Opportunities and Challenges of Doing Business in Lagos

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Lagos, with a population of about 18 million, offers a robust economy driven by a large and well-educated workforce. Its strategic location as a gateway in West Africa and status as a financial hub make it attractive for businesses. However, challenges such as inadequate financial resources, decaying infrastructure, and poor power supply need to be addressed to support sustainable economic growth.

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DOING BUSINESS IN LAGOS HIGHLIGHTING OPPORTUNITIES, CONFRONTING THE CHALLENGES

STRENGHT OF LAGOS ECONOMY Population size of about 18 million the large population of the State is an enormous strength and platform to grow and develop the economy of Lagos State. Embedded in the size of the population of the State is the growing quality of human capital as a result of the demographics of Lagos of young, aspiring and educated manpower.

WEST AFRICAN DEMOGRAPHICS 2011 ESTIMATES (MILLION) NIGERIA BENIN BOURKINA FASO 17 COITE DEVOIRE 22.6 GAMBIA 1.8 GHANA GUINEA LIBERIA TOGO 162 9.1 25 10.2 4.1 5.8

STRATEGIC GATEWAY Location and gateway status By virtue of its location, the State houses the two biggest ports in the country Apapa and Tin Can. The State thus serves and will continue to serve as a major Gateway in and out of the country for imports and exports.

FINANCIAL HUB It houses the greatest part of Nigeria s financial services, including banks, insurance companies, and investment houses and hosts the Nigerian Stock Exchange (NSE) market. Through this, it provides access for many companies and government at different levels to both short and long term capital.

WEAKNESSES OF LAGOS ECONOMY

FINANCIAL RESOURCES Inadequate capital, both human and financial The capital required for the economic growth towards 2020 is inadequate. The State will be required to improve on the ability to attract both financial and human capita on an increasing basis.

INFRASTRUCUTRE Decadent infrastructure The state of infrastructure in the state requires significant maintenance, improvement and building of new infrastructure to be able to support the required economic growth.

POWER SUPPLY Poor power supply The current level of power generation and distribution in Lagos, as in other parts of the country, is abysmal. This level cannot support the required economic growth. Indeed, the continued inability to solve our power problems constitutes the greatest barrier to our future economic growth.

OPPORTUNITIES

TRADE AND COMMERCE Trade and Commerce Enormous opportunities to continue to grow the economy using trade and commerce platforms. Nonetheless, this sector requires a lot of improvement to minimise the fragmentation of our markets.

FINANCIAL SERVICES Financial services Greater opportunities exist for growth in financial intermediation. Firms, businesses and government will continue to require financial needs that will include loans, bonds, investment advice etc. Individuals will also continue to require loans, mortgages, insurance, investment advice, stock broking services, providing avenues for financial services providers to continue to earn incomes from interest differential businesses and commissions from advice and trading services.

TOURISM Tourism This area of the Lagos State economy holds enormous promise. To fulfil the promise, tourism companies will have to be developed around tourism potentials such as festivals. Hotels and hostels development will also be developed around tourism corridors while the government will provide administrative and institutional support to the industry.

REVENUE GENERATION Robust Opportunities exist for revenue generation for government in the state. It s a reflection of the Private sector dominance in the state.

THREATS

FLOODING The topographical landscape of the State raises the threat of flooding. With the climate change phenomenon, there is a high risk of impact on coastal locations. But the State is very aware of this and has been taking measures that ensure the threat is not realised.

MIGRATION ISSUES Excessive migration from other states As the attraction to Lagos State remains huge, the State must ensure it manages the movement of people from other states for its ultimate benefit and the benefit of the country. For example, ensuring that the influx does not result in additional slums and blighted areas.

TRANSPORTATION The threat is serious but the identification of this threat makes the management of it simpler than it would have ever been. Because of the threats posed by gridlock on our roads, the State is developing an intermodal transport policy that will combine the use of water, rail and road transport.

MAJOR CHALLEGES TO BUSINESS AND COPING STRATEGIES

CHALLENGES COST ISSUES MARKET ISSUES OPERATIONAL ISSUES POLICY ISSUES MACROECONOMIC ISSUES INSTITUTIONAL ISSUES LOGISTICS INDUSTRIAL RELATIONS

COST ISSUES COST OF FUNDS TENURE OF FUNDS INTERVENTION FUNDS EXCHANGE RATE CAPTIAL MARKET CORPORATE BONDS

MARKET ISSUES COMPETITIVENSS ISSUES SMUGGLING AND DUMPING DOMESTIC MARKET ACCESS GLOBAL MARKET ACCESS

OPERATIONAL ISSUES PERSONNEL ISSUES GLOBAL OIL MARKET AND DIESEL COST DEREGULATION OF THE DOWNSTREAM OIL SECTOR ELECTRICITY TARIFF REVIEW

