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Charter Cities Podcast Charter Cities Podcast Episode 9: Creating Livable, Sustainable Cities with Yomi Ademola

In this episode, we discuss what it means to create livable, sustainable cities, the process of building them, and how they fit into the broader regional development of their locations.

Africa is the fastest urbanizing region on the planet. The continent’s rapid population and economic growth demand large-scale solutions. As Africa’s new private city builder – backed by American, Norwegian, British and New Zealand investors – Rendeavour builds cities in the growth path of some of Sub-Saharan Africa’s fastest growing regions. Today’s guest is Yomi Ademola, the country head for Nigeria for Rendeavor, which is the largest urban real estate development company in Africa.

In this episode, we discuss what it means to create livable, sustainable cities, the process of building them, and how they fit into the broader regional development of their locations. Yomi also shares with us what the impact of COVID has been on his business, the importance of blending local capacity with international expertise, as well as how to balance the need for order with the organic emergence of a city in its own right. Links mentioned in today’s episode can be found below the transcript.

Transcript (edited for clarity):

Mark: Hello and welcome to the Charter Cities Podcast. I’m your host Mark Lutter, the founder and executive director of the Charter Cities institute. On the Charter Cities Podcast. We illuminate the various aspects of building a charter city. From governance to urban planning, politics to finance. We hope listeners to the Charter Cities Podcast will come away with a deep understanding of Charter Cities, as well as the steps necessary to build them. You can subscribe and learn more about Charter Cites at Follow us on social media, @CCIdotCity on Twitter, and Charter Cities Institute on Facebook. Thank you for listening.

My guest today is Yomi Ademola. He is the country head for Nigeria for Rendeavour, the largest urban real estate development company in Africa.

Thanks for coming on the show Yomi.

Yomi: Thanks for having me Mark, it’s a pleasure to be here.

Mark: Great, to start, can you tell us a bit about yourself? You have a law degree from Georgetown University and now you’re building cities in Nigeria. What’s the in-between?

Yomi: From an early age, I had an interest in becoming a lawyer. I come from a family of lawyers and judges. The last thing I thought I’d end up doing is being involved in real estate professionally or building cities. Part of my time in the States, which encompassed an undergraduate degree where I studied political science and international relations, and then studying law, my JD, at Georgetown, which had an international law focus, was with a view to getting as much experience and exposure in various fields that I specialize in, which were corporate finance and project finance, so that I could get back to Nigeria and see how I could contribute and fit in professionally.

After Georgetown, I – not withstanding passion for a court room – pursued a career in corporate finance in a big law firm, transitioned to London because the majority of the work that was Africa-focused was out of London or out of Paris for anglophone and francophone Africa. Transitioned into another law firm and ultimately got head-hunted into an investment bank called Renaissance Capital. As you may know, the Renaissance Group, where Renaissance Capital sits, is where Rendeavour was born.

I began the journey back home with the investment bank back in Lagos to set up the platform of the business in Nigeria, and then other cities across the African continent. Ultimately, we spun off from our principal investment arm, Renaissance Partners, into what is today Rendeavour.

Mark: Can you talk a little bit more about Rendeavour? You’re building cities, but what does that mean? What countries do you operate in? What started the division from asset management in Russia to building cities in Nigeria or in Africa. What was that transition like and what is the vision of Rendeavour, what are you actually doing on the ground?

Yomi: Rendeavour is currently the largest private city developer on the African continent. We have a portfolio that’s comprised of over 12,000 hectares of land under development in seven cities, which are in five countries. We have two projects in Nigeria, one in Lagos, the commercial capital, and one in Abuja, the political capital. We have two projects in Ghana, also here in west Africa, in Accra, the political capital, and in Takoradi, the oil and gas hub.

We have our east African flagship project in Nairobi in Kenya, called Tatu City, and also a project in Lusaka, Zambia, called Roma Park, and one in the Democratic Republic of Congo called Kiswishi, which is in the Katanga region. In terms of how we got started, through the principal investment arm Renaissance Partners we made acquisitions across various industries. One of the investments in Kenya, which is our first project, Tatu City, was in a private coffee plantation in East Africa, which is still operational today. It was a significant land holding that included quite a bit of excess land and ultimately a decision was taken to undertake a best use of land analysis, and decide what to do from a productivity perspective, with a portion of this excess land.

