Economic opportunities and challenges in Lagos

Economic Opportunities for Growth

Economic growth in Lagos has led to enhancements in infrastructure, including roads, transportation, and services, and has drawn major corporations from different regions of Nigeria, Africa, and abroad. As a result, various new economic prospects in the formal sector have emerged.

How have industrial areas stimulated economic growth in Lagos?

A range of industrial areas in Lagos have stimulated economic growth. The map below shows examples of industrial areas in Lagos.

The Port of Lagos

Lagos’ coastal location has been the foundation of its development as a megacity. Since the settlement was established as a fishing village, its geography has enabled it to become a thriving seaport. Lagos Lagoon provides a sheltered harbour for ships, making it very accessible.

The Port of Lagos—one of Africa’s largest and busiest ports, specialises in maritime and logistics, oil and gas, and manufacturing. This industrial zone is critical for Nigeria’s import and export activities, enhancing trade and attracting substantial investments that fuel economic growth across the city.

Ikeja Industrial Estate

Ikeja Industrial Estate is a central manufacturing hub, home to a broad spectrum of industries from food and beverages to textiles and pharmaceuticals. Its strategic location as the capital of Lagos State has made it a magnet for both skilled and unskilled labour, significantly boosting local employment and contributing to the city’s Gross Domestic Product (GDP).

Agbara Industrial Estate

Agbara Industrial Estate is renowned for its modern infrastructure and hosts many multinational and local companies across fast-moving consumer goods (FMCG), pharmaceuticals, and electronics sectors. Positioned on the outskirts of Lagos, Agbara is instrumental in drawing foreign direct investment and advancing technological growth within the region.

Lekki Free Zone

Lekki Free Zone is designed to further economic diversification and international trade, offering enticing incentives such as tax reliefs and customs duty exemptions. This zone attracts a mix of international and local investors in sectors like high-tech, oil and gas, and manufacturing, promising to significantly elevate Lagos’s economic status through job creation and technological innovation upon its full development.

Murtala Muhammed International Airport

Originally known as Lagos Airport, Murtala Muhammed International Airport has also increased Lagos’s accessibility. It is now the main arrival point for 80% of flights to West Africa and the main base for Nigeria’s largest airline, Arik Air. In 2015, over 7 million passengers passed through the airport.

What has been the impact of industrial growth in Lagos?

Lagos has developed into a major industrial powerhouse due to its excellent transport links. The development of manufacturing and other industries has created hundreds of thousands of jobs. Additionally, the growing population provides a workforce for goods and services and a market for them. Lagos has one of the country’s highest income levels per head, creating a high demand for services and retail. Many people are employed in the service (tertiary) and public sectors. Also, the workforce is becoming better skilled and educated with more schools and universities. All of these factors combine to encourage industry to locate in Lagos.

As a country develops, more of the workforce is employed in the tertiary industry, and fewer people work in the primary industry. The graph below shows rapid development in Nigeria between 2000 and 2016.

Nigeria’s Employment Structure

The economic growth of Lagos is an excellent example of the multiplier effect.

The multiplier effect

What contribution does Lagos make to the Nigerian economy?

Lagos contributes significantly to the Nigerian economy—30% of its GDP. This is remarkable, considering Lagos is home to only 10% of the country’s population. Most of Nigeria’s manufacturing and service industries, such as finance, are based in Lagos.

Lagos is constructing a new city on the coast called Eco Atlantic. Eko Atlantic is an entirely new coastal city built on Victoria Island adjacent to Lagos, Nigeria. The project is privately funded by South Energy Nigeria Limited – the developers and city planners, a subsidiary of the Nigeria-based Chagoury Group of companies – working in strategic partnership with the Lagos State Government and supported by the Federal Government of Nigeria. It will be home to a quarter of a million people and employ 150,000 more.

The informal economy – benefits and problems

The unemployment rate in Lagos is lower than in the rest of Nigeria, at 9.9% in 2015. However, for those without a job, no government benefits are available. Most people who are not formally employed work in the informal economy to get by. This includes jobs such as shoe shining, waste recycling, or street vending.

The Olusosun landfill is a 100-acre dump in Lagos. It is the largest in Africa and one of the largest in the world. The site receives up to 10,000 tons of rubbish each day. Waste from around 500 container ships is also delivered to the site, adding a substantial portion of electronic waste. Some of this material is treated with chemicals to extract reusable products, releasing toxic fumes.

Olusosun – the largest dump in the world

Around 1,000 homes exist at the site in temporary settlements, occupied by residents who work at the dump scavenging for scrap to sell.

Olusosun landfill was once located on the outskirts of the populated area. However, in recent years, Lagos has undergone such a massive expansion that commercial and residential areas surround the site. The dump has shops, restaurants, bars, cinemas, and a mosque.

Daily, the residents sort 3,000 tonnes of waste by hand, picking out valuable items to sell. Without the dump, many reusable items would go to waste.

When it is dry, natural gases build up under the waste. This often leads to fires which are hard to put out. Natural gases such as methane can be harnessed for energy. A new project by the Lagos State Waste Management Authority is planned to produce 25MW of electricity. This is enough to power a town, though not a city the size of Lagos. Olusosun is an example of how people in Lagos find solutions to problems – seeing an opportunity where others might see junk.