Public Private Partnerships and the Informal Sector

Public Private Partnerships and the Informal Sector

Lagos State government increasingly ventures into Public Private Partnerships to provide infrastructure in forms of roads, waste management, water supply; even complete residential and commercial “city” projects are outsourced. A very controversial development is the rebuilding of open markets by private developers disrupting decade old economic and social patterns in the informal sector

 

Creator: Deji Akinpelu. All rights reserved.

The Nigerian state as a creation of British imperialism for the maximum exploitation of local resources in the service of imperial interests, is a very violent state with over emphasis on law and order and the coercive apparatuses created to enforce it with scant concern for social service delivery. The tragedy is that over fifty decades after political independence, the Nigerian state remains essentially predatory. Particularly since 1986 when the military regime introduced the Structural Adjustment Program (SAP) as a way out of the balance of payment crisis bedeviling the heavily import dependent economy, various neo-liberal policies have been implemented that whittled out the nascent social welfare services that were building up in the mismanaged oil boom 1970s. (“From Prebendalsim to Predation: The Political Economy of Decline in Nigeria,” The Journal of Modern African Studies 34 no.1 (Mar, 1996), 81).

By 1999 when a new civilian administration was sworn in, the annual Gross Domestic product (GDP) in Nigeria averaged a paltry 2.25 percent with a 67 percent poverty index, meaning eighty million Nigerians were absolutely poor. The economy was characterized by galloping inflation, high unemployment, falling per capita income. The response was to reinvigorate the implementation of neo-liberal policies with intensified privatization of public enterprises and social services, to make the government more efficient and to attract foreign direct investment. It was hoped that privatization would introduce new capital, technical, and managerial efficiency in the privatized enterprises, thereby reviving them, creating new jobs, and adding value to the economy. Through the Public Private Partnerships, the private sector is expected to make available social welfare services, whilst government simply regulates and provides an enabling environment. (The Dynamics of Forced Neo-liberalism in Nigeria since the 1980s by Ekanade, O. V., 2014)

Unfortunately, this rosy picture differs sharply from unfolding reality. Almost two decades after, the report card of neo-liberal reform reveals a new vista of inequality and proliferation of poverty in Nigeria. While all attention has been focused on the federal government, states have also followed the general rule of privatizing public service delivery.

A few well publicized privatizations and Public Private Partnerships in Lagos follow the general pattern of failed promises of service delivery while unexplained waste of public resources have characterized these experiments. The culture of opacity and secrecy of public expenditure management in Lagos is increasing doubts. A prominent example is the 30-year Build, Operate and Transfer partnership between Lagos State government and Lekki-Epe Road Concession Company, LCC, to build an expressway linking the new developments from Lekki to Epe in the east of Lagos. Under the agreement the concessionaire got the approval to introduce toll gates to recuperate the construction costs. During a later construction phase, the concessionaire decided to raise the tolling rate on the first existing toll plaza by 20% while announcing that tolling will commence at a second plaza, just 10 km from the first. Amidst growing public outcry, including an “Occupy Lekki” protest sit-in, government decided to spend an unplanned 25.3 from its budget to buy back the concession right to the road. At the end of the buyback, the concessionaire is now expected to become a quasi-private investment company fully owned by the state government which continues to manage the concession (read more at: http://www.vanguardngr.com/2013/11/lekki-epe-expressway-concession-buy-back-begging-posers/).

The latest privatization of the waste management system is already generating a lot of public unease. A new bill to this effect was passed and signed in April 2017 within the record time of six months but without meaningful public discussion and input. Once the bill became law, a PPP with an international consortium for waste collection and handling of dumpsites was signed, without public tender process or clarification of the contract details. It seems the new arrangement will have far reaching and devastating impacts on the informal waste collection and recycling sector which has been employing hundreds of thousands of people over decades. Government’s attempt to privatize water supply under further opaque PPP arrangements has also drawn widespread public condemnation. Perhaps the most impactful and mysterious of all the PPPs’ have to do with private money involvement in the reconstruction of markets. Numerous traditional markets have been destroyed over the last decade and rebuilding was mostly commissioned to private developers. Information about the ownership of the new markets and the stake of the government in it, is shrouded in secrecy.

Relying mainly on the data provided by the Lagos State Waste Management Authority (LAWMA), there are about 425 markets in Lagos. It is assumed that they harbor not less than 2 million market shops, stalls and sheds providing employment to at least 5 million people, with women and their children constituting at least 70%. The economic and social contribution of these market women to the urban economy can be easily discerned from the array of taxes, levies and rents they pay to the state and local governments as well as government departments and agencies, not to talk of unrecorded levies and extortions by government sanctioned individuals and interests such as the “Iyalojas and Babalojas”. Traditionally, the Iyalojas (head of all women working in a market) and Babalojas (head of all men working in a market) are appointed by the Oba or traditional ruler of a community   to administer the market affairs including collection of taxes from the traders on behalf of the obas. But in modern times government has direct influence in the nomination of traditional rulers and the appointment of the market heads; thus the management and assignment of work spaces in the markets has become much more politicized.  Iyalojas, Babalojas, traditional rulers or local government officials are often compensated with a number of stalls in new market buildings for their approval or collusion in the demolishments. Through their power to assign the few affordable spots in the new buildings they install obedience and fear among their members instead of embracing participatory decision making processes. 

