On February 1, 2020, the ban by the Lagos State Government restricting all forms of motorcycles (excluding those used for delivery services) and tricycles from operating in key commercial and residential areas of the state officially took effect. Though well-intentioned, the timing and blanket nature of this ban have left much to be desired.
Among the reasons given by the Lagos State Government for imposing this ban was the rising spate of insecurity in the state. The government has argued that criminality in the state was facilitated by the use of motorcycles, popularly known as Okada, as a getaway means by hoodlums.
Also blamed was the crippling traffic gridlock that most parts of the state have been forced to grapple with in recent times during the morning and evening rush hours. The state government also argues that commercial motorcyclists and tricyclists have contributed in no small way to the state’s traffic malaise due to their wanton disregard for traffic regulations.
If these were the issues, one wonders how the ban would provide a sustainable solution. For instance, these motorbikes often provide easy transportation for commuters in Lagos State, especially during those gridlocks, ensuring that they arrive at their destinations on time and save the economy man-hours that would have been lost in traffic. They also keep hundreds of thousands of low-skilled Lagosians away from criminality by providing them with a legitimate source of income.
If the Lagos State Government really wants to arrest the traffic situation in the state, it should look towards employing more sustainable avenues with less radical socioeconomic consequences. These include the completion of the Lagos monorail project, expansion of road networks, ban on street trading, relocation of roadside markets and motor parks and construction of parks for articulated vehicles.
The real cause of the traffic nightmare currently being experienced in the Lagos metropolis is the population explosion. The state’s existing road networks can no longer cope with the daily influx of vehicles as more and more people continue to relocate to the state from other parts of the country.
Similarly, if it wants to tackle insecurity, it must beef up its security apparatus and change its modus operandi from reactive policing to proactive policing through intelligence gathering. It should also create more employment opportunities that will keep Lagosians gainfully employed by incentivizing the private sector. All these and more should have been put in place before the ban to cushion the socio-economic impact.
Government policy is a major enabler of economic growth around the world, especially in developing countries like Nigeria. The government’s primary role in the economy is to create an atmosphere that enables the private enterprise to thrive through the formulation of business-friendly policies. More importantly, its ability to maintain a consistent and cohesive set of policies over long periods of time by formulating long-term policies rather than short-term, stopgap ones is key to buoying investor confidence.
Investors are attracted to stability, consistency, and predictability and they flee from instability, inconsistency, and unpredictability. Time and again, governments in Nigeria have demonstrated just how easy it is for one administration to overturn the existing policies of its predecessors overnight. The inconsistency of policies scares investors and accounts for the low inflows of foreign direct investment (FDI) and foreign portfolio investment (FPI) into the country.
Investors who backed motorcycle-based ride-hailing startups in the state like ORide (OPay), MAX and Gokada – who are also affected by the ban – would now be counting their losses.
What it means: Other startups operating in the state and the country at large, irrespective of the industries they play in, would now face an uphill task convincing investors to fund them. A trend that may emerge in the Nigerian venture capital space is a preference for small-ticket short-term investments and profit-taking over long-term investments.
By Chinedu Nnawetanma
Nnawetanma is passionate about private sector development in Nigeria. He has contributed to projects and conversions that revolve around improving the ease of doing business, financial inclusion and access to finance of SMEs and job creation in Nigeria. His works have been featured in several leading online and print news media publications within and outside Nigeria.