Even though the city of Lagos in Nigeria has the highest amount of debt nationally the area continues to see growth. There is a myriad of issues with the infrastructure of the city but it progresses regardless.
Lagos Nigeria’s Largest City
Lagos is currently home to 20 million citizens. By the year 2025, this number is expected to exceed 30 million. This fast-growing population has become an issue for the infrastructure of the city. Streets are crowded, the health care system is ineffective, and the people remain under threat of terrorist group Boko Haram. The city has not seen any serious attacks though the possibility remains.
However, their economy continues to improve. Key industries in the area manufacturing, transport, construction, and retail. The city has suffered the least amid a recession and its economy is stabilizing. This contrasts with other Nigerian cities and is causing more and more people to move there. This influx of potential buyers is affecting the market.
The area collects more taxes than other states which is a large portion of their annual revenue. These taxes are being used for infrastructure projects. To remedy the congested traffic flow, the city plans to implement an urban rail system. In addition, promises have been made to improve the roads.
Improvements in infrastructure are a telltale sign of progress. Additionally, expansion in the technology sector has always been correlated to an improving economy. In today’s world mathematics, science and technology are the industries which can generate the most money. Interestingly, Lagos has become a center for not only technology but entertainment.
Entertainment and Technology
A good indicator for the economic prosperity of an area is its ability to encourage the arts. Lagos is currently home to Nollywood, Nigeria’s film capital. The area produces more films per year than Hollywood. The industry regularly creates jobs for the Nigerian people as it grows. Notably, films from the area are being watched by neighboring African countries. As the industry continues to progress more and more capital is finding its way into the city.
The technology sector in the area continues to grow. Startups with a focus on technology are helping to improve the economy. The state has even begun laying down fiber-optic cable to meet the internet needs of the people. The startups are actually finding an opportunity where the government has fallen short. Often using gaps in infrastructure as new market opportunities. Companies are filling needs anywhere from public transport to even delivering blood to hospitals. Google CEO, Sundar Pichai has even visited the area and announced that Google plans to train 10 million Africans in IT skills.
Nigeria’s Debt Problem
Nigeria has a combined foreign and domestic debt of $22.08 billion and N15.63tn. Unfortunately, Lagos has the highest share of debt out of the 36 states of the federation and the Federal Capital Territory. Of the total debt, $10.88 billion is multilateral. Meanwhile, $274.98 million is bilateral (AFD).
Multilateral debt is the debt incurred by developing countries with the World Bank and International Monetary Fund, two of the largest creditors in the world. The other type, bilateral debt is only between the borrower and the lender. One of the major creditors is the Exim Bank of China which has provided $2.12 billion. Other loans come from JICA, India, and KFW. A portion of the debt, $8.80 billion is commercial.
As the area begins to stabilize their economy may take a while to take off. There is currently the potential, should the government make the right decisions, for success. With the large numbers of loans being racked up, it would make anyone cautious. The purpose of these loans is to utilize money now and improve the country. However, if policymakers make bad decisions with this capital then the people will suffer.
Lagos alone has 34.17% of the national debt. Meanwhile, cities like Edo and Kaduna hold 6.57% and 5.48% of the debt respectively. Could Lagos’s economy potentially pay off their debt in the future?