Lagos State government is the first state government which managed to tax the informal sector (see http://ng.boell.org/2015/12/17/understanding-business-streets-lagos). Given the depressed nature of the Nigerian economy and its extremely low labour absorptive capacity, with massive scale lay - offs of workers (mostly men) in the formal sectors of the economy, women as traders and micro producers, play an important role in providing for families. In several focus groups discussions the Federation of Informal Workers (FIWON) conducted with market women from different areas in Lagos, the women identified a number of shortcomings in the management of the markets despite the taxes and fees they have been paying over the years:

It is striking that despite payment of income tax and ‘trade permits’, the most basic municipal services such as  sanitation, refuse disposal, market cleaning, security etc are paid for by the traders. Any time it rains, many traditional markets get flooded and muddy. Traders also make their own arrangement for private run crèches for their pre-school children. It is disheartening that the absence of basic municipal services often provide the ready excuse for destroying these markets in the name of redevelopment.

From the different accounts of the traders, it appears that the various government agencies especially the Kick Against Indiscipline (KAI) set up under the Ministry of Environment specially to deal with street vendors and ‘illegal markets’, are licensed to indulge in indiscriminate arrests, extortion and detention of traders, waste pickers and artisans. They work closely with the Lagos State Environment and Special Offences Task Force, a notorious armed paramilitary agency. Arrested traders have their wares confiscated and are made to pay various sums of money while those unable to pay end up in detention, tried by ‘mobile courts’ which often impose financial penalties. Those unable to pay are sentenced to between three and six months jail terms. Transport workers face similar ordeals in the hands of the Lagos State Traffic Management Agency (LASTMA) cadets and the Police. They are also alleged to subject market women and female street vendors to sexual harassment. Most disheartening is the fact that traders evicted from their markets and forced to operate behind the demolished, fenced off markets are subjected to constant harassment and extortion by the multiple, uniformed operatives of the different agencies and enforcement paramilitaries of the Lagos state government.

Traders lack awareness of basic health and safety issues associated with their work. Lagos markets tend to be choked because of the need to maximize every available space to accommodate more traders, badly lit and can be very dirty. Women vending close to major roads are exposed to accidents, sickness, stress and psycho-social pressures; waste pickers to chronic health hazards through infections, welders to blindness through oxy-acetylene flames, spray painters to bone marrow cancer as a result of exposure to naked chemical sprays, hair dressers to the risk of HIV/AIDS infection etc, etc. A carefully designed occupational health and safety training appropriate to each sector will go a long way to mitigate these problems.

Nigeria holds the unenviable record of having the highest maternal mortality rates in the world with over a million death of under-5 children recorded annually. Given the fact that the informal economy, especially the petty trading and market vending end is generally characterized with very low income and poor awareness of hygiene, and overwhelming poverty which makes it difficult for most women to access basic healthcare, it is safe to conclude that most of the recorded maternal and children mortality actually affect poor market and street vendors more. Lagos state’s heavily monetized healthcare delivery system and the highly formalized private health insurance schemes simply do not work for these women traders who are forced to patronize quacks and the unregulated traditional medical therapies with attendant tragedies.

Market women complain bitterly about their ordeal in the hands of the usurious Micro Finance Banks (MFBs) whose interest rates range from 120% to 240% per annum. Known as ‘komu le lantern’ in Lagos literally meaning ‘your breasts on the fire’ signifying the torture of having to endure the exacting demands of these ‘banks’ who collude with law enforcement agents to detain loan defaulters indefinitely until relatives can pay back the usurious loans with interests, confiscate all the wares of defaulters and/or subject them to public ridicule by making them to dance round the markets with horrible self - denigrating songs. It should be possible for the Lagos state government through the Ministry of Commerce as well as the Ministry of Women Affairs and Poverty Alleviation to offer basic bookkeeping and entrepreneurial training to these women apart from providing business loans at reasonable interest rates.

Everywhere, there is palpable fear among traders about imminent eviction and destruction of their markets. Most market women and traders operating in markets have developed a dangerous siege mentality because of the ever present threat of eviction. This state of constant fear has telling effect on the health and well-being of the traders depriving them of the ability to develop long term plans for their businesses which constitutes a major stumbling block for the development of an economy driven in large part by the informal sector.

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