Anyone who regularly travels around Nigeria should be familiar with the feeling of relief that comes with landing at Murtala Mohammed Airport and taking their phone out of flight mode to see full network reception and blessedly fast internet speeds. The outward journey, whether it terminates in Kano, Akure, Owerri, Asaba, Jos, Enugu, Port Harcourt, Calabar or Uyo almost invariably involves the unwelcome experience of struggling with weaker signals and lower internet speeds relative to those you can get in Lagos, and there is an obvious reason behind this.
The 2018 Subscriber/Network Data report from the Nigeria Communications Commission (NCC) shows that of Nigeria’s 30,637 mobile telecom base stations, Lagos alone accounts for 4,734. It is important to keep in mind that Lagos State and Lagos City, save for a few outliers like Badagry and Epe are no longer distinguishable from each other. Most of its 1,171 sq km land mass is now a single metropolitan area. Ibadan meanwhile, along with the rest of the vast expanse that is Oyo state makes do with 1,300 base stations. Abeokuta and the rest of Ogun State have a total of 1,931 stations and Port Harcourt along with the rest of Rivers State has 1,671 base stations.
Of course, the network providers probably do not want their services to be so geographically concentrated in a single city in a country as vast and populated as Nigeria, but the cold hard economics of everything makes it such that the investment only goes to where it will find returns. Nigeria’s economic activity and population density are both tilted to an almost absurd degree toward Lagos, making it an African economic behemoth – and also making Nigeria’s fragile socioeconomic balancing act increasingly less sustainable with every passing day.
Instead of waiting for such a time as when this implicit economic and social imbalance explodes into something viscerally unpleasant due to unsustainable levels of internal migration, state government incompetence and intransigence, security breakdown and unemployment, it serves Nigeria’s business community well to start having the conversation now about the potential location for a second international economic centre.
For the purpose of this column, the options under consideration will be restricted to 6 cities – 1 in the southwest, 2 in the north and 3 in the geographical (not political) southeast. Abeokuta will not be considered because it is already merging into a conurbation with Lagos, and Abuja will also not be mentioned because its economy as the FCT is completely different from any other Nigerian city and its operation is generally disconnected from Nigeria’s industrial economy.
The case for Ibadan
Ibadan at one point was rated as the largest urban metropolis in Nigeria, and though its exact share of Nigeria’s nominal GDP is unknown, the 2019 subnational GDP breakdown report from the NBS puts the nominal GDP of Oyo state at N2.5trn ($6.39bn). Of course, this is a very far cry from the $136bn of Lagos, but what Ibadan has going for it is that it offers a large population of anything from 4 million to 6 million people, a thriving consumer goods and services economy, a tradition of functional if not always spectacular government, a significantly less distorted real estate market offering much more value than Lagos, and an infrastructure stock that is not dissimilar to what is obtainable in Lagos.
Ibadan also enjoys the huge economic privilege and opportunity of close proximity to Lagos with a busy highway connecting both cities plus a new standard gauge rail line commencing operation next week. Perhaps most crucially, Ibadan has a well educated and cosmopolitan workforce with a roughly similar culture to that of Lagos, and the city already has much of the infrastructure to support research and development. From the point of view of a business looking to maintain access to the Lagos market while retreating from the adversarial tax regimes, security challenges and huge rental overheads in the ‘Centre of Excellence,’ Ibadan makes a great deal of sense as a business relocation destination.
The obvious downside of being apparently the city that fate has smiled on in this manner is that it is only a matter of time before the afflictions of Lagos find their way there too. If the Oyo state government adopts the extractive and imperial disposition of Alaua toward businesses and middle classes escaping from Lagos to Ibadan, one can be sure that the same debilitating infrastructure deficit, anti-business policymaking, irrational property market and unplanned urban sprawl will find their way there too.
Overall as an option for Nigeria’s ‘second city,’ I would subjectively rate Ibadan at 8 out of 10.
The Case for Jos and Kano
I know what you’re thinking – “he only included Jos and Kano so that he can have two northern cities on the list for federal character.” Actually this is not so. Both Jos and Kano offer significant value in their own unique ways. Jos for example enjoys some of Nigeria’s best weather and environmental ambience and essentially a blank slate for businesses to explore as they please. A number of entrepreneurs who run businesses that do not require physical location in a ‘Lagos’ – such as tech startups offering remote services – have already made the move to Jos. The city in fact is already the biggest technological and creative hub in northern Nigeria outside of the FCT.
