police Divisions instead of the eighty-three (83) on ground. Thus, while we are constitutionally prevented from setting up formal security institutions, the one provided for us by the federal government is grossly inadequate, ineffective, ill equipped and low in morale.

In view of the grave threat that growing crime rates would inevitably pose to all our efforts, we were compelled to find ways of improving the efficacy of the police force in Lagos State, even though we are not funded for that purpose and we have no control on the operational deployment of the force. Through the Lagos State Security Trust Fund and the cooperation of our friends in the private sector, we have sourced billions of naira which has helped to pay for arms, bullet prove vests, motor vehicles and other equipment as well as personal insurance and extra allowances for policemen in Lagos State.

Law and Order
The law and order challenge is seriously heightened in megacities. The higher the population density, the more difficult it becomes to keep people in check. When common social disorder crimes are allowed to go unchecked, it creates a conducive atmosphere for festering more serious violent crimes. We are convinced that no meaningful economic and social progress can take place in an atmosphere of lawlessness and disorder. This philosophy underlies the law and order agenda of our administration. The idea is to create an orderly society where the citizenry obeys basic rules and regulations.

Court Reforms and Alternative Dispute Resolution
Our law and order agenda covers a series of systematic activities designed to ensure better security of lives and property and prompt prosecution of common offences. In furtherance of this initiative, we have prosecuted motorists driving against the normal flow of traffic (one-way driving) and other social disorder conducts. We have also embarked on an education campaign for members of the general public about common law and order offences with a view to changing public attitude towards these offences.

To complement these efforts we have carried our much appreciated judicial reforms to the magistrate courts while, at the same time, looking for ways to promote alternative dispute resolution in Lagos State. Because of its advantages over litigation, foreign investors now look for jurisdictions which have mechanisms for speedy and timely resolution of commercial and trade disputes to invest in. Lagos undeniably is the commercial capital of Nigeria and a sub-national economy. Consequently, the present administration is desirous of making Lagos State the hub of speedy resolution of commercial and trade disputes in the West Africa sub-region to enhance the economic growth and prosperity of the Megacity. A Committee on the Reform of Arbitration Law and Procedure recently submitted a report and recommended the reform of arbitration law and procedure in Lagos State. The recommendation has been approved by the Lagos State Executive Council and a Bill on the Lagos State Arbitration Law is before the Lagos State House of Assembly.

There is also a plan to establish the Lagos Centre for Domestic Arbitration designed to make Lagos the capital of arbitration in Nigeria and the West African Sub-Region. It is hoped that the initiatives to reform arbitration law and procedure will yield dividends in inflow of foreign investment and also encourage domestic investors.

Electric Power
Another big challenge in the development of the Lagos Megacity is electricity generation. No Megacity can function effectively without electricity. Apart from the day to day requirements of individuals, families and businesses, our street lights, traffic lights, public water supply, telecommunication networks, civil service apparatus and many more depend on it. At the moment, we make do with generators, but these machines are expensive to run, unreliable, nasty to our environment and hazardous to health. However, we are again constrained in responding to this appalling situation because it is also within the exclusive legislative competence of the National Assembly. We can only intervene directly in rural areas which may not be covered by the national grid.

An attempt by Lagos State to provide a solution through the Enron (now AES) Independent Power Project met with considerable opposition from the then Federal Authorities. The plans that we had to grow that project are now frustrated and it is currently functioning at great cost to Lagos State, even as we are denied the direct benefit of its output. We can only hope that with the gradual liberalization of the power sector under the Electric Power Sector Reform Act 2005, independent power generation initiatives will receive more favourable treatment and thus assist to ease the power problem. We remain undaunted, in spite of the AES experience and we are currently testing the waters again with a public-private partnership project, involving Oando Plc, for the construction of an electric power generating station for Iju Water Works.

Transportation
Transportation is another major challenge of megacities. The population of Lagos State, coupled with its status as Nigeria’s economic capital, has resulted in an incredible high rate of human and vehicular movements within the metropolis. To resolve the attendant problems and tap into the opportunities, we have adopted a long term and multifaceted approach. The Bus Rapid Transit system which was adopted by the last administration was successfully concluded and launched on 17th May 2008 with 100 buses.

Due to increasing demands, the number of buses was increased to 170 soon after commencement of operation. Apart from offering investment opportunities to transporters who came in as partners in the scheme, BRT has brought employment to hundreds of Lagosians, as well as safety, comfort and peace of mind to millions of commuters who use it. The BRT buses moved about 11 million passengers within three months of operation. The multiplier effect on the economy is very clear for us all to see. I am much elated by the success of the scheme and the State Executive Council is currently looking into ways of improving and expanding its scope.

As a complement to the BRT system, the task of ensuring sanity on our roads is also engaging our attention. We fully realize the need to strengthen the operations of Lagos State Traffic Management Authority and further empower it to ensure free flow of traffic on Lagos roads. The Road Traffic (Amendment) Law 2008 has been enacted to increase the penalties for certain Road Traffic offences. The Lagos State Traffic Management Authority (Amendment) Law 2008 was also enacted to establish the Special Traffic Mayor cadre as a non-uniformed volunteer Traffic Corp to assist Law Enforcement Agents in the arduous task of ensuring sanity on our roads. Complemented with the establishment of modern training institutes for drivers, these initiatives are designed to engender a proper diving culture in Lagos State, deter contraventions and punish persons who violate road traffic laws.

