How Lagos turns ‘paupers’ into mega millionaires

By Odinaka Anudu

 

In Lagos, dreams come true. Servants become masters, and vagrants become homeowners. Such transformation can happen in a matter of years, or even months.

Zion Orubebe left his Rivers State home for Lagos in 2015. He had graduated from Rivers State University in May 2013 but was jobless for two years.


Prodded by a Lagos-based friend, Orubebe moved to the state in October of 2015.

“I had only N3,000 ($15 at that time) when I came here,” he told BusinessDay.


He went into a babies’ clothing business at the International Trade Fair Complex the following year.


“I sold a piece of land, used some money to pay for a quarter-sized shop and the rest, about N500,000 ($2,538), for business,” he said.


From 2016 to 2024 is just eight years, but it is now like a century. Orubebe has transformed.


In 2019, he became an importer. In 2021, he shifted to export business, shipping out products to Burkina Faso, Senegal and the Central Africa.


By 2023, he had joined an exclusive class of the wealthy: seven shops at Trade Fair Complex, three commercial vehicles, two houses and two private cars. He now lunches at a French restaurant at the posh Ikoyi area of Lagos.


“I came to Lagos as a pauper but I am now a multi-millionaire,” he said.

Orubebe’s story captures the spirit of Lagos: a spirit of enterprise and a reward to boot.


A number of people come into the state from all parts of Nigeria almost empty-handed and leave – or continue to stay- as mega millionaires.


State records say 6,000 persons enter Lagos every day from every part of Nigeria and even Africa. Onyeka Udemezue is one of them. He moved to Lagos from his native Abia State in 2019 when his business shut down due to a fire incident.


Fast-forward to 2024, Udemezue has set up a nylon factory at his Ikorodu base. Apart from owning the land and the building, he employs over 15 staff members. His wife owns a supermarket in the state.

“Lagos is tough, but so is it rewarding,” he told BusinessDay.


The mega size

Lagos State’s gross domestic product (GDP) is estimated at $137 billion – $145 billion. Forget whether it is fourth or fifth largest on the continent, pay attention to what that size means: Bigger than Kenya’s $113.4 billion econom, Ghana’s $74 billion GDP, and Ethiopia’s $127 billion economy.


It is larger than no fewer than 40 African nations in terms of economic size.


A city of millionaires

It is a city that makes millionaires like a manufacturer makes shoes.

Henley & Partners’ 2024 Africa Wealth Report 2024 said Lagos has 4,200 millionaires (in dollars).

Lagos may have dropped from fourth to fifth in 2024 due to currency devaluation, but it still has 4,200 people who are worth N1.5 billion or above.


It is also home to Nigeria’s richest man, Aliko Dangote. For the records, Dangote did not come to Lagos as a pauper, being a great-grandson of Alhassan Dantata, the richest man in West Africa at the time of his death in 1955.


But Dangote’s story can never be complete without Lagos. He came to Lagos in 1977 with a loan from his uncle to expand his business. From there, his wealth spread, shooting him to where he is today.


His sugar plant is in Apapa. His $20 billion refinery is in Lekki. No matter where other Dangote’s businesses are sited, their headquarters are in Lagos.

Billionaire, Mike Adenuga, and his Globacom are in Lagos.

Billionaire Femi Otedola, executive chairman of Geregu Power and a host of other companies, is in Lagos.


Billionaire Abdul Samad Rabiu, chairman of BUA Group, is in Lagos. Billionaire Cosmas Maduka and his Ford assembly plant are in Lagos. Billionaire Tony Elumelu and his companies are in Lagos. Billionaire Jim Ovia and his firms are in Lagos. The list is endless.


“Being a commercial city throws up a lot of opportunities for people who are enterprising,” said Muda Yusuf, who was director-general of Lagos Chamber of Commerce and Industry (LCCI) for many years before setting up his Centre for the Promotion of Private Enterprise.

The headquarters are in Lagos


Every serious business has its headquarters or at least a major branch in Lagos. Headquarters of all the major financial institutions from banks to insurance companies are in Lagos.


Serious manufacturers are either at Amuwo-Odofin, Apapa, Iganmu or Ikeja. Nigerian Breweries, Guinness, Flour Mills of Nigeria, Dangote Group, BUA Group, name them.


Telecoms giants such as MTN, Airtel, Globacom are in Lagos. Investment banks, importers, exporters, maritime companies, big farmers, oil and gas companies, among others, are in Lagos.


The Nigerian Exchange Limited is in Lagos. Government regulators such as the Nigerian Ports Authority, and many others, are in Lagos.


