How Lagos loses out in battle for investors.

Lagos’ state governor was dismayed to read about a new hospital opening in Ghana’s capital Accra last year.

The name was familiar: the investors had come to his city — Africa’s largest — first, but looked elsewhere when it could not deliver the tax holidays and visa-free entry they wanted. “These were some difficult moments for us because all of the things they were asking at that time . . . [were] deliverables that were only at the federal level,” said Babajide Sanwo-Olu in an interview with the Financial Times.

“Ghana said, we have this, we have this, we can give this. So there was a national conversation against a subnational conversation.” As Nigeria reels from its second recession in less than five years and confronts a deadly coronavirus second wave, Mr Sanwo-Olu wants greater autonomy for the country’s commercial capital to allow it to better compete for investment with an African state with a far smaller economy than the megacity. On paper, Lagos, home to telecoms group MTN, the country’s largest banks and with a population of 22m, appears more attractive to investors.

Lagos state’s gross domestic product of $84bn compares with Ghana’s $67bn, Rwanda’s $10.4bn and Kenya’s $95.5bn. “We’re selling the numbers,” Mr Sanwo-Olu said.

“We’re selling the fact that our market has a huge population.” But in the first three quarters of 2020, the latest data available, foreign direct investment into Nigeria trailed Ghana, which has an economy and population roughly seven times smaller. Nigeria ranks 131st on the World Bank’s ease of doing business list, compared to Rwanda at 38, Kenya at 56 and Ghana at 118.

In contrast to the government in its much smaller neighbour, Abuja is less focused on individual projects in Nigeria’s vast territory.

As a result, Lagos is hamstrung by Nigeria’s centralised power structure, said Mr Sanwo-Olu. “We need to have true federalism,” including a state police force, he said.

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