The end result of that process was us deciding to go through a re-classification application and process for the zoning of the land, to secure a mixed use or comprehensive development zoning status, and then to undertake the regular cause of data collection and master planning processes, which resulted in us creating a new city-scale project called Tatu City, which was, in the first instance, about 1,000 hectares in size and expanded to present size, 2,000 hectares.

On the back of that exercise, and recognizing the value that had been created on the back of initiating the activity, the actual operations of the master developer arm, we identified and were approached by different parties with opportunities across the continent. Opportunity by opportunity, we engaged in extensive due diligence, site selection, and we grew gradually, country by country. Zambia and DR Congo coming next, and some overlap in Ghana, and Nigeria is the newest member of the portfolio.

Alaro City in Lagos, where I am today, in the Lekki Free Zone, is actually the most recent addition to the portfolio.

Mark: Great, thanks. Can you go into a little bit more detail? You say, you’re building cities, you’ve given a size, the amount of the land is 1,500 hectares to up to 2,000 in Tatu City, but for listeners who don’t really know what it means to build a city, what are the intermediate steps?

Okay, you have the land, and eventually you have 100-200,000 people living there, but walk us through this process of how you think about the build out, how you structure all of the discussions, and the approach that you’re doing.

Yomi: The process for us starts with a site selection process. To go into a little more detail on the thinking and the rationale, so across Africa, we have a number of countries. We identified the countries that we believe, from a macroeconomic perspective, have the right dynamics for us to go in and invest this kind portfolio, with a realistic expectation of a return all the time. Within these countries, we identify the cities, many of which are plagued with the same issues. A significant amount of congestion in the existing built up cities, given the population growth and the rate of urbanization, a lot of people moving in very rapid pace from rural areas to the urban centers, for economic opportunities, and very congested built up urban areas are the result.

We identify parcels of land that have good, clean title. We have to profile the existing ownership, which generally falls into three buckets: owned by the state, the government, owned by traditional host communities, who tend to be collectively the owners of some of the largest amounts of undeveloped land in the jurisdictions that we’re in, and then sometimes we do have a private parties, either a company– for instance, I mentioned Kenya, we acquired a large coffee plantation, which was from a company. So, we partner with or acquire from a company on the back of the extension of due diligence, which looks at, amongst other things, obviously, the root of title, the surety of title.

Because it is a land business title, it’s very fundamental, and that is the title we ultimately be passing onto, in one way or the other, to our clients, and offtakers, and neighbors. We also look at the connectivity of the site, from the perspective of infrastructure, primarily road, electricity, and water, to get a sense for the requirements to catalyze the site, and to create these city destinations in the various states that we’re in. We also look at the strategic positioning or location of the site in terms of direction, and pace of growth, the projections for future public and private development in the axis.

As an example, about eight years ago, we identified the Lekki Free Zone, where we are today in Lagos, as a very strategic location in terms of nationwide distribution. Nigeria, being the largest economy on the continent, and also obviously of the region, we knew that with the coming seaport, which is the deepest sea port in West Africa, and the proposed international airport, that was located in this axis, and with the Free Zone, which was already in existence, an initiative of the state government, which is the largest free zone in West Africa – it’s 16,500 hectares – we knew that something special was going to happen in this axis.

I think when you look at the amount of road and other infrastructure that was either being deployed or planned, so we took a strategic decision to get out there as early as possible, to identify an ideal location in the axis, and then to start the process.

What are the other steps of the process? We go through the regulatory process on the back of extensive studies, feasibility studies, business cases, put together the site specific data collection, topographies, surveys, soil tests, everything, and we work with world class master planners, both internationally and locally, to plan out a city tied into these other contextual pieces of information that have helped us to select the site and tends to end up helping us to take a view on what the immediate focus, in most cases, of the city will be.

I say, immediate focus because we build into our master plans an element of resiliency to allow for adaptability over time and based on the market’s response. In some cases, we end up going full-throttle initially across various uses but maybe with a focus on industrial, commercial, logistics uses and, in other cases, we find that, based on the specific location and the dynamics of the market, we end up spending a lot of time promoting and developing residential development and residential uses for the land.

