Reform in Lagos - PPP Opportunity

Lagos is moving from rhetoric to execution on water-service reform. In August 2025, the State convened multi-stakeholder sessions to explore a pilot public-private partnership for Lagos Water Corporation (LWC), framing PPP as a way to attract capital, upgrade plants and improve reliability for more than 22 million residents. The administration’s messaging has been explicit: this is not a hand-off, but a collaborative mechanism to scale supply with technology and performance guarantees. The public briefings were organised with sector actors, including WaterAid Nigeria, and positioned as the start of a phased reform path rather than a single transaction.

The direction of travel precedes August. Earlier in the year, Lagos announced a memorandum of understanding with a financing and EPC consortium to expand, rehabilitate and build waterworks—an MoU that triggered civil-society scrutiny around transparency and tariff impacts. Regardless of the politics, the signal is unmistakable: the State is opening the door to structured private participation to accelerate production and distribution, and it will be judged by measurable gains in access, reliability and fairness. For operators, financiers and technology partners, this creates a near-term window to package bankable, loss-cutting projects that show early wins and build public trust.

Lagos has attempted upgrades before, but three realities make 2025 a real inflection point. First, the demand curve is unforgiving: rapid urban growth and chronic under-investment leave many households dependent on boreholes, tanker deliveries and sachet water, with all the health and equity risks that follow. State communications now frame PPP as an instrument to reduce that dependence and stabilise potable supply, not an ideological end in itself.

Second, the administration has begun to socialise a phased approach - stakeholder engagement, pilot service areas, and technology-driven O&M - rather than a “big-bang” concession that stalls under its own weight. That choreography matters because it creates room for learning, transparent KPIs and mid-course correction. Third, national and regional conversations about non-revenue water (NRW) have become more concrete. Elsewhere in West Africa, regulators track NRW in the 40–50% range and publish benchmarks, sharpening the case for district-metering, pressure management and commercial-loss controls from day one in Lagos.

Officials have described the PPP as a collaborative mechanism to scale production capacity, improve reliability and deliver sustainable service quality. Read literally, that points to transactions that combine rehabilitation of existing assets with targeted new builds, underpinned by measurable service obligations and tariff frameworks that pass a fairness test. It also points to a governance model where the State retains a policy and oversight role while private partners bring capital discipline, modern O&M and customer-service tooling. Media and policy commentary around August confirm this framing, even as advocacy groups press for greater transparency in procurement and public consultation. The practical takeaway is to arrive with bankable structures, not just slogans: clearly scoped pilot zones, verifiable baselines and risk-sharing that regulators, lenders and citizens can understand.

The public conversation will continue to be contested, as it should be in a sector as sensitive as water. But for credible consortia and specialist suppliers, the present window is unusually clear: help Lagos prove that a PPP can cut losses, add safe capacity and improve service for low-income users without price shocks. That means committing to evidence from the first 100 days, and designing contracts that reward measurable performance, not glossy promises.

Around the world, reform efforts rise or fall on NRW. West African comparators underscore the stakes: Ghana Water’s national NRW has hovered well above desirable levels for years, with recent figures and regulatory briefs citing values in the mid-40s to low-50s percent despite interventions. Those numbers are not Lagos’s, but they illustrate a common trap—investing in production without taming the leaks, theft and billing gaps that make new litres disappear. In Lagos, the first chapter of any PPP must therefore be systematic loss reduction, not just expansion.

Technically, the recipe is familiar but easily mishandled. Districted pressure and flow, honest baseline audits, meter normalisation, smart meter pilots where connectivity is strong, and commercial clean-ups that remove “unknown consumers” from the shadows. Financially, the prize is twofold: opex falls as pressure is rationalised and leak bursts drop; revenue rises as water that was already treated finally reaches paying customers. Politically, NRW reduction is the most defensible early win because it demonstrates stewardship of existing capacity before asking citizens to underwrite more.

Bankable water PPPs are not born from spreadsheets alone; they are won by de-risking what matters to lenders and the public. Lagos can help itself by publishing a clear tariff and subsidy stance for pilot zones, adopting standard performance-based payment mechanisms, and aligning reporting with proven frameworks from earlier Nigerian and World Bank-supported urban water reforms. Private partners, for their part, need to bring code-ready engineering packages, transparent O&M cost models, and ring-fenced consumer-protection measures for low-income areas. The record of national water-sector reforms shows that credibility compounds where performance, data and predictable contracts meet.

International comparisons are instructive. European utilities facing leakage mandates and AMP-style investment cycles have learned to link capex to verifiable outcomes, and to socialise change through open dashboards and independent audits. None of that is culturally unique to Europe; it is a discipline Lagos can adopt wholesale, adapted to local realities and price sensitivities. The message to financiers is simple: this market can produce predictable cash flows when technical baselines are honest and governance is stable.

Every Lagos resident has a stake in water reform, which is why the process must be legible. The State’s recent stakeholder engagements are a step in the right direction, but the bar will rise as contracts move from concept to award. Publishing pilot-zone baselines, service targets, complaint-handling standards and quarterly NRW dashboards will do more for trust than any press release. So will explicit protections for vulnerable users and a tariff path that pairs efficiency gains with gradual, predictable adjustments. Media coverage shows both enthusiasm and scepticism; the best answer to both is evidence.

Europe’s regulatory climate offers a useful mirror. As utilities there grapple with stricter leakage and quality enforcement, the operators that keep the public on-side are those that show their work - publishing methods, errors and fixes rather than just outcomes. Lagos can borrow the same muscle memory: radical clarity about what is broken, what is being tried and how success will be measured. That stance not only calms politics; it also attracts better bidders.

Our consulting approach in West Africa is relentlessly practical. We start with a crash-proof 100-day plan that establishes an NRW baseline, districts priority zones, fixes pressure, normalises meters and cleans customer records. We pair that with an “evidence pack” shaped for lenders and civil society: district schematics, data definitions, and weekly loss-reduction logs that can be audited. We also bring programme discipline from European contexts - performance contracts tied to real-time dashboards and field-service playbooks—translated to Lagos’s grid, cost and connectivity realities. The aim is not to sell bigger plants on day one, but to recover water already paid for and build the credibility to finance the next stage.

On governance, we help design complaint and redress mechanisms that are quick, fair and measurable, and we align consumer comms with the realities of Lagos’s media ecosystem so updates reach people where they actually are. On compliance, we assemble the documentation regulators expect—quality controls, packaged-water standards where relevant, and safety protocols—so new service areas are audit-ready. Investors, officials and citizens all want the same three things: less waste, more reliability and fewer surprises. That is what a disciplined, PPP-ready, loss-cutting programme in Lagos can deliver.