Lagos can leap, Lagos can lead, Lagos can make its own league!
Within the common room of the Thatcher building at the Oxford Said Business School hangs a large, formidable and awe-inspiring portrait of the unmistakable Iron Lady, Baroness Margaret Thatcher. The portrait is bold, seemingly proud in a good way and effectively pays homage to the somewhat controversial figure in the inspirational success of the city of London. Who can forget the rather eerie song, “Ding dong the witch is dead”, she certainly has a divisive legacy. The success of the city of London in financial services can be traced back to the actions of the Iron Lady around 1986. The “Big Bang” deregulation of city activities led to a boom in innovation in the city. The success of financial services in London remains one of the key legacies of the Iron Lady.
Dear reader, be under no illusion, I’d very much like Lagos to be as successful as London, the world leader in financial services. However, in a quip derived from Baroness Thatcher, “Pennies don’t fall from heaven; they have to be earned on earth. Lagos must earn its place in this financial world and here is how it can do that over the next 30 years. You didn’t really think it’ll happen tomorrow now did you?
First, can we get better connected roads and a meaningful rail network? For Lagos to compete favourably as a financial hub, it’ll be helpful to not spend over an hour trying to get to Ikeja from Victoria Island. Yes, there are rumblings in government about infrastructure development but a significant and concerted drive needs to occur like that experienced by Johannesburg in the run up to the 2010 World cup held in South Africa. If Lagos were to be a host city for the World cup in 2026 would that be done with the current level of infrastructure? Perhaps the strategy for the government should be to treat “becoming a global financial centre” like hosting a World cup event that will continue for over a 30-year period. A global financial centre is not a safe harbor, a resting place or a finished work but a challenge constantly renewed where the products of our labour match the meaning of our lives. It doesn’t end with roads folks. Good schools, good water and good security for the global workforce are a basic requirement for a successful financial hub. Why do the Oligarchs all flock to London?
Secondly, Lagos through its governance structure must decide to make Lagos the back office of the financial services world in the way Bangalore and Manila have done through serving as critical out-sourcing centres. Yes, that’s right, do the dirty work and earn your stripes! Specialized outsourcing zones need to be created where a series of businesses could co-locate and share various forms of information technology infrastructure, power and storage facilities. We are really talking about vanilla processes like trade settlements, processing of necessary payments and development of financial models for the likes of Bloomberg, investments banks and asset managers. Oh wait! Processing of payments in a regulated foreign exchange market? Never! A critical step for the development of Lagos as a leading financial centre for the world is the complete and utter deregulation of the foreign exchange market. Until the fx market is deregulated, Lagos may remain a backwater financial centre. For the proponents of a regulated fx market working in Lagos, enjoy your brackish backwater status, no plaudits or portraits with your faces on it will appear in the distant future. For the opponents, thumbs up we may get unchartered waters status one day and your portraits may hang somewhere someday.
Thirdly, now we are the back office of the world, we have good infrastructure, now we can hope for the bigger leagues. Front office fun! It is possible that Lagos may cease to be a divisional or regional centre and take a larger share of time and attention away from the larger centres in Europe and the Middle East.
Let’s pause here and take note of an important point. Incremental development occurs with acceptable governance because acceptable governance occurs with incremental development. Lagos over the last seventeen odd years have had governors; Tinubu, Fashola and Ambode, who in their little way provided incremental development in the intervening time. Incremental development now needs acceleration to move Lagos to a financial power house. After all, Canary Wharf of today was no better than Apongbon in 1980.
To attain this goal, key questions; are the people ready? Is the government ready? and do we really want it? Three yeses to this question means it could be a 15-year journey rather than a 30-year journey. Whatever the case maybe, we need bold, clear and strategic thinking in Lagos and wider Nigeria to deliver a more service oriented economy. Industrial development is great but services are arguably easier to develop and maintain in a short period of time.
Can Lagos leap to global financial centre status? Yes, with the right leadership, drive and focus.
Can Lagos lead as a global finance centre? Yes, it could be a leader in back and middle office operations.
Can Lagos make its own league? It’s already in a backwater league, I believe it’s time to aim higher. Lagos can truly lead.
Dayo Oduwole