One thing that is constant is we, as the master developer, retain responsibility and control for two key aspects, which is the infrastructure and the government structure within the constraints of the law of the relevant jurisdiction. For instance, in all of our projects, we are responsible for the roads, all the bulk civil infrastructure of the roads, we provide all the utilities, we create a one stop shop from the utility perspective, which is a key value proposition in our markets where we’re present. From water to potable water to reliable access to water, to reliable access to power, 24/7 power, sewage, drainage, and obviously all the other aspects in terms of connectivity and thought process behind how we position and locate the various uses, sort of a complementary synergistic.

Our residential areas are typically planned to create very livable environments. For instance, our master plan in Alaro City, which we worked on with Cityscape, a local master planning firm, a market leader, and Skidmore, Owings & Merrill, SOM, out of their London office, which is an American firm, and an international firm ultimately, but with origins in the States.

We’re very deliberate about creating, in every residential area, every single residential plot, we have planned such that within a five minute walking distance, you can walk through developments that are located on different land uses, that are targeted at catering for your week-to-week and day-to-day lives – from retail, to education, to green spaces, some mixed-use plots. You should be able to, generally speaking, within five minutes to get to what you need to get to from a week-to-week, livability perspective.

In addition to that, again, speaking to value propositions and livability and sustainability of the live-work-play and investment ethos we have in these cities, we do encourage and promote walking, we have sidewalks, which is not something you see in all of the markets we are in, or if you see them, not regularly. We have cycling lanes that promote cycling and ease of connectivity between places on bike. We tend to provide walking, jogging trails through a connected ecosystem of green spaces. We have over 150 hectares of green spaces, and our project in Lekki here is an example, out of the first thousand hectares.

A lot of time and thought goes into the land use, the initial development focus in terms of top structures and deliberately targeting and working to attract clients, but as a general matter, our cities are mixed use, mixed income, and we are market-led. We follow the demand and we try to meet it as best we can and then we have a very open mindset to what the needs are and the market demands are.

That said, that has to sit side-by-side with the other component, which is the governance structure. We have a prescriptive zoning regime that has a process for appropriate amendment over time, but we do effectively maintain a private development control regime for how things are built. Building material, the height restrictions, and setbacks, what you can use your plot for, to make sure that we maintain value over time for the clients, the neighbors, and for the residual value of the land that is being developed and yet to be developed.

I think for most of our projects, we’ve also been fortunate in that we have either keyed into or have been able to procure either free zone status, free trade zone status, or special economic zone status, which tends to then give us some additional layers of control in coordination with government, and gives us some additional value propositions, particularly in the areas of ease of business, in terms of approvals, in terms of registrations, in terms of registers, registries, and particularly for industrialists, in terms of the relationship to the customs and immigration regime for things like expat quarters, foreign employees, ownership.

Incentives that attract investments such as no duty, no tax, corporate income tax, withholding tax, and mobility. I would say out of our projects in Kenya, in Zambia, and in Nigeria, we have free trade zone status or special economic zone status, and we are in the process of securing special economic zone status in Accra, in Ghana.

Just to add a word about what this ultimately looks like, the typical project, as mentioned, tends to encompass 1,000 hectares, 2,000 hectares, which is about 2,500 acres to 5,000 acres for the listeners that are more familiar with acres. We end up providing roughly providing for and ultimately having 65,000, 75,000 residents and also 30 to 50,000 daily visitors.

Mark: Great, that was very comprehensive. I want to dive in to some of those points you raised but before doing that, let’s go out on a more of a macro scale of view. In the US, you don’t often hear about people building new cities. You hear about it as retirement communities in Florida. What is the demand for new cities in Africa? Why do you think that’s such an attractive market?

Yomi: I think this speaks to the two points raised about the rate of urbanization, which is, I believe, one of the highest if not the highest in the world. Maybe fastest rate of urbanization in the history of the world, in terms of how quickly we have people moving from rural to urban areas, and the nature of where the economic opportunities in the markets are concentrated. When you have that resulting congestion and infrastructure, you see the traffic, it’s hard to go in and fix and maintain existing infrastructure, there is a lot of desire and demand for clean, aesthetically pleasing, organized, orderly, predictable environments in terms of what happens on your plot, what happens on the next plot, in terms of security, even access to land that is supported by services, some serviced land.

