On so many fronts, the Lagos State government under Governor Babajide Sanwo-Olu is blazing the trail and setting model examples for other states to copy.
One particular area where the state is head and shoulders above other members of the sub-national entity is leveraging the Public-Private-Partnership business model to put its economy on a pedestal that is unrivalled.
Take the case of the state government’s partnership with Chinese auto manufacturing company, CIG Motors Limited as a case study. On Monday, 13 July 2024, the state government, through the state-owned corporation, Ibile Holdings Limited, sealed a Joint Venture deal with CIG Motors for the acquisition of 5,000 brand new vehicles to expand the fleet of the state’s e-hailing service, LAGRIDE.
The investment is worth a whopping $260 million.
In the first phase of the deal, the State will take delivery of 2,000 units of the new vehicles, while the rest are to be delivered in tranches. The new fleet will have 1,000 electric vehicles.
This, more than anything else, demonstrates the commitment of the state government to reducing dependence on fossil fuels and pruning the carbon footprint.
The newly signed agreement was not the first. In 2022, the state government launched its first LAGRIDE initiative with 1,000 brand-new cars and mini-SUVs, courtesy of its partnership with the Chinese company, which has established a multi-billion-naira plant at the Ogba area of Ikeja.
The new investment deal, Sanwo-Olu said, would further enhance efficiency and elevate smart mobility in the e-hailing sector. The vehicles, he disclosed, will be tailor-made for Lagos terrain to operate on low carbon emissions, improved technological interaction and energy transition.
This initiative was part of the Sanwo-Olu administration’s vision to transform and modernise public transportation by giving the State an integrated urban transit system as a sustainable alternative to outdated vehicles being used for transportation.
Sanwo-Olu said: “This is a transportation solution that we are developing to meet all our citizens’ needs to commute safely and comfortably within the metropolis. We are using our investment arm as a vehicle to execute what will become a successful Joint Venture (JV) partnership between Lagos State Government and CIG Motor Company Limited in the acquisition of 5,000 brand new GAC vehicles for LAGRIDE initiative.
“The partnership with CIG Motors started two years ago with 1,000 brand new cars and we have seen the benefits to our people in terms of job creation and economic empowerment. We are set to enhance the scope and expand the fleet in order to extend the e-hailing service to other parts of the State.
“Introduction of electric-powered vehicles into the fleet is to change the narrative. We will begin to see a drop in carbon footprint. This demonstrates our commitment to energy transition towards sustainable energy sources”.
The partnership, according to the governor, was not only about smart taxi and e-hailing taxi services, it would also kick-off carpooling services, chauffeur services and tech-driven logistics services.
Other benefits of the partnership as listed by the governor, include enhancing safety, improve turnaround time and digitally-enabled means of public transportation.
While expressing satisfaction that the relationship with the automobile company had been mutually-beneficial, the governor urged other private players in the transportation sector to key into the market and initiate schemes that would enhance mobility in the State.
“We will be seeing improvement in operation, advancement in technology, improved market share, extensive research and rapid movements. We will be seeing Lagos living up to its potential as a city operating an international standard, environmentally sustainable and smart mobility system deserving of its status. We are happy with the investment decision we are making today. We believe Lagos and its residents will reap the benefits of cleaner and better mode of transportation”, Sanwo-Olu said.
Commissioner for Transportation, Mr. Seun Osiyemi said the deal would help LAGRIDE meet the increasing demand and fulfilment ratio of customers, while also improving Fintech support solutions. Aside creating more jobs in driving, maintenance and administrative roles, Osiyemi said the scheme would boost the local economy with increased accessibility, thereby improving the transportation systems.
“This is an investment in modern and sustainable transport solutions, in furtherance of the state government’s efforts in actualising a safer, cleaner, faster, and digitally-equipped transportation system under the THEMES+ Agenda”, the Commissioner said.
From all indications, the latest sweetheart deal between the state government and CIG Motors looks sustainable.
On 24 October 2023, the governor commissioned the CIG Motors assembly plant located on WEMPCO Road in the Ogba-Ikeja axis. The inauguration of the fully-equipped automobile assembly plant was held just two years after the state government signed an agreement with the Chinese firm on the project.
Ahead of the formal opening of the plant, 2,000 units of brand-new GAC vehicles had been successfully assembled at the facility. The plant was built with production capacity to assemble 5,000 units of new vehicles yearly in the first phase, while generating thousands of direct and indirect jobs. The facility will be jointly run by the state government and its partner for the production of different classes of brand-new cars.
The establishment of the Vehicle Assembly Plant in Lagos was part of the bilateral agreements reached by the Sanwo-Olu administration and Chinese Investors’ Community during the governor’s business trip to China in November 2019.
On the accomplishment, Sanwo-Olu said the commissioning reflected the “promising synergy” between international partnerships and local talent, stressing that the development underscored Lagos’ openness to investments that would foster job creation, skill development, wealth creation, and entrepreneurial opportunities.
He said: “Today, we applaud a remarkable milestone of assembling 2,000 brand new vehicles right on Lagos soil, as our vibrant city now hosts a thriving hub of automotive excellence.
“The opening of this Vehicle Assembly Plant is a glowing emblem of our state’s openness to investments that foster job creation, skill development, wealth creation, and entrepreneurial opportunities. The milestone is not merely a numeric achievement; it’s an epitome of multi-sectoral progress that stands to benefit Lagosians.
“The ripple effect of this investment extends far beyond the automotive sector. It has ushered in a new dawn of employment, providing our industrious youths with well-deserved jobs, thereby significantly reducing unemployment in Lagos.
“The skill transfer and technical training programmes initiated by CIG Motors have empowered many unemployed individuals, arming them with the requisite skills to thrive in today’s competitive job market”.
This initiative is nothing short of visionary. Through increased economic activity, supply chain development and ancillary businesses, wealth is being created and evenly distributed among Lagosians. This synergy will not only provide affordable and quality transportation for Lagosians but also will open up a plethora of entrepreneurial opportunities for many.
The Completely Knocked Down (CKD) factory, which spans 35,000 square metres, has not only raised the quality of life and standard of living, it has crashed the cost of brand-new GAC vehicles in local markets and also reduced dependence on second-hand vehicles imported from overseas.
It is not by happenstance that Lagos leads while others follow. It is much more of a committed and visionary leadership, which Sanwo-Olu is demonstrating relentlessly and unabashedly.