Lagos has the highest concentration of small businesses in Nigeria, with about 8 percent share of over 40 million MSMEs. According to the National Bureau of Statistics (NBS) and the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) 2017 data, Lagos has 3.224 million small businesses.


Stable governance

Governance in Lagos has been stable. Only one political family of President Bola Tinubu has ruled the state from 1999 till today. From Tinubu himself to Babatunde Fashola, down to Akinwumi Ambode and Babajide Sanwo-Olu, all have been from the same political party.


Tax revenues have risen from N14.6 billion in 1999 to N651.2 billion in 2022. The state generated N400 billion in the first six months of 2023, the NBS said.


Investors are also betting on the state. Out of a total of N508.98 billion real sector investment made in Nigeria in 2017, Lagos received N235.61 billion, representing 46 percent, the highest in the country, according to data by the Manufacturers Association of Nigeria (MAN).


Of the N552.64 billion investment in 2018, Lagos welcomed N287.16 billion, representing 52 percent, highest in Nigeria. Also, of a total of N496 billion investment made in 2019, Lagos received N180.63 billion, representing 36 percent, the highest in the year.


“Stability has helped Lagos retain its masterplan and economic blueprint,” said Ifeanyi Okeleke, CEO of Kenfrancis Farms.


“It sends a positive signal to investors that things can’t suddenly turn upside down. However, it has also upended the opposition in the state.”


What drives Lagos

It is easier to identify why Lagos is working. A population of about 20 million is seen as a big market. Of all the 16 million international passengers airlifted in 2022, about 6.526 million, representing 40.3 per cent of the total passenger volume, passed through Murtala Mohammed Airport Lagos, said the Nigeria Civil Aviation Authority (NCAA). The seaports are in Lagos.


“The population of Lagos is huge and concentrated. If you are a city of ports, naturally, economic activities will increase. Also, Lagos is a coastal city, and coastal cities are a magnet because their position boosts economic activities,” Yusuf, earlier quoted, said.


A disorganised city

In spite of all the upsides, Lagos is not a bed of roses. This reporter found in 2021 that agberos or revenue touts collected N123 billion from commercial vehicles, tricycles (and motorcycles) but remitted nothing to state coffers. The only thing that has changed since 2021 is that commercial motorcycles have been banned.


Small businesses pay countless taxes to touts and the state government appears to be helpless.

“You pay for ‘ground fee’ before you start a business, pay the local government levy, lock-up shop fee, shop permit, parking permit, radio and TV levies,” said Omolola Adetunji, a small-scale trader at Oshodi.


“Sometimes, you can pay to eight to 10 groups in a day – with only two or three issuing official receipts,” she added.


Lagos is a state with several mega millionaires, but it is also a state where you find the hopeless and the urchins. Beggars, whether genuine or not, litter the streets from Ojuelegba to Igando. People needing medical treatment – some with protruded stomachs and swollen legs – are in the streets seeking alms.  Women beg for alms with babies in the streets, markets and even on the roads.


Traffic clogs the state from Iyana Ipaja to Oshodi, with 6.5 million vehicles striving for space. The state generates 26 million tons of carbon emission, according to Taibat Lawanson, professor of Urban Management and Governance at University of Lagos.


The cost of living is very high. Rents at places such as Oke-Afa, Ejigbo, Festac, Oshodi, among others, have jumped by over 100 percent in three years. A two-bedroom at Oke-Afa, which was N400,000 in 2021 now goes for N1 million to N1.2 million. This explains why many live under bridges. Some analysts estimate that five million residents will be homeless by 2025.


Food can be very expensive for the poor.

“In October 2023, food inflation on a year-on-year basis was highest in Kogi (41.74 percent), Kwara (38.48 percent) and Lagos (37.37 percent),” the NBS said in October 2023.


Development is concentrated in the state and rarely spreads to others.

The state is overpopulated, with people competing for everything. It can also be dirty and polluted.


It ranked 133rd in world’s most polluted cities in the 2023 World Air Quality Report by IQAir.


It is also susceptible to flood, being a coastal state.

Furthermore, in New York, Paris, London and other major world’s cities, foreigners or ‘outsiders’ play significant political roles. Sadiq Khan, London Mayor, is originally from Pakistan. Blessing Adeyemi Mobolade, a Nigerian, is a mayor of Colorado Springs in the United States. However, this may not happen in Lagos.


Its political season can be chaotic. In 2023 elections, people were prevented from voting in the governorship election because they were from a particular region and could swing the election.


“We are worried about our investments, our rights and children in Lagos,” said Nnanna Ukoha, an ex-banker, now an investment banker in Lagos.

However, Lagos State government has tried to douse the tension and assured that it is not discriminatory, but concerns still remain.

This report was first published by BusinessDay

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