BLOOMBERG
December 18, 2012
Draconian Measures:
Lagos Governor Babatunde Fashola has faced criticism for some measures considered draconian and detrimental to the poor, such as restricting the movement of motorcycle taxis, imposing tolls on a key city highway and partly demolishing the waterfront slum of Makoko. The government plans to build the Makoko residents a new, safer neighborhood with utilities, he said.
“These people are expendable to them,” said Felix Morka, executive director of the Social and Economic Rights Action Center, which provides the Makoko community with legal advice. “If the government has its way this place won’t exist, maybe within five to 10 years it will be glass houses, penthouses.”
Fashola, a member of the opposition Action Congress of Nigeria party, may use his success in Lagos as a platform to bid for the presidency of Africa’s biggest oil producer and most populous nation, said David Cowan, a London-based Africa economist at Citigroup Inc.
"Things have definitely changed for the positive,” said Cowan, a frequent traveler to Lagos for more than a decade. “I’d put a pretty high percentage that he will use Lagos as a platform to try and run for office and I think that would be very good for Nigeria.”
Presidential Speculation:
Fashola bats away the speculation. “President of FIFA?” he said, referring to soccer’s world governing body. “Still have a lot of work to do here.”
The state needs about $5 billion of infrastructure investment annually over the next 10 years to make up a decade and half of neglect under military rule that ended in 1999. Fashola’s administration is now collecting taxes from three million people in the state, compared to about 500,000 people before his tenure. That’s still five million short of the state’s estimates of who should be paying, he said.
The state sold 80 billion naira ($507 million) of debt in November, its biggest and third issue in six years, to fund developments including the urban rail system that needs about $1 billion to complete. The 7-year notes were priced with a 14.5 percent coupon. Yields on Nigerian federal government 16 percent bonds due 2019 have dropped 67 basis points this month to 11.87 percent, according to data compiled on the Financial Markets Dealers Association website.
The government is in talks with the World Bank and other organizations for additional financing, including a debt sale, to complete the rail project, said Fashola.
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