The Lagos economy bubble is driven by a number of factors, including:

Rapid population growth

Increasing disposable income

Speculation in real estate and other assets


These factors have led to a surge in asset prices, particularly in the real estate sector. However, there are a number of risks that could lead to a burst in the Lagos economy bubble.

Interest rate hikes: The Central Bank of Nigeria (CBN) has been raising interest rates in an effort to combat inflation. This has made it more expensive for businesses and individuals to borrow money. As a result, there is a risk that demand for assets will decline, leading to a fall in prices.

Currency devaluation: The Nigerian naira has been under pressure in recent months. If the naira devalues, it will make it more expensive for Nigerians to buy imported goods. This could lead to a decline in consumer spending, which would impact the economy.

Global economic slowdown: The global economy is facing a number of challenges, including the war in Ukraine and the COVID-19 pandemic. If the global economy slows down, it could impact demand for Nigerian exports. This would lead to a decline in economic growth, which could impact asset prices.



If one or more of these risks materialize, it could lead to a burst in the Lagos economy bubble. This would likely result in a fall in asset prices, which would have a negative impact on the wealth of businesses and individuals. In addition, a burst in the Lagos economy bubble could lead to a decline in economic growth and job losses.

Addition to this is the winding down of many industrial complexes owned by foreign and local investors that has been plaque by diminishing return on investments

Lagos is the largest city and economic hub of Nigeria, a country that has experienced rapid growth and development in recent years. However, some analysts have warned that Lagos may be facing an economic bubble that could burst and cause serious consequences for the city and the nation. An economic bubble occurs when the price of an asset or a market exceeds its fundamental value by a large margin, driven by speculative demand rather than intrinsic worth. Bubbles are often followed by crashes, when prices fall sharply and investors lose money.

There are several factors that could indicate that Lagos is in an economic bubble, such as:

The rapid rise in property prices and rents, especially in the high-end segments of the market. According to a report by Knight Frank, a global real estate consultancy, Lagos was the second-fastest growing prime residential market in the world in 2020, with prices increasing by 20% year-on-year1. The average price of a luxury apartment in Lagos was $1.2 million in 2020, compared to $600,000 in 20152. The high demand for premium properties is driven by wealthy Nigerians, foreign investors, and multinational corporations, who see Lagos as a gateway to Africa’s largest economy. However, the supply of such properties is limited, creating a scarcity premium and pushing prices beyond the reach of most residents.The over-reliance on oil revenues and foreign exchange inflows, which make the economy vulnerable to external shocks. Nigeria is Africa’s largest oil producer and exporter, accounting for about 90% of its foreign exchange earnings and 60% of its government revenues3. However, the oil sector is subject to volatility and uncertainty, as global oil prices fluctuate due to changes in supply and demand, geopolitical tensions, and environmental concerns. A sharp drop in oil prices could reduce Nigeria’s income and foreign reserves, leading to a devaluation of the naira (the local currency), inflation, and fiscal deficits. This could affect the purchasing power and confidence of consumers and businesses in Lagos, as well as the availability and cost of credit.The growing inequality and social unrest, which pose a threat to stability and security. Lagos is a city of contrasts, where extreme wealth and poverty coexist. According to the World Bank, Nigeria has one of the highest rates of income inequality in the world, with a Gini coefficient of 0.43 in 20194. Lagos reflects this disparity, as some residents live in luxurious mansions and drive expensive cars, while others live in slums and struggle to survive. The gap between the rich and the poor has fueled resentment and frustration among the marginalized segments of the population, who feel excluded from the benefits of economic growth. This has led to frequent protests and clashes with the authorities, such as the #EndSARS movement in 2020, which demanded an end to police brutality and corruption. Such social unrest could disrupt economic activity and deter investment in Lagos.

These factors suggest that Lagos may be experiencing an unsustainable boom that could eventually burst if not managed properly. A possible trigger for a bubble burst could be a global or regional crisis that affects Nigeria’s economy, such as a pandemic, a war, or a natural disaster. Alternatively, a domestic shock that undermines confidence or stability, such as a political turmoil, a security breach, or a policy mistake, could also trigger a bubble burst. The consequences of a bubble burst could be severe for Lagos and Nigeria, as they could entail a loss of wealth, income, jobs, and opportunities for millions of people.

Therefore, it is important for the government and other stakeholders to take proactive measures to prevent or mitigate the risks of a bubble burst. Some possible measures include:

Diversifying the economy away from oil dependence and promoting other sectors that can generate growth and employment, such as agriculture, manufacturing, services, and technology.Regulating the real estate market to ensure transparency, accountability, and affordability. This could include imposing taxes or restrictions on speculative transactions or foreign ownerships; providing subsidies or incentives for low-income housing; enforcing building codes and standards; and improving land administration and property rights.Investing in infrastructure and public services to improve the quality of life and well-being of all residents. This could include expanding access to electricity, water, sanitation, health care, education, transport, and communication; enhancing environmental protection and resilience; and reducing congestion and pollution.Reducing inequality and fostering social inclusion by addressing the root causes of poverty and marginalation. This could include improving income distribution and social protection; enhancing governance and accountability; strengthening democracy and human rights; promoting civic participation and dialogue; and ensuring justice and security.

By taking these measures, Lagos could avoid or minimize the impact of a potential bubble burst

kettykin:

Smh. Reading this just confirmed that you know nada about Lagos. That you and other haters and enemies of Lagos don't know the secrets of the phenomenal progress we made in Lagos gives me tremendous joy.