We are also exploring the option of developing other modes of transportation to create a seamless integrated inter-modal transport system. While we are currently engaged in dredging the waterways and building jetties, two private operators have already secured our concession to establish full scale water transportation systems for Lagos State in the near future. Modern terminals are being constructed at Ikorodu, Badore and Osborne and the ferry routes being dredged and channelized include Ikorodu – Badore via Oreta, Baiyeku and Ijede; and Ikorodu – Osborne.

Similarly, we are making good progress on a PPP initiative to build light rail systems in certain areas of the city to further provide succor to million of commuters. The designated points for immediate implementation are the Agbado-Iddo–Marina and Ojo/Okokomaiko to Marina routes, but there are concrete plans to expend the network to other areas of the State. We hope that when all these initiatives are completed the traffic transportation problems within the Lagos Megacity will greatly reduce.

Urban and Regional Planning
Urban and regional planning is perhaps one of the areas where we are facing the greatest challenge as a Government in dealing with the megacity status of Lagos State. Due to pressure for accommodation and the ever increasing demand resulting from a rapidly growing population, we are constantly confronted with illegal and unapproved developments. Coupled with this are the human settlement challenges posed by blighted and slum areas.

Thus far, our strategic response includes the following: (i) strengthening the monitoring and enforcement of physical planning laws and regulations; (ii) embarking on urban development polices and programmes which has resulted in a number of redevelopments - Balogun Market, Oyingbo Market, Olaleye Iponri, Oluwole - to mention just a few; (iii) Production of the Lagos State Policy Reform on Physical Planning and Building Control; and preparation of Master Plans for Development Areas like Lekki, Surulere, Apapa, Badagry, Ikorodu and Alimosho among others

The launching of the Lagos Metropolitan Development and Governance Project in November 2007 is perhaps the watershed in our commitment to upgrade blighted areas in Lagos State. The 7 year project is a World Bank (IDA) assisted intervention to upgrade 9 selected slum communities (Agege, Ajegunle, Amukoko, Badia, Iwaya, Makoko, Ilaje, Bariga, Ijeshatedo/Itire) at a cost of $200,000,000 million dollars. The project will deliver 44.8 km roads rehabilitation, 67 water boreholes, rehabilitation of 13 schools and construction of 5 schools, rehabilitation of 4 and construction of 6 health centers amongst others.

As we proceed with our plans to sanitise the physical environment, we are mindful of the fact that governmental actions and policies must be duly moderated by human rights laws and principles. While urban planning and renewal often requires us to demolish illegal structures and maintain the integrity of our road and drainage setbacks, this process requires careful planning to ensure that the fundamental rights of the affected residents are not violated and that the impact on the disruption of lives is minimized. We therefore ensure that evictions are done in accordance with both the local laws and the international human rights conventions.

Environmental Management
The Lagos State Government has responded to the challenges of environmental management in a megacity by undertaking a number of initiatives aimed at improving environmental quality on a sustainable basis. For instance, we have strengthened the process of dealing with domestic waste generated by the teeming population of the City by registering 211 Private Sector Operators (PSP), 4 Mega PSP Operators through which we have created employment opportunities for over 10,000 Lagosians. To give you an idea of the magnitude, a total of 2, 107,000 metric tons of waste was cleared by these PSP operators over a period of one year.

The efforts of the PSP operators is complemented by the Lagos State Waste Management Authority (LAWMA). One special function in this area is the disposal of hazardous medical waste generated by various hospitals, clinics, maternities and health centres across the State. LAWMA is the first organization to commence the collection of medical waste in Nigeria.

The Lagos State Government is investing heavily in controlling flooding by dredging channels at critical points and removing some illegal structures blocking drainages. The Government is currently involved in huge dredging projects at the following locations: (i) Construction of Gbagada/Atunrase Trapezodial Channel; (ii) Dredging of Bale/Okoya Canal, Ajegunle; and (iii) Construction of Ososa/Ifelodun/Arobadade Collector Drain, Bariga; to mention just a few.

Intergovernmental Action
The challenges confronting the Lagos Megacity has attracted the attention and concern of not only the Lagos State Government but the Federal and Ogun State Governments. This led to the setting up of a Presidential Committee on Redevelopment of Lagos Megacity Region in 2005. The Committee’s Report, submitted in April 2006, highlighted the challenges and proposed solutions to address the challenges. Intergovernmental meetings between the representatives of the Federal, Lagos and Ogun State Governments considered various options to funding redevelopment of the Lagos Megacity Region and, eventually, an ad hoc committee set up by the President Umaru Musa Yar’Adua GCFR recommended the option of funding redevelopment of the Lagos Megacity region by a grant-in-aid pursuant to section 164(1) of the Constitution through a Development and

Co-operation Agreement
Under this agreement, the Lagos State Government is expected to contribute 45%, Federal Government 40% and Ogun State Government 15% to fund projects within the Megacity Region. The Lagos State Executive Council has already accepted the committee’s recommendation, which is now awaiting the approval of the Federal Executive Council.

Conclusion
Distinguished ladies and gentlemen, these are some of the major challenges we face in building a better Lagos. On a daily basis, we continue to explore ways of overcoming our apparent limitations and finding new solutions to the attendant problems. In all these the people factor is most important. We fully recognize that without the understanding and support of Lagosians everywhere, these programmes cannot succeed. For our efforts to bear fruits and for Lagos to be a beautiful and conducive city, we need you to play your part – to pay your taxes, to keep your environment clean, to obey all laws and be orderly in conduct. We need you to appreciate and support, criticize if need be, all our initiatives so that in the end we can collectively tame the monster that plagues megacities all over the world.

Thank you.

Babatunde Raji Fashola, SAN
Governor of Lagos State