Investors

LSWC - An Investor's Delight
Lagos is the commercial nerve-centre of Nigeria . Until 1991, Lagos was the seat of administrative and political activities of the Federal Republic of Nigeria, as the nation's capital.

Lagos also accommodates various industries, financial institutions and various tourist attractions and recreational facilities. The seaports in Lagos are arguably the biggest and busiest on the west coast of Africa . Lagos is, therefore, the melting point of all occupational and cultural expressions of all Nigerians.

The rate at which young school leavers and fortune seekers drift from rural areas and hinterland into Lagos has not only impacted on the population size, it has also led to an increase in the population growth rate, and demand for water.

The Market Appeal

The most important and potent external factor that influences the decision to invest is the availability of market. Most investments are often induced by demand for products and services.

The population of Lagos and the level of commercial and industrial activities going on in Lagos make it the biggest market for any product in Nigeria .

Power Holding Company of Nigeria (NEPA) records show that about 44% of their sales is made in Lagos alone. Lagos , therefore, is an attraction for any investor that is worth his salt.

This also applies to water supplies, with its prospects of economies of scale reinforced by the large market.

Currently, the Lagos State Water Corporation (LSWC) and other pockets of private operators cannot effectively serve the entire populace. LSWC, the major water producer, can only meet 55% of the water demand of the entire state while the remaining supply is currently being provided by the internal market.

The population growth rate projection of 4% per annum also indicates increasing market potential for water producers in years to come. This makes the expansion of production capacity imperative. No investor can ignore such attraction, with so many prospects.

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Enabling Environment

Before the advent of democracy, Nigeria had almost become a pariah nation. Political upheavals from various sections of the nation did not help matters. Most investors were wary of the Nigerian market because of the high sovereign risk element they have to cope with. It was difficult to attract foreign direct investments (FDI), especially long-term investments with long gestation periods.

The situation has, however, changed for the better because of our new democratic environment. Slowly and painfully the Nigerian socio-political landscape is gradually assuming a state of stability and serenity.

The pockets of ethnic and religious disturbances notwithstanding, there exists a collective resolve of every stakeholder in Nigeria to build a strong, united and stable polity, and our foreign friends also know this.

Privatisation

Experience worldwide has revealed that privatisation of state-owned enterprises has assumed much political and economic dimension. Surprisingly, the Nigerian attitude to the privatisation of those things commonly referred to as social goods and services like water, waste management, power has been very positive. Consumers are willing to pay if only the services are available.

The government has also been at the forefront of the propagation of the privatisation programme. There also exists a general enthusiasm and optimism among the ordinary citizens about the benefits privatisation offers them.

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Lagos State Government:

A Trailblazer
The Lagos State Government has been the most active and proactive government on the issue of privatisation.

The administration of Governor Bola Ahmed Tinubu and his team approached the programme with so much seriousness and every sense of urgency it requires, yet not compromising expected standards, and basic international principles guiding privatisation programmes.

The state government has employed the services of the International Finance Corporation (IFC), a sister organisation to the World Bank, to package the privatisation of water supply and sanitation and to restructure the Lagos State Water Corporation.

A privatisation committee, headed by a cabinet member (Commissioner for Budget and Planning), is also in place to oversee the total privatisation programme in all the sectors of the state.
In the same vein, a privatisation office has been put in place to work with various international consultants on the programme, under the auspices of IFC.
The process will, no doubt, enhance the confidence of both foreign and local investors and other stakeholders in the state.

Will Lagos Residents Pay For Water?

The willingness to pay factor is of paramount importance to the investor. Water, unlike every other social good, is seen by many as a social good not to be paid for. Some often say water is a gift from God, but this notion has gradually faded away in Nigeria , particularly in Lagos , where payment for water vendor supplies, borehole owners and private tanker supplies is legendary.

An allusion to guaranteed profitability also finds place among traditional folks as is aptly echoed in an age-long common saying of the Yoruba that a water seller never makes a loss.
This also indicates that the private water seller participation in water supplies in our society is not a new phenomenon.

The general feeling in the utilities market is that if regular supply is guaranteed, people are ready to pay even economic rates.

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