Lagos: Megacity or Crisis City?

 
“Lagos is a state of mind” - a message fervently echoed by Friday’s panel at the School of Oriental and African studies in London. An evening discussion with Jaasper Moelker of Urban Detectives, Simon Gusah, a Planning Consultant in Nigeria and Kunle Adeyemi for the Office of Metropolitan Architecture stirred a lively response from the auditorium composed predominantly of well informed Nigerians with a personal concern for the future of Nigeria’s nerve centre – Lagos.
 
The explosive growth of Lagos – by 2020, it will be the third largest city in the world, with 24 million inhabitants – has brought near-paralysis to the city’s ring of highways. Lagos’s infrastructure is being pushed to its limit, resulting in severe traffic congestion. This contrasted with the city’s impressive estimated 3.6 trillion Naira (£16 billion) annual turnover begs the question, Megacity or crisis city?

Although chaos filters through all parts of Lagos life, it is arguably stable and organised chaos. Where there is a place, people will occupy it, reflected in the bustling marketplace and booming informal economy. Gusah, an advocate for this standpoint, was clear in his thoughts: there is no problem in Lagos. The government and the private sector create the problem they believe they are trying to solve. They have not learned what makes Lagos tick and it certainly does tick. The crisis lies within the structure of government; their inability to carry out infrastructure programmes and policies that last beyond two years is shutting down development. Improvement takes five, ten, maybe twenty years which requires relentless commitment. At present their priority is to award new contracts when it should be to concentrate on the current.
 
Adeyemi’s fascinating presentation introduced what the Office of Metropolitan Architecture envisages as the saving operation, the 4th mainland bridge. The 1.5km long bridge will be the missing link completing a transport ring around the city, connecting Ikorudu with the community of Aja/Lekki, and facilitating the rapid expansion of the eastern corridor of the city. While vehicle traffic flows on the bridge’s upper deck (which includes lanes for BRT buses), the lower deck facilitates the inevitable hustle and bustle of Lagos in a more conducive environment. Markets, kiosks, shops, bars, and restaurants will generate a new area of pedestrian convergence, fostering economic growth, social life, culture and interaction. An image included in Adeyemi’s presentation featured a Prada store alongside the fruit ladies on the lower deck – an interesting vision!
 
So, it seems that this potential megacity could be just that – the work of Fashola, Governor of Lagos State, was considered by the panel as positive progress. Gusah commented, "In Africa, you are praised for doing your job and Fashola seems to be doing his...I am as happy with his work as I am with the work of my local council. Fundamentally there is nothing outstanding about this but we must think of it relative to other African leaders and politicians.”

Lagos is not a city in crisis, but its rapid growth poses serious questions that need intelligent answers and responsive, responsible and flexible governing. This is the problem with great opportunities and Lagos undoubtedly presents a great opportunity.
 
 

"Un-caging the lions'' - How Business is transforming Africa for the better.

Article published in the Economist magazine June 10th.

For once an investment fad seems justified: the 21st century is shaping up to be that of the emerging markets, just as the 20th was America’s century and the 19th Britain’s. But that leaves open the question of which countries, exactly, will emerge. Will Asia and Latin America mark the limits of the spreading prosperity? Or will the boom reach the perennial laggard, Africa? Will a new pride of economic lions take their place beside the Chinese dragon and the Indian tiger?

Ten years ago The Economist dubbed Africa “the hopeless continent”. Since then its progress has been remarkably hopeful. In 2000-08 Africa’s annual output grew by 4.9% (adjusted for purchasing-power parity), twice as fast as in the 1980s and 1990s and faster than the global average of 3.8%. Foreign direct investment increased from $10 billion to $88 billion—more than India ($42 billion) and, even more remarkably, catching up with China ($108 billion). The Boston Consulting Group notes that, since 1998, the revenues of Africa’s 500 largest companies (excluding banks) have grown at an average of 8.3% a year.

But is this growth sustainable? Or is the current fad for Africa just another bubble? The pessimists have always had three strong arguments. One is that African politics is dysfunctional. Warring strongmen can undo the progress of decades in weeks. A second is that the African economy is unduly dependent on the resource sector. A third is that Africa’s growth does too little to benefit the poor. But over the past decade, all these objections have weakened.

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Banking on mobile phones: Out of thin air Jun 10th 2010The numerous examples of government failure can now be weighed against examples of success. The continent’s inflation rate has been reduced from 22% in the 1990s to 8% since 2000. The World Bank’s annual “Doing Business” report ranked Rwanda as the world’s top reformer this year, based on the number and impact of steps to promote entrepreneurship there. Mauritius was ranked 17th of the 183 economies covered by the report, ahead of lots of richer places.