Tech entrepreneur and former Konga founder Simdul Shagaya are probably the most recognisable of these names, having chosen to locate his latest startup uLessons in the scenic city. Here is Shagaya in his own words on Twitter earlier this year describing his decision and the outcome:
“Basing uLesson in Jos is the most counterintuitive and smartest decision I have taken. The principle is simple: pay Lagos wages in a low-cost location that’s traffic and stress-free (and genuinely beautiful). Employee satisfaction is higher than for any company I have found. Most team members live in the Rayfield Area and can easily walk to work in 15mins but the company provides a ride home. […] Jos is now equivalent and even better in security to most cities relatively speaking. Also, uLessons offices and residents are in the Rayfield area and are close to the Gov’s office, Airforce Base and essentially shares a boundary with the 3rd Armoured Division. Rayfield is as secure as it gets in Nigeria.”
Similarly, Kano has its own arguments going for it. In the afore-mentioned NBS report, it is the only northern state ranked in the top 10 subnational GDP contributors, ahead of states like Ogun, Oyo and Cross River. Kano enjoys historical trade links with Nigeria’s northwestern neighbours including Niger, Mali and Burkina Faso and it is the de-facto economic headquarters of Nigeria’s northern half. By virtue of Kano’s well-established and meticulously organised positioning as the supply chain capital of the north, it offers a huge amount of consumer potential for the right goods and services.
There is also a growing body of evidence pointing to the city’s growing push to modernise its infrastructure and grow its economy in line with the demands of a booming population. However poorly conceived, the AKK pipeline and the planned flurry of railway lines centring on Kano indicate that it has big dreams for itself. For the entrepreneur or business that finds the right opportunity, it could be a chance to connect with real value.
The problem with Kano and to a lesser degree with Jos however, is the same problem with living and doing business anywhere in the northern half of Nigeria – the real risk of large scale violence and anarchy on a scale that southern Nigerians are just not used to. Some like Sim Shagaya have hedged this risk through strategic location. Others find ways to culturally assimilate and thus reduce the risk of being perceived as an outsider if and when such crisis happen. Different strategies for different risk appetites and all that.
Subjectively, I rate Jos and Kano at 6 out of 10 and 5 out of 10 respectively for their Nigerian second city prospects.
The Case for Port Harcourt
With a $13bn Rivers state economy and the historical advantage of being the de-facto capital of the Niger Delta region, Port Harcourt in an alternate universe has already rendered this article superfluous. This is the city that should at least be Nigeria’s second city, if not compete with Lagos for the supreme title itself. But here we are in the timeline where the city has been led for most of its 21 democratic years by politicians whose main activity in office and general lifetime competency was fighting other politicians. The ‘Garden City’ is not so much a garden anymore as an abandoned vegetable patch.
A mistaken singular focus on government-controlled oil revenues has taken a promising city and reduced the very best of it to the most mediocre of Lagos and Abuja. Instead of creating a plan for industrial development feeding into the oil industry’s presence and thus creating a second economic centre in Nigeria, successive Rivers State governments have squandered state funds on unforgivable white elephant nonsensities, most prominent of which is the uncompleted Port Harcourt Monorail initiated and abandoned by current transport minister Rotimi Amaechi.
Despite these unpardonable gaffes, however, Rivers State does just about keep hold of competitive advantage. Unlike all the afore-mentioned second city options, it is a coastal city with a port, and it already has a significant local economic powerhouse that can be used to drive further economic expansion. Low oil prices notwithstanding, oil production is still going on, the affiliated facilities do exist and Port Harcourt still remains the go-to destination for all things related to fossil energy in Nigeria. Compared to Ibadan or Kano, it is a geographically tiny urban area, but with a population estimated at just over 3 million, it still offers a significant consumer and workforce concentration.
It is also just about 100KM by road from Aba, which is the de-facto consumer goods production headquarters of the geographical southeastern region, so it could potentially also become an export hub for goods manufactured in Aba for the regional West and Central African market. There is an existing metre gauge railway line between both cities which, while capped at 60km/hr still offers great value for cargo transport if some investment can put it into serviceable condition. In addition, the Port Harcourt international airport is one of the only 3 airports in Nigeria whose passenger traffic is actually sufficient for it to run without a government subsidy, alongside Lagos airport and Abuja airport.