It’s something that may sound very foreign to people that are not in these jurisdictions but to be in an environment where it is safe, aesthetically pleasing, there’s access to water, power, ICT, sewage, and you can get significant sized parcels of land, because most of the attractive industrial areas and residential areas, as mentioned, are already taken.

They are under significant demand, there is a lot of congestion in between there and other places. To create locations where you can do your investment, you can live, you can have new and good and better schools, and all within a controlled and aesthetically pleasing environment, is a very fundamental need and demand for a lot of industries and a lot of individuals in these markets.

Mark: How do you envision your cities – for example, Alaro City – fitting into the broader regional development? Lagos, by some projections, is supposed to have around 80 million people by 2100. It is relatively congested, a little bit chaotic, how do you view your developments as fitting in to the broader regional growth patterns?

Yomi: I always make reference to the Africa Rising narrative and most of us within our company, do not see that narrative as a cliché. Given the dramatic and significant improvements in the education status, security, health status of these markets and the people, relatively consistent growth in these markets over the last 20 or so years, and the improvements we’re seeing in governance, and in political process, and political competition, all of these factors being material drivers and underlying the Africa Rising narrative.

Developments like ours can literally house the next wave of growth across the continent, and our hope is that we’ll attract and continue to attract investments and new skillsets. We’ll be creating jobs, we will be facilitating transfer of technology, and we’ll play a role in making Africa a premium investment destination and a force to be reckoned with on a global scale in terms of opportunity.

The role that we play is only one of many roles that will be a factor in this narrative playing out. In our case, we actually are in a very unique and, I believe, advantageous position because Alaro City is, for instance, a pubic-private partnership where we bring the political will and capacity of the state government, which is a very progressive state government, Lagos State government, and we match that with the vision, expertise, and the patient capital and commitment of the private sector investment to a shared goal, which is creating more jobs, attracting more investment, increasing the infrastructure development across the state and the region, and lowering the housing gap. Hopefully we’re able to do this in a way that is responsible, sustainable, and profitable, and in a way that the stake holders, including local communities, can benefit from and key into.

Mark: I think your point about patient capital is an important one, in talking to similar projects across Africa, one of the things that stands out is there’s a variety of different financing models. Some of the projects definitely do have trouble attracting capital. Figuring out exactly how to unleash these capital flows, given the booming demographics, the booming market, is something that you guys have seem to figured out.

But before delving into that, how do you view your developments compared to other new city developments? In Nigeria alone, we can think of Abuja, which was a planned city in the 70s, the capital city, and also cities like Eko Atlantic. Then, if we think back historically, we can think of China’s rapid urbanization, with cities like Shenzhen in 40 years going from practically nothing to being world class cities. Think of Singapore, Hong Kong, Dubai, we can also think of Brasilia as a government-led master planned city. In the US we have Irvine California, private developed city that has about 280,000 residents, with a world-class university.

Where do you look and draw inspiration from? Where do you look and see “Okay, well that might not be something that we want to follow with our developments?”

Yomi: Well, I think we draw inspiration from a number of sources and we have looked at and visited private developments, we’ve looked at PPPs. We’ve also looked at and been inspired by government initiatives, such as new capitals. Like Abuja which you mentioned, you also mentioned Brasilia. Even within our portfolio, no two projects are the same. One thing I have recognized is that one of the things that makes all these projects similar is that there is an appreciation for keying into the vision of a scale, which is a city scale project that can have a critical mass and have an impactful effect.

There is also a commitment to creating a new classification or a new standard, a new quality embracing best of class, and leap frogging in terms of technology, and otherwise where possible. I think that when you look at the nature and the opportunity of the private cities like Alaro, like Eko Atlantic, when one looks forward, we acknowledge the R&D for a while. Significant infrastructural housing gaps, despite best efforts of governments, and even very well performing governments. But when you look at the rate of urbanization and how they’re realistic about the rate of infrastructure development, it’s clear that projects like ours can help bridge the gap.

