C40 Good Practice Guides: Lagos - Private sector participation

Summary

The city of Lagos, due to its position as Nigeria’s commercial nerve centre, has continued to experience rapid population growth (projected at 6-8% per annum), reaching over 21 million people in 2014.^xix This results in increasing waste generation, currently estimated at about 10,000 metric tonnes/day. Over the last decade, the existing Private Sector Participant (PSP) programme for waste collection in Lagos was established under a franchising arrangement where PSPs/SMEs were duly licensed for collection activities based on ward distributions across the State. However, the combined effects of poor cost recovery on operational overheads, low investment opportunities as well as return on investment, lack of public compliance with waste bill payments, among other market dynamics, resulted in operational deficiencies and the attendant backlogs across the city.

While it was necessary to revamp waste collection services through public education to create the right attitude and receptiveness towards individual responsibility, a more drastic intervention was required to overhaul existing practices for improved service efficiency.

Results

The Lagos State Government, through the Lagos Waste Management Authority (LAWMA) guided by a 10-year (2005-2015) market development strategy, facilitated finance and funding mechanism support for PSPs in collaboration with local banks, providing creditworthiness instruments for access to capital markets. Privatisation models and cost recovery plans for different socio-economic groups/areas within the city were also defined to assist PSPs to recoup capital investment and support debt repayment schemes for collection vehicles procured through government intervention. Further assistance was provided to develop public awareness and engagement activities to foster compliance from local communities. Government subsidy and debt buy-back were also provided for PSPs operating in low-income areas.

The result was an increase in vehicle availability of over 800 trucks (100% increase) which has led to a recorded increase of over 60% in collection service efficiency, and about 55% in cost recovery, since 2005, with projections for further increase based on market potentials. Employment opportunities are being enhanced through the expanded participation of the private sector/SME in waste collection. Hence, the Lagos (waste collection) model is being adopted as a benchmark to improve collection efficiency in Nigerian/West African cities.

Reasons for success

Building on the existing legislation as well as policy and regulatory instruments available at both national and state government levels, LAWMA adopted the ‘PSP Handbook’ that sets out specific criteria/preconditions, and operating guidelines while also serving as a basis for performance evaluation for private sector (SME) participation in the collection and transport of MSW within the city of Lagos.

Technical assistance for local and overseas training for the PSP/SME representatives were facilitated to bridge knowledge gaps and enhance competency development in the sector. Institutional support was also rendered through LAWMA as a government agency to foster transparency and fairness in dispute resolution between PSPs and client entities.

When/why a city might adopt an approach like this

Cities with vast population aiming to optimise waste collection and cleanliness across different socio-economic regions/areas while ensuring availability of required vehicle/infrastructure may adopt the Lagos approach, which also affords opportunity for economic growth through increased SME/private sector involvement, and attendant job creation. 

C40 Good Practice Guides

C40's Good Practice Guides offer mayors and urban policymakers roadmaps for tackling climate change, reducing climate risk and encouraging sustainable urban development. With 100 case studies taken from cities of every size, geography and stage of development around the world, the Good Practice Guides provide tangible examples of climate solutions that other cities can learn from. 

The Sustainable Solid Waste Systems Good Practice Guide is available for download here.  The full collection of C40 Good Practice Guides is available for download here.  

All references can be found in the full guide.