It is true that Africa has depended on its abundant natural resources; and they will be a growing advantage in years to come. The hectic pace of growth in the emerging world is not only pushing up commodity prices but also intensifying competition for the right to drill the continent’s oil and mine its minerals. Chinese companies in particular are wooing African governments with lavish expenditure on infrastructure.

McKinsey points out that the natural-resource sector accounts for only about a third of the continent’s growth. Africa is producing a growing number of world-class companies outside the resource industry, from South African giants such as SABMiller, the world’s second-largest brewer, and Aspen Pharmacare, the largest generic-drugmaker in the southern hemisphere, to niche players such as Tunisia’s Coficab, one of the world’s most successful suppliers of wiring for cars.

As to the poor, McKinsey points out that, thanks to rising living standards, some 200m Africans will enter the market for consumer goods in the next five years. The consultancy also notes that the continent’s working-age population will double from 500m today to 1.1 billion in 2040. Consumer-goods companies ranging from Western giants such as Procter & Gamble to emerging-market car companies such as China’s Great Wall and India’s Tata Motors are pouring into Africa. Foreign firms are likely to start using Africa as a base for manufacturing as well, as Europe’s population shrinks and labour costs in India and China rise.

Africa is also seeing the benefits of “frugal innovation”—inventions that are designed to serve the poor. Mobile-phone companies, which have done more than anybody to improve the lives of poor Africans, are continuing to innovate. Kenya’s Safaricom and its rivals are pioneering money-transfer by mobile phone (see article); mobile savings and agricultural-insurance schemes are next. Companies from other emerging markets are also expanding into Africa. Bharti Airtel, which completed its $10.7 billion acquisition of Zain Africa, is a world-leader in improving services while reducing costs.

Nor is innovation confined to telecoms. Vijay Mahajan of the McCombs School of Business at the University of Texas, Austin, produces a long list of innovators in everything from the design to the distribution of products. Nakumatt, a Kenyan retailer, allows people living abroad to buy vouchers for its stores and then transfer them to their African friends and relatives, making remittance payments smoother. Other bottom-of-the-pyramid innovations include the Jiko, a portable charcoal stove that can reduce fuel consumption by 30%; the Q-drum, a doughnut-shaped plastic container that can be used to transport water by rolling it along the ground; the Weza, a foot-powered generator that can be used to charge cell phones and radios; and a $20 washing machine made from discarded motors and iron.

Lions and bulls

A decade of growth has also given Africa’s business people a new élan. Mo Ibrahim, a mobile-phone pioneer, has established an index to measure governments’ performance and an annual prize of $5m, plus $200,000 a year for life, to an African leader who rules well and then stands down. He has also founded a venture fund which plans to invest $200m in Africa this year.

Such successful entrepreneurs can point to countless examples of how business can improve people’s lives. In Kenya, where the government has removed its dead hand from the telecoms market, mobile phones are ubiquitous; in next-door Ethiopia, where the government’s grip is as tight as ever, only 2% of the population has phones. A few African lions are beginning to take their place next to the dragons and tigers.

Football Fever hits SA

With just 2 days until the opening ceremony, the excitement is literally a tangible phenomenon. Everywhere you turn there are flags, Makarapa hats (fashioned out of builders safety helmets) and of course, the vuvuzela.

Now, I feel that I have to take a moment - or more - to discuss the vuvuzela because, love it or hate it, it has become a South African icon, part of popular culture and for this FIFA World Cup 2010 at least, a symbol of the indomitable African spirit. Sitting in the stands last night watching Mozambique vs Portugal, this was very much in evidence. The call of the vuvuzela resonating around the stand was both a challenge and a celebration, a distraction and an encouragement....a paradox that I am sure is going cause much media furore over the coming weeks. With so many vuvuzelas being blown at once, it begged the question of what the collective noun might be. My pounding head (despite earplugs) suggested a ‘violation of vuvuzelas’ but my heart knows that it is really a ‘victory’.

A victory of vuvuzelas for a continent finally given the chance to show the international community that it can host a world-class FIFA tournament, a victory of vuvuzelas for a continent pulling together for the first time in a year of peace and security and finally, a victory of vuvuzelas for Africans everywhere as the world wakes up to our potential in sport, culture and as a growing economic force.

So bring on FIFA World Cup 2010! Africa is ready, her arms are open in welcome....come and join the fun.