If businesses can hedge for the unique challenges of operating in what is still a volatile environment disturbed by militancy and associated instability, there is definitely some value to be had. The Rivers State government, however, will need to adopt a growth orientation focused on business and human development, as against its mistaken “oil-rich” orientation focused on rents, extraction and political patronage.
I subjectively rate Port Harcourt at 7 out of 10 for its second city potential.
The case for Enugu and Onitsha
Enugu and Onitsha are peculiar in that they are the proverbial head without a cap and cap without a head. If both cities could somehow transplant themselves and merge into one entity, this entity would be Nigeria’s second city without even trying. Instead, as it currently stands, they both have exactly what each other lacks. Onitsha was recently rated in the Demographia Report 2020 as the 71st most urbanised area in the world. The only Nigerian city ranked higher is Lagos at 21. As a regular visitor to Onitsha myself en route several recent southeastern getaways, I can confirm anecdotally that Onitsha does indeed have the most ‘Lagoslike’ economic energy in Nigeria outside of Lagos.
Anambra’s $7.8bn bn subnational GDP is driven chiefly by this chaotic, impossibly busy, jam-packed city with an estimated population of just under 1.5 million people. That figure incidentally is negatively inflated by the fact that it is as much a transit city as it is a destination. A more accurate picture of how many humans can be found at Onitsha at any given time can be found by examining the city’s daily entry and exit statistics, which to the best of my knowledge nobody actually tracks to any significant degree of accuracy.
Onitsha is by a very long distance the tiniest geographical area on this list with just 52 sq km of landmass, so its ability to power the majority of a $7.8bn Anambra state economy should put into perspective just how explosively entrepreneurial this little city is. To further appreciate the sort of economic nitroglycerin Onitsha is, say we conservatively estimate its share of Anambra state’s GDP at half and divide this figure ($3.9bn) by 52 sq km, we arrive at $75,000,000/sq km. If we do the same for Lagos ($136bn divided by 1,171 sq km), we get $116,140,051/sq km. In other words, the economic output of Onitsha is proportionally 64.6 percent that of Lagos. No other Nigerian city comes remotely close to this kind of performance.
The problem with Onitsha is exactly what is right with Enugu – Onitsha has terrible infrastructure. While it is a city where a business can realise the sort of returns and scale that only Lagos currently offers, it is also not a city where anyone especially wants to live. Indeed a vast number of people commute into Onitsha across the cramped Niger Bridge everyday and then retreat to Asaba at close of business.
Enugu, on the other hand, offers all of the well-developed transport and municipal infrastructure, hospitals and schools, high-quality accommodation and office spaces, internationally rated hotels, bars and nightclubs and even a lake resort that I have personally experienced and enjoyed. Even its must publicised water table problem which makes drilling boreholes impossible and necessitates stop gaps like water tanker supplies, is a solvable engineering problem, not an existential one. There really is nothing to stop Enugu from growing except one thing.
It just so happens that Enugu lacks any of Onitsha’s industry and economy.
Developed as the administrative capital of the former Eastern Region, Enugu remains at heart, a civil service city with the form and character comparable to Kaduna or Abuja in the early 1990s. With a population of just under 1 million people spread out over 556 sq km, it is as sleepy as it is ordered and neat. You could order a Bolt and make your way to the mall which has a Shoprite, a KFC and a cinema, then stop by Nike Lake resort before heading back to your upscale 5-bedroom townhouse at Independence Layout. You’d almost forget that you are not in Lekki or Alausa, but that, unfortunately, is where the similarities end.
Enugu is as sleepy as Onitsha is bustling. Onitsha is as economically welcoming as Enugu is dry. If you could somehow bridge the 113KM of highway and Awka separating both cities and create a southeastern conurbation, you would have Nigeria’s clear and undisputed second – maybe also third – city. As it is, both cities, while offering promise for different reasons, just about fall short of making the grade to properly challenge Lagos.
Subjectively, I rate Onitsha and Enugu at 6.5 and 6 respectively.
