Policy Position about the TRANSPORT LEVY imposed by the Lagos State Government

There are no specific data to back this claim but a cursory look at the statistics of vehicles on Lagos Roads will let one know that the informal transport sector in Lagos State alone is worth more than 365 Billion?Naira per annum (Almost 1 Billion Dollars) - Informal Transport Sector Operators are Demand Responsive Transporters (DRT) that adapts services instantly for the right price based on real-time market and demand analysis.

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Recently, the Lagos State Government introduced an N800 ($2 approximately) daily LEVY to be paid by operators within the State's Informal Transport System, the Lagos State Informal Transport Sector is one of the major fabrics that define life in Lagos State, you cannot miss them even as a first-timer to the STATE, they are the engine and anchor that drives commercial, personal, and financial activities in the state.

Despite the important role they play, they are a major strain on public infrastructure and we know that our structured State-led Tax System doesn't capture them as they are informal operators who act as driver-owners or in some cases, where they operate a drive and retire daily revenue model of indirect ownership. They are never captured within the formal tax bracket.

It is extremely difficult to design a one-fit-all approach of policy or regulation to manage an informal sector as large as the one Lagos State has, lest, we forget that the National Union of Road Transport Workers (NURTW) are the biggest beneficiaries of the BILLIONS of NAIRA in revenue the Informal Transport Sector generates per ANNUM as this UNION mandates that all operators within this system pay a daily informal tax to operate freely within the state, these monies are paid at almost every major bus-stops, junctions, or loading bays, and in a day, these operators can pay multiple informal taxes to different touts that manage the collections process on behalf of the NURTW.

I commend the Lagos State Government for taking this first bold step in deriving value from the INFORMAL TRANSPORT SECTOR - the thought or fear that transportation costs will increase exponentially is a false alarm as these drivers already pay enough to warrant an increase but like I said at the beginning, they are a demand-responsive sector so if they mostly charge high transport fees, it will only be when they are in their peak periods, outside peak periods, people will mostly have cheaper and more affordable options to go about their daily lives.

What can the Lagos State Government do to CONSOLIDATE its REVENUE-GENERATING and POLICY REGULATION STRATEGY?

a) They should ensure efficiency in COLLECTIONS, if possible, outsource to a FINTECH company that can issue TICKETS electronically as DRIVERS pay. This will block LEAKAGES.

b.) if the Lagos State does not have one, they should introduce an ELECTRONIC DATABASE for all DRIVERS and operators within the INFORMAL TRANSPORT SECTOR - basic information like BVN, NIN should be made MANDATORY for all OPERATORS within the SECTOR. Any default should attract a FINE or STRAIGHT IMPOUNDMENT of VEHICLE.

C.) The idea that OLD RICKETY BUSES or vehicles be cleared away for new modern buses should be discarded, just like how uber and bolt has dominated the quick-ride and taxi economy where old drivers are forced to jump ship to these tech-driven platforms, is the same way government should seek ways to work with the private sector in hand-delivering brand new medium and small-sized buses to drivers in the state, once these buses are more visible and appear more appealing, it becomes easy to phase out old rickety buses and vehicles because the demand will be tilted against them.

d.) I cannot emphasize this enough, the Lagos State Government should continue to invest in our road infrastructure in expanding access roads, repairing worn-out highways, and ensuring that new roads network are added to the existing ones. This will aid and ease the movement of people and reduce the cost of seating in endless traffic.

e.) Connecting the INFORMAL TRANSPORT sector to the NEW RAIL LINES being built will be a MAJOR WINNER in the LONG-RUN as daily commuters are prone to repeat patronage if the service saves them time and provides comfort.

f.) There is a lot of deciphering about the Informal Transport Sector in Lagos State but the truth is that all of these issues cannot be solved with one-fit-size approach regulation or policy alone, continuous engagement with stakeholders, and seeking for ways to attract more private sector involvement is the way to go, you cannot cut off NURTW but their excesses can be curbed, that union seats on BILLIONS on NAIRA in informal tax, they will never give that up- I WON'T.

Share your added thoughts with me about this write-up and what you think about the Lagos State NEW LEVY on the Informal Transport Sector at [email protected]

Elda is a Resident Policy Fellow at the Nigerian Global Affairs Council (NiGAC) - The NiGAC is a non-partisan policy think-tank that simplifies government policy positions whilst analyzing, designing, and advocating for citizen-oriented policies that serve national development.