Whether they’re completely private or combination of private and public state coming together. These new cities, there is already a significant body of evidence, there is proof of concept, that these cities attract, in many cases, much needed investment, including foreign direct investment, including by first time entrants into the market. Our very first client at Alaro City is from an investor with Kenyan, Canadian, and Indian shareholders who have never done any business in Nigeria.

One of the reasons they were able to make a relatively quick decision was because of the attractive demographics and the opportunities that Nigeria, and Lagos State in particular, clearly present. But also because of the credibility of the development on the private side, Rendeavour, and also the platform that was being created in a free trade zone regime. That was very attractive and had to be taken very seriously.

They were able to look at Nigeria through a brand new lens because of the Alaro City platform in the Lekki Free Trade Zone and were able to make some pretty impressive and decisive moves that have seen them create the largest, ready to use therapeutic food production facility in Africa, right here in Alaro City in Lagos. When we look at the amount of investment, amount of technology, the jobs that we can create, they can promote, when we look at opportunities to fast track infrastructural development, and reduce the housing deficit, and create jobs, and a lot of economic opportunities.

I think that the role that projects like ours can play are actually prime examples of how PPPs, public-private partnerships, can work and be catalysts for rapid economic development, particularly in these times, with constraints on government coffers.

Mark: There’s the obvious question of how has the coronavirus affected, how you’ve seen demand, how you’ve seen government engagement? Nigeria is an oil economy, I forgot the exact numbers, but a substantial portion of Nigeria’s government budget is from oil. How has COVID affected what you see on the ground, and how has that affected the demand that you see for your services?

Yomi: COVID and what we’re experiencing on the ground, but also globally, is to my mind, I think, unprecedented. While most industries have felt the impact of this global pandemic, especially when you consider the entire world is slowed down in the last few months, we have been quite fortunate in that the extensive efforts over the last 18 months, this project launched in January 2019, Alaro City launched in January 2019, and we presently have 27 industrial or commercial offtakers in addition to hundreds of residential offtakers.

That is on the back of a very deliberate, targeted campaign to create awareness and is, I think, a testament to the market’s acceptance and response recognition of the offering of Alaro City. When you consider that pre-COVID and through COVID, we have, on average, onboarded no less than one new industrial or commercial offtaker every single month, including every month this year, including during the months of the lockdown, we had a government-mandated restriction on movements.

When you consider that the level of demand for this very fundamental need, or such that on both the residential and the industrial fronts, our transactions kept going and, in one month in particular, exceeded pre-COVID activity. It’s a testament to how much this very fundamental need is not being met in the market. If you consider that Lagos State is the smallest state in Nigeria, in terms of geographic land size, and is also the most populous state in the country, you get a sense of this demand-supply dynamic when it comes to places to live in a dignified manner and the opportunities that people are looking for to set up new businesses, expand more secure jobs.

You know, for us, there’s been also a very responsive and proactive government intervention during COVID. I think Lagos State in particular has shown a lot of leadership and capacity in managing the situation on the ground, and the people of Lagos are very resilient. The industries here are exceptionally entrepreneurial and resilient and I think we have benefited from these factors, which we have always known is what Lagos offers.

Mark: Let’s delve a little bit more into the financing. Building a city has relatively high upfront capital costs from the acquisition of land. Potentially, you could do a joint venture where you aren’t required to do these initial capital outlays and also in terms of providing electricity, potable water, sewage, roads. How have you guys approached these large upfront infrastructure costs, and how are you able to bring the investors onboard, given that Africa is not always the premier investment market for large sums of capital?

Yomi: As mentioned prior, the costs start in pre-acquisition, you know, there’s extensive due diligence, which is costly, to be candid, to ensure that we get off to the right start, on sure footing, which is the essence for everything we do in the land business. In terms of location, in terms of surety of title, in terms of right location of the site. Considerable sums are spent there and, yes, we do have a full spectrum of structures that we’ve participated in, as you’ve mentioned, from joint ventures, public-private partnerships, and outright acquisitions. And even with the partnerships, we’ve done them with the state, we’ve done them with the host community, when you look at our portfolio across the seven projects. “We’ve seen it all” and all  of them involve considerable sums of money, even the joint ventures and PPPs.

