Lagos’ waterfront strategy shows infrastructure, not taxes as path to wealth creation

At a time when Nigerians are grappling with rising living costs, shrinking disposable incomes and persistent inflationary pressure, governments at all levels must rethink how they fund development. The reflex option of raising taxes, levies and fees may appear convenient, but it often deepens hardship, pushes up prices of consumer goods and stifles economic activity. Against this background, the evolving approach of the Lagos State government to waterfront development offers an instructive alternative, which is building infrastructure that creates wealth sustainably, rather than extracting more from already burdened citizens.

The state’s decision to adopt a revenue-sharing model for waterfront and island developments marks a significant philosophical shift. As explained by Dayo Alebiosu, commissioner for waterfront infrastructure development, Lagos is moving away from one-off payments for reclaimed land toward a framework that allows the state to participate in long-term value creation. In simple terms, instead of cashing out early and cheaply, the government is choosing to invest patience, planning and infrastructure to reap continuous returns over time.

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This approach exposes the folly of short-term thinking that has long plagued public asset management in Nigeria. In the past, vast tracts of reclaimed land could be handed over for a few billion naira, only for private developers to make multiples of that amount within a few years. Alebiosu’s example of land appreciating from about N1 billion per 1,000 square metres to N4.5 billion in just two years is a clear reminder of how much public value was previously lost. By retaining a stake in future earnings, Lagos is effectively saying that public assets should work for the public, not be traded away for quick cash.

 “The planned transformation of the Odogun Waterfront in Kosofe illustrates this multiplier effect clearly. Designed to deliver about 4,000 housing units, the project is not just a real estate venture; it is an economic ecosystem in the making.”

More importantly, this strategy aligns with a broader economic truth that infrastructure creates wealth, while excessive taxation merely redistributes existing income, often inefficiently. When the government invests in roads, housing, jetties, drainage and transport infrastructure, it unlocks productivity across multiple sectors. Construction activity alone generates jobs for artisans, engineers, suppliers, transporters and informal workers such as food vendors. Once completed, such projects stimulate commerce, raise property values, attract private investment and expand the tax base organically, without punitive tax hikes.

The planned transformation of the Odogun Waterfront in Kosofe illustrates this multiplier effect clearly. Designed to deliver about 4,000 housing units, the project is not just a real estate venture; it is an economic ecosystem in the making. During construction, thousands of livelihoods will be supported. After completion, the area is likely to experience increased commercial activity, higher land values and improved urban vibrancy. All of these translate into steady, broad-based revenue for the state over time, rather than a single fiscal windfall.

The same logic applies to the newly approved Oworonshoki Waterfront project. Reclaimed land that was once threatened by illegal sand theft is now being repositioned as a structured economic asset. This underscores another critical benefit of infrastructure-led wealth creation, which brings order and regulation. Well-planned development reduces illegal activities, improves environmental management and enhances public safety. In contrast, over-taxation in poorly regulated environments often drives economic activity underground, reducing compliance and worsening governance outcomes.

Lagos’ introduction of innovations such as floating platforms for jetties further reinforces the case for infrastructure as a revenue engine. Efficient water transport reduces pressure on roads, cuts commuting time, lowers fuel consumption and improves overall productivity in a megacity notorious for congestion. These gains, while not immediately visible in tax receipts, ultimately reflect in higher economic output and more resilient public finances.

There is also a political and moral dimension to this debate. Citizens are more willing to support governments that are seen to be creating value rather than imposing pain. Taxes are more acceptable when people can clearly see functional infrastructure (roads that work, housing that is affordable, transport systems that are efficient). On the other hand, frequent tax increases in the absence of visible development erode trust and legitimacy. In this sense, investing in infrastructure is not just economically sound; it is socially stabilising.

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For Nigeria more broadly, the lesson from Lagos’ waterfront strategy is clear. States should focus on identifying and developing their unique assets (land, minerals, tourism sites, agricultural value chains) and invest in the infrastructure needed to unlock their value. This approach expands the economic value instead of fighting over slices of an already strained one. Taxes should be the outcome of growth, not the primary driver of revenue.

As Lagos looks toward 2026, the promise of its new island revenue-sharing model lies in its potential to fund roads, housing, jetties and other public goods without worsening the cost-of-living crisis. By treating infrastructure as an investment rather than an expense, the state is charting a more honourable and sustainable path to wealth creation. In an era of economic pain, that distinction matters, and it is one other states would do well to emulate.