Clearing the ‘Peculiar Mess’ in Lagos
When it rains, it pours. Recently, I wrote an article on the marathon of development-focused governance, which I described as a “relay race”. I used the performance of Mr. Akinwunmi Ambode, the governor of Lagos state, as the reference point. I said though there were issues “here and there”, he had done well in several areas in less than three years. At the time I wrote, the waste management issue in the state was just rearing its head. As if that was not enough trouble, Ambode approved an upward review in land use charge. I have also seen documents showing incredible increases in vehicle licensing fees as well as heart-rending taxes for sinking boreholes. Suddenly, the relatively controversy-free Ambode is engulfed by crises. Not one crisis, but a series. Protests have multiplied online and on the streets. Many are so angry they have gone to the extent of vowing to vote him out in 2019, even when they don’t yet know his opponent. What this tells me is that losing goodwill is sometimes much easier than putting butter on bread. For a governor who worked so hard to gain the respect and admiration of Lagosians to suddenly become a subject of harsh criticism, something has gone really sour. Although he might read political motives to some of the attacks against him, he also handed the bullets to his critics. The messy waste situation in Lagos was the first to put Ambode on the cross. It is quite understandable. In any mega city, such as Lagos, there are certain failings that will attract immediate attention. One is sanitation. In the short run, you can paper over failings in housing, power, education and transportation, but you cannot cover up poor sanitation. The moment people start seeing refuse piling up like mountains, you don’t need any expert to tell them there is a problem. The eyesore is there for everyone to see and there is no amount of explanation that can suffice, especially when the state has been significantly refuse-free for years. I have recently taken interest in the waste management logjam. Here is my summary. One, Ambode launched the Cleaner Lagos Initiative last year, unveiling an ambitious, comprehensive reform that extends to recycling, sorting and dumpsite management — beyond mere refuse collection and disposal. This, if I’m not mistaken, is meant to be an extension of the environmental policies of the administrations of Asiwaju Bola Tinubu and Mr. Babatunde Fashola between 1999 and 2015. I used to hear phrases like “waste to wealth” when Tinubu was in office, and I remember Fashola phased out the cart pushers, making waste collection better organised and more efficient. Two, until now, private sector operators (called PSPs) managed both residential and commercial wastes. They majored on collecting and disposing refuse. They were reportedly getting paid two ways every month — from the customers and the state government. I won’t dwell on that today. Now, the Lagos state government has divided the franchise, granting the residential licence to Visionscape and the commercial one to the PSPs. Under the new system, as I understand it, only customers would pay the refuse collectors. Any other payment from the state government will be based on performance milestones (the banks call it targets). Three, and not to be unexpected, the PSPs were un happy with the new arrangement. Although there was bigger value on offer — more transfer loading stations, recycling facilities, new landfill sites and waste-to-energy facilities — the PSPs were about to part with a guaranteed government payout of at least N300 million a month. There were unconfirmed reports that although 350 PSPs were officially registered and receiving payments from the state government, only 100 existed in the real sense. If true, nobody loses N300 million bonanza and keeps quiet just like that. The PSPs should be expected to take the “rational” decision of setting the house on fire. They downed tools, went to court and the wastes began to pile up. Then the massive media carnage began, particularly on Twitter, and a new narrative took over. It became a dire situation. Visionscape was then directed by the government to clear all the mess. But as the obviously overwhelmed Visionscape was clearing the refuse, fresh piles were surfacing overnight. I can really understand the pushback, or apparent sabotage. Many of the “saboteurs” were arrested, along with their PSP trucks. I saw a few pictures of those arrested in the media, although I’m not sure the suspects are currently facing the music. That’s a different matter. Let’s now look at Visionscape, the company in the eye of the storm. It was co-founded and promoted by Mr. Adeniyi Makanjuola, a young Nigerian entrepreneur. Makanjuola is one of those guys who run away from the media. I had never seen his face until I started doing some Google research for this article a few days ago. He is a scion of Mr. Remi Makanjuola, chairman of the Caverton Group. According to his brief profile on the website of Visionscape, the younger Makanjuola is a product of Financial Economics from the University of Essex, UK, and also has an M.Sc in Urban Planning and Development from the University College London. At the age of 23, he launched a successful helicopter charter service under the umbrella of his father’s marine support business, the Caverton Offshore Support Group. He eventually stepped out of his father’s shadows and, in 2014, moved on to UAE to co-found Visionscape — an environmental utility company — alongside Harry Ackerman, a Briton, and Ali Ahli, an emirati, with focus on emerging markets. Ironically, Visionscape was not even the company that won the bid for Lagos waste management. Averda, Suez, Veolia and Visionscape vied for the job. Averda and Veolia, owned and managed by Lebanese entrepreneurs, were shortlisted. Visionscape lost out. However, when the Lagos state government insisted on a naira-denominated payment agreement, the shortlisted companies backed out, and Visionscape came back into reckoning. It is relatively new but currently operates in parts of UAE and Belgium. It pulled out of Sierra Leone when the Ebola epidemic broke out. Despite the Lagos setback, it is already in talks with authorities in Ghana, Kenya, Mali and FCT, according to reports. It only recently got a foothold in the UK with the acquisition of Gelpack Excelsior. Visionscape is also constructing transfer loading stations across Lagos and building a landfill in Epe — said to be the first of its kind in West Africa. I will now give my opinion. It appears to me that the government did not do its homework very well before reforming the waste management system. There is nothing wrong with Ambode’s Cleaner Lagos Initiative, in my opinion, but I have this impression that he did not do enough consultation before changing what he met on ground. Things are more nuanced that they appear. Lagos has become a shining example across the nation. However, if the government and the powerful politicians do not manage their affairs with tact and wisdom, they will be the losers in the end. Ambode must take another look at stakeholder management. Everybody still can be a winner. As I always say, the political management of reform is as important as the reform itself. But while the waste management crisis can be easily resolved (as soon as the streets are free of waste and efficiency sets in, the rest becomes history), the revenue drive of the government is a different kettle of fish. The underlining assumption that Lagos is the economic nerve centre of Nigeria where real business is done and real money is made, and so the state should leverage on that to raise tax revenue. A mere N100 increase in any tax handle automatically guarantees the government billions of naira in extra revenue. Therefore, the temptation to keep milking the populace is hard to resist. But as much as Lagos wants to continue to set the pace, there is a price to pay. There is a level of taxation that will inevitably activate resistance from the citizens. This has its own socio-political implications. There is, of course, the other side of the coin: if Lagos cannot raise tax revenue to finance its projects, it is either the projects are stalled or the state piles up more debts to execute them. It’s very tricky — and Ambode must beat a retreat to find a neat balance. He is facing a baptism of fire and how he wades through these challenges is yet another test of his leadership skills. We are watching. Keenly.