Why CSR in Africa can be a unique force for good

In the poorest slum district of Addis Ababa, Ethiopia, some 50,000 people receive fresh drinking water and sanitation facilities through a project run by an NGO called AMREF. I was lucky enough to visit this community in Kechene and talk directly with the beneficiaries to understand the impact of this project, a corporate social responsibility (CSR) project funded by the Diageo Foundation, a premium drinks company.

What my colleague and I unearthed was a project well planned, thoroughly implemented and carried out by passionate people who genuinely wanted to improve the standard of living for those living in Kechene. Although we catalogued numerous benefits, the real impact on the community was evident to me when I met Meselu Abreham. Meselu is a local resident in charge of one of the water and sanitation committees who look after the new facilities. Before I could thank her for telling us about her new role, she ushered us into her one-roomed house and headed directly for the only ornament in the room, an earthen vase made by her cousin. She was adamant that we take it and keep it as a gift from the people of Kechene, as a thank you for changing their lives through the project. After some persuading, we were obliged to accept her kind offer which now resides within my own house as a symbol and reminder of the powerful force good CSR can be in Africa.

CSR in Africa is different from CSR in Europe or America. It has different driving forces. The strength of regulation in Europe and America encourages improved environmental performance and ethical business practices. Institutional investors and shareholders play less of a role in how the companies they invest in behave. The level of environmental and social awareness from consumers and employees is not at the same intensity and expectations about how businesses should operate are different. Interestingly in Africa, because companies are so embedded in the fabric of society, businesses are expected-and eager- to play more of a role in developing the communities in which they operate.

Consequently, there is a large difference in the potential for impact of CSR in Africa compared to more developed countries. Because of these differences, there has been an encouraging debate about what exactly is CSR in Africa? Is it just window dressing to improve corporate reputation or does it really add value to the company’s financial bottom line and the community at large?

It was this debate that I frequently found myself in during conversations whilst travelling across the continent . This is what sparked the idea of the East African CSR Awards. It was clear that many companies were investing in community development programmes and improving their operations to reduce environmental impacts and increase employee health and safety. The awards therefore aim to showcase initiatives which have truly benefitted the society, environment and businesses in order to clarify what good CSR in Africa looks like.

A recent seminar in Monrovia, Liberia this year hosted by the Brenthurst Foundation looked at developing guidelines for CSR in Africa. This demonstrates that there is a need for clarity. An initiative like the East African CSR Awards can help develop an understanding of how the private sector can create sustainable development and alleviate poverty in Africa.

On the judging call to decide the winners and highly commended projects for the Awards, some common themes began to appear:

· A commitment to investing in time and resources to assess what the project should be, what benefit it would bring to the business and community / employees and how it should be implemented. This commitment creates innovative and context-relevant projects such as Unilever Tea Tanzania and Kenya’s ‘Lightning Detection Programme’.

· An integration of business incentives with environmental and social good, as illustrated by Sandali Woods and their strong ethos for sustainability.

· Comprehensive monitoring and evaluation systems to record not just outputs but actual development impact. Eastern Produce Kenya’s Environmental Programme and Mabati Rolling Mills’ project clearly demonstrated that ‘what gets measured gets managed’.

· Community-driven activities in order to foster community ownership and sustainability as Tullow Uganda’s project demonstrated.

· Strong partnerships with credible NGOs and local authorities to ensure an element of sustainability and alignment with government policies, as was characterised by Safaricom’s ‘A World of Difference’ secondment programme and Unilever Tea Tanzania’s Forest Conservation programme.

· A multi-faceted approach to the project, ensuring different elements such as awareness raising and management mechanisms were put in place, as demonstrated by Nile Breweries Supply Chain project.

Over the course of the year, the Awards secretariat hopes to work with its partners and judges to develop these guidelines and criteria with the hope of stimulating more successful CSR projects in East Africa and assisting the government in creating an enabling operating environment for businesses to implement excellent CSR. Ultimately, with everyone playing their part, the private sector can drive an inclusive model of economic growth for Africa, providing equitity and sustainability.

I would like to thank all those involved in making the first East African CSR Awards a success – the Honourable Tanzanian Minister of Trade, Industry and Marketing, the sponsors – Bank M Tanzania and Dow Chemical East Africa, the partners – the East African Business Council and the East African Magazine (Nation Media Group), the distinguished panel of judges and the chairman of the Awards secretariat, Mr Elvis Musiba, and last but not least, all the companies who entered.