I think that for us, to be responsive to your question, we are fortunate that we have a meeting of minds between an absolutely committed group of shareholders, who are incredibly visionary and successful in their own rights, in various walks of life and business. They have a commitment and a will to execute this vision, this business plan we’ve put together on the back of the vision, which goes back many years when the team of investors came together to pursue this business.

Rendeavour has no third-party debt. Our projects are funded by our shareholders. We ultimately execute and also and also fund partially from cash flows, running the business like every other business. But it is clear that to make it through the economic and political shocks that these markets, and all markets over time, present, it really comes down to the vision and financial capacity of the shareholders of Rendeavour.

Mark: You spoke previously about choosing locations and some of the due diligence that went into that. You are operating in some countries that I think, at least from my semi-outsider perspective, are at different stages of development. So Kenya and Nigeria per capita incomes are little bit over $1,500 annually. Both have democracies. And then the Democratic Republic of Congo, which you are also in, is much poorer, and hasn’t been as successful in developing some of these democratic institutions.

What have you seen in terms of operating in these different markets in terms of the ease of doing business, in terms of how effectively that you are able to execute.

Yomi: I think that is an excellent question. I have the fortune of being involved in each and every one of our projects in some way or form, including, in most cases, the early stages in terms of commencement, so I could speak a little bit to this. One of the key – just to get to the upshot, upfront – one of the key factors that I think is a requirement for this type of business and is something that from an early stage we latched onto in Rendeavour, is the need to have a–

This is a something that started in the Renaissance Groups days in the rent cap business, where we were the first international investment bank that was emerging on frontier markets facing to set up full-scale investment banking and financial services platforms on the ground in multiple African cities. Where you would walk in and have the same level of service experience and capacity whether you are in London, in New York, in Moscow, or in Lagos, or Nairobi.

That mindset was carried along into our business, Rendeavour. It is absolutely mission critical for us to have local knowledge, local leadership, local capacity, and local understanding of the various markets we are in because of the differences you highlighted and other differences that are relevant to an effective due diligence exercise. Just for the record, there are markets we have investigated. There are countries we have looked at going into. We have specific sites we have assessed and then not pursued.

It is on the back on this local capacity blended with a very high quality group, a structure, that brings in some of the best financing, real estate development, and execution, minds and resources, that we come together to do something site- and jurisdiction-specific on a project by project basis. So we will find that in countries like the DR Congo, we have considered multiple locations and multiple jurisdictions.

There is a reason we decided ultimately to go for a project located in the natural resource-rich Katanga region, which is a semi-autonomous region of the DRC that has a lot of natural resources, that has a lot of investment in that space, and where we have a project that is, of course, mixed used in nature but initially more focused on the more immediate demand, which is linked to logistics, which is linked to housing and worker housing.

To understand and identify that opportunity comes from putting in the time, and having the right people on the ground, to work with and to pursue the vision. The same thing in Nigeria, many people locally, let alone from outside of the state or the country, were surprised when in 2010 we were talking about the location that we have today, which is widely regarded as a highly strategic and premium location, particularly for industrialists and logisticians.

It is a location that most people did not fully appreciate years ago was actually going to become one of the leading industrial hubs and trade routes in the country. So again, that came about from extensive investigation, research, due diligence, and being on the ground. We are fortunate that, given our origins from the Renaissance Group, we do have a wide platform, an exposure to almost all of these markets that we ultimately went into. I think that is the key factor for us.

Mark: Can you talk about how you get this demand for your products, for your services? Because one of the core challenges that we often think about inside the Charter Cities Institute is getting those first movers. Nobody wants to move to a city and be the first person there because there is no supermarket, there is no grocery store, there is nothing to do at night, there are no jobs, and so getting this critical mass of people in the city is important, because without that critical mass you don’t really have anything.

So how do you think about getting that critical mass of first movers to really jumpstart the amount of activity in an area? Or have you found that this isn’t the right framing for the challenge at all?

Yomi: I think that is the correct framing. I think it is a great question. It is something that, in a very city market-specific environment, we have to address. For us, one of our beliefs is that commerce is what capitalizes growth. It is a fact that people and businesses are two clear drivers of economic development in any city, and if you focus on attracting the right businesses and economic players, and creating the right enabling environment, which includes the right planning and infrastructure, and that includes the right regime, for us our free trade zones and special economic zones, and beyond.