Lagos is just starting another phase of growth, it will send you into fits and concussion when it hits you.

For those who don't want to miss out, this is the best time to move all your investments to Lagos for as long as you don't hate your Yoruba hosts in Lagos.
God bless Nigeria for ever! Check my signature for free stuffs!

What a lengthy write up

Your analysis is succinct, what you did not include is the activities of land speculators and touts popularly called "Agbero" and "Omo Onile".

huptin:
Your analysis is succinct, what you did not include is the activities of land speculators and touts popularly called "Agbero" and "Omo Onile".

Those were for another day.
But the projections I made is fast becoming a reality, the federal government of apc are now trying to relocate FAAN and cbn to Lagos to force bank headquarters back to Lagos and make Lagos the aviation hub of Nigeria after Abuja has overtaken Lagos.

Lagos without the banks , oil and gas company , telcos and aviation head offices will not be more viable and visible than kaduna

kettykin:


Those were for another day.
But the projections I made is fast becoming a reality, the federal government of apc are now trying to relocate FAAN and cbn to Lagos to force bank headquarters back to Lagos and make Lagos the aviation hub of Nigeria after Abuja has overtaken Lagos.

Lagos without the banks , oil and gas company , telcos and aviation head offices will not be more viable and visible than kaduna

When was FAAN HQ moved to Abuja? 2020. It has been in Lagos all this years.
Over 90% bank headquarters are in Lagos. So what exactly is your point?
You're free to abhore dislike for a region, but trying to rewrite the story is a shameful act and that what's you've dedicated your life for against Lagos and SW in general, not surprised though you inherited it from you ancestors. Keep it up.

Awon haters. Mtscheeeew

seanfer:


When was FAAN HQ moved to Abuja? 2020. It has been in Lagos all this years.
Over 90% bank headquarters are in Lagos. So what exactly is your point?
You're free to abhore dislike for a region, but trying to rewrite the story is a shameful act and that what's you've dedicated your life for against Lagos and SW in general, not surprised though you inherited it from you ancestors. Keep it up.

All the institutions you mentioned were put in Lagos because Lagos was the capital of Nigeria at the time, now Abuja is the new capital of Nigeria and the federal inside should move to Abuja. Lagos is no longer the capital of Nigeria

The only thing that will burst is the dynamite of hatred you carry in your heart. We know those that are praying day and night for Lagos to fall. An unfortunate person will always want others to be unfortunate.

The purchasing power of lagosians is going, this will severely impact on breweries, eateries. , fmcg , services companies etc . If nothing serious is done , Lagos can be said to be at its tail end of existence as a thriving commercial hub and the beginning of its journey to a path of no return

They said worse than this when the FG moved the Capital to Abuja 33 years ago
They thought that Lagos was finished and were laughing

They didn't know that God Almighty had just started with Lagos

kettykin:

The Lagos economy bubble is driven by a number of factors, including:

Rapid population growth

Increasing disposable income

Speculation in real estate and other assets


These factors have led to a surge in asset prices, particularly in the real estate sector. However, there are a number of risks that could lead to a burst in the Lagos economy bubble.

Interest rate hikes: The Central Bank of Nigeria (CBN) has been raising interest rates in an effort to combat inflation. This has made it more expensive for businesses and individuals to borrow money. As a result, there is a risk that demand for assets will decline, leading to a fall in prices.

Currency devaluation: The Nigerian naira has been under pressure in recent months. If the naira devalues, it will make it more expensive for Nigerians to buy imported goods. This could lead to a decline in consumer spending, which would impact the economy.

Global economic slowdown: The global economy is facing a number of challenges, including the war in Ukraine and the COVID-19 pandemic. If the global economy slows down, it could impact demand for Nigerian exports. This would lead to a decline in economic growth, which could impact asset prices.



If one or more of these risks materialize, it could lead to a burst in the Lagos economy bubble. This would likely result in a fall in asset prices, which would have a negative impact on the wealth of businesses and individuals. In addition, a burst in the Lagos economy bubble could lead to a decline in economic growth and job losses.

Addition to this is the winding down of many industrial complexes owned by foreign and local investors that has been plaque by diminishing return on investments

Even though, your views about Lagos are mostly driven by tribal bigotry and hate but next time when you want to write about economic growth over a period of time, you must include figures and numbers e.g Percentage increase, per capital etc

kettykin:
The purchasing power of lagosians is going, this will severely impact on breweries, eateries. , fmcg , services companies etc . If nothing serious is done , Lagos can be said to be at its tail end of existence as a thriving commercial hub and the beginning of its journey to a path of no return

Your doomsday prophecy about Lagos is clearly far from anything related to the subject of Economics.

Nigeria (not just Lagos) is witnessing an economic transition from a phase of socialized policies to free market policies with attendant unintended negative consequences but will eventually outgrow this phase.

Wealth grows wherever men exert energy.

kettykin:


All the institutions you mentioned were put in Lagos because Lagos was the capital of Nigeria at the time, now Abuja is the new capital of Nigeria and the federal inside should move to Abuja. Lagos is no longer the capital of Nigeria

Different banks have their Headquarters in different parts of Nigeria but about 80% have their HQs in Lagos due to economic reasons not about being Capital or not.

The CBN HQs is still in Abuja but have branch offices in virtually all States including Lagos.

FAAN can be wherever they deem fit.