POLICY ISSUES LOCAL CONTENT POLICY TRADE POLICY-IMPORT BAN ETC PATRONAGE OF MADE IN NIGERIA PRODUCT POLICY EXCHANGE RATE POLICY MONETARY POLICY

MACRO ECONOMIC CHALLENGES INFLATION RATE EXCHANGE RATE SITUATION INTEREST RATE SITUATION FISCAL OPERATIONS OF GOVERNEMNT TAXATION GLOBAL ECONOMY

INSTITUTIONAL CHALLENGES ETHICAL AND TRANSPARENCY ISSUES BUREAUCRACY REGULATORY ISSUES AND COST OF COMPLIANCE TAX ISSUES LICENSING ISSUES CONTRACT ENFORCEMENT PROPERTY RIGHT PROTECTION SMUGGLING/COUNTERFEITING

LOGISTICS CONDTION OF ROADS COLLAPSE OF THE RAILWAYS LAW ENFORCEMENT ISUES

COUNTRY RISK CHALLENGES POLITICAL RISK SECURTY RISK EXCHANGE RATE RISK INTEREST RATE RISK FINANCIAL RISK POLICY RISK GLOBAL RISK

FUNDING OPPORTUNITIES BANK OF INDUSTRY BANK OF AGRICULTURE CBN INTERVENTION FUNDS EQUITY OPPORTUNITIES WHEN STOCK MARKET RECOVERS BOND MARKET OPPORTUNITIES

OUTLOOK FOR INFRASTRUCUTRE POWER SECTOR REFORM ROADS CONCESSIONING REFORM OF RAILWAYS

SECURITY CHALLENGES EMERGING TERRORISM ETHNIC/RELIGIOUS DISTURBANCES NIGER DELTA MILITANTS AND THE AMNESTY PROGRAMME ARMED ROBBERY INCIDENTS

ROLE OF THE LAGOS CHAMBER OF COMMERCE

Investment Facilitation Activities LCCI public policy advocacy impacts positively on government socio-economic policies - tax policy, tariff and trade policy, Others are economic reform issues such as Privatisation of Public Enterprises and economic liberalisation. Foreign exchange policy, interest rate policy, telecommunications policy etc. .

Invesment Facilitation Contd Representations are made to governments at all levels (federal, state and local governments) from time to time on matters affecting the investment environment, especially on the need to bring down the cost of doing business. The Lagos International Trade Fair attracts many foreign and local exhibitors and more than 1.0 Million visitors. The investment promotion value is immense.

Investment Facilitation Contd. Facilitation of international business contacts through direct linkages and matchmaking of domestic and foreign investors. Organization of group participation in exhibitions and trade fairs outside the country Regular hosting of Inward Trade Missions and occasional organization of Outward Trade Missions

Investment Facilitation Contd. The Chamber collaborates regularly with the Nigeria Investment Promotion Commission in facilitating linkages between domestic and foreign investors Regular collaboration with international organisations such as UNIDO, UNDP,IFC, EU, ECOWAS FUND etc

Small and Microenterprises Support Small and Microenterprises Support Programmes Programmes Entrepreneurship Development Programmes for SMEs, and SME consultants. Export Development Seminars for SMEs with special focus on exportable products, Export Documentation, Export market information etc. Business DevelopmentPogrammes for SMEs and Micro enterprises.

ROLE OF ENTREPRENUERIAL SKILLS

BUSINESS SELECTION PERSONALTY FIT PASSION KNOWLEDGE OF BUSINESS EXPERIENCE SKILLS AND KNOWLEDGE EASE OF ENTRY UNIQUENESS

PASSION Self Discovery, Personal Vision What you like and love to do Passions drives business through the major challenges. Enhances efficiency and effectiveness

KNOWLEDGE OF BUSINESS KNOWLEDGE OF BUSINESS How much do you know about the area? Will you have to spend extra time and money teaching yourself the business? Will you have to take on a partner because you don t know the business well enough?

EXPERIENCE In some cases, you may have a lot of knowledge about the subject, but not much experience. Have you ever owned or worked in this type of business before? To what extent is hands-on experience crucial to the business? Apprenticeship

YOUR SKILLS To what extent do you possess those skills relevant to the business? If you lack them, how difficult will it be to acquire them?

EASE OF ENTRY Think both of the costs of entering the business and of the competitive barriers that might exist. For example, a service business that you can run from your home might be relatively inexpensive to start. But if several others are already providing that service, entry in the field may be difficult.

UNIQUENESS Uniqueness does not necessarily mean that literally no one else is providing the same product or service; It can mean that no one else is providing the product or service in the same way you intend to provide it, Or it can mean that no one else is providing that product or service in your area. You re looking for some way to distinguish your product or service from others who are already in business.