Opportunities for PPP deals in Enugu, a second-tier Nigerian city

By Bryan

I was born in the South-Eastern Nigerian city of Enugu, with a population of about 3 million, and several other significant features:

  • A hilly terrain (Enugu means “hilltop”)
  • A rich bed of natural resources, specifically coal
  • A relatively homogenous population, a direct result of Enugu’s location in the Igbo tribe-dominated South-East of Nigeria
  • An up-and-coming movie industry scene (Enugu has been called the center of Nigeria’s burgeoning ‘Nollywood’ film industry’)

I return to the city around once every two years, and have been able to follow its development from a traditional ‘coal city’ resource-exporter to a diversified city with the makings of top-tier Nigerian city. One of my visions for the city’s future is for it to develop into the central city of Nigeria’s East and a solid rival to the commercial center of Nigeria, Lagos city.

Mezu - Enugu

Enugu hilly terrain

Mezue - roads

Enugu roads

The good news is that Enugu’s current governor has shown a strong appetite for long-term infrastructure investments to help transform the city into a tier one city. In the context of the Sustainable Cities course, I see several opportunities for private sector involvement in Enugu:

  • Roads: Enugu’s roads have already seen massive transformation in the past 5 years with some major roads widened to double lanes and new roads constructed into rural areas. As the government accelerates this rollout there should be space for expertise and capital from private players, especially in the more difficult terrain in the hilly outskirts of the city.
  • Residential Real Estate: Enugu has been called a ‘civil servant’ city, a reflection of its economy’s reliance on government jobs and its traditional strength in sectors such as education and healthcare. One of the benefits of this status is that many residents of the city have steady incomes and are willing to invest in real estate. In addition, the increasing migration of people from rural areas into Enugu means that there is scope for a public-private partnerships to develop new flats and houses – for both the new buyers and low-cost renters.
  • Rail: Enugu is conveniently located to the trade cities of the South-East, and there are old railway lines (originally constructed by the British) linking the city to the North and the West of Nigeria. These lines have not been maintained and there is a role for a private player to partner with the government to bring them into the modern age.
  • Power: The power sector in Nigeria is nationally regulated, and there is a strong bias towards the petroleum industry (oil accounts for ~70% of the government’s revenue). One of the overhanging political conversations centers on the role of Enugu’s rich coal resources, which are currently less attractive due to pollution concerns. However, there might be some role for clean coal technology providers.
  • Airport: The Enugu airport is being currently transformed into an international airport.

One of the biggest challenges to a PPP deal negotiated with a second-tier developing market city such as Enugu is enforceability. Enugu can learn a lot from Chinese second tier cities, such as Changsha where I visited during an IXP trip last month, and where there is clear alignment between central and local government, yet enough independence at the local level to drive visionary change. Specifically there might be a role for Chinese private sector players to partner with the local government for new projects.