I think of it as creating what I refer to regularly as an “economic heartbeat.” Once you get that critical mass of first movers, typically in the industrial and commercial space, and again, remember the dynamics as an example for Alaro City, where it is hard to find large parcels of land that have good title and can evidence a clear route of title, and that are fully serviced in terms of the fundamentals, of power and water and the rest, to have as an added benefit these tax and duty benefits, and this one stop shop scenario, with a very high standard of security, free zones being areas that are demarcated from the customs territory. There is controlled access and egress. We have focused on the industrial and commercial. You get your critical mass going and it becomes self-propelling.

The ecosystems come in, the bankers come, the residents need a place to stay, they need a place to recreate, and there is an aesthetically pleasing environment, a sufficient environment, it is a livable environment. We do have to be very deliberate in creating that supply for the demand, understanding demand. One thing that people demand, for instance, here is a safe, clean place to take walks. In a non-congested environment without the fumes from generators, without excessive traffic, noise and noise pollution, and other pollution from the exhaust.

The cycling lanes and the sidewalks or walking pavements, which again for other markets they seem almost – maybe considered almost a right. Such an easy aspect of infrastructure to overlook. Here, it is actually a unique value proposition and a unique selling point. So, understanding that about the market and meeting that demand, is able to get the first movers out there quickly.

For business what we found is having the right framework and creating the right administration to implement, not every free zone is effective. Not every free zone is able to facilitate that you would accrue the benefits that are provided under law or regulation. So there is still a lot to be done in terms of the training, in terms of understanding people’s businesses, in terms of smoothing the logistics between port and free zone, and ensuring that people can come and be more profitable and more focused in your location.

How we attract is by being absolutely committed to being best of class, not just in the planning of infrastructure, not just in being aesthetic, not just in our marketing and awareness campaigns, but also in the service side of the business, in terms of customer experience, particularly with respect to the free-zone administration, and how people are able to benefit from their license plate registrations for the vehicles.

That experience is compared to the experience you have in the customs territory. The ease of business and the money – or should I say, the ease of logistics and the cost effectiveness when it comes to the time you spend and the money you spend, to bring in every container into the free zone versus into the customs territory. The speed with which you can secure your incorporation documents for your new company in the free-zone versus the customs territory.

All of these factors constitute a bucket of unique value propositions that we create awareness around and attract those first movers and then it tends to self-propel.

Mark: I definitely want to get into the governance, into the free-zone status soon, but before then, let’s talk a little bit about the urban plan. You said how you have this master plan and it is a little bit dynamic to adjust for changes in demand. One of the kind of discussions in the office that we frequently have is how to balance planning versus the emergence of a city.

If we think about a lot of master planned cities, we look at them and they tend to be a little bit over-planned. Brasilia, for example, it’s not walkable at all. The average commuting time, particularly for poor residents, is extremely high. You can actually go read interviews with the architect. He’s like, “I don’t care if people like it today. The question is, in a thousand years would people look at it as a monument, as this great creation?” Which I think is the wrong kind of framing for cities. You need to think about the residents, the actual consumers of the cities.

But this balancing act, you do want order obviously, but you also want to acknowledge that if you’re engaging in this 10, 20 year development project then what you think what is going to happen might not happen. You have to be able to adjust it in the future. So how do you think about balancing and this need for order as well as the organic emergence of cities in terms of the urban plan?

 Yomi: I think that is another great question. I think we start with the fundamental that, yes, of course, master plans are dynamic. As you said, they’re living and breathing documents, but there must be constraints. Most of the cities and the jurisdictions where we are, most of the cities are, to some degree, being held back by a lack of planning and efficient land use, and also being held back by red tape and regulatory blockages. One of the results is sprawling, fragmented, informal developments, cities that are not very efficient, and are not ultimately very desirable.

We are absolutely committed to proper planning. New cities, especially the ones that we are developing, which are required to address some of the fundamental infrastructural deficiencies found in these cities and on the continent, is a focus for us, that proper planning. One thing I would say is that you learn from your experiences and that you learn from other peoples’ experiences.

This aspect of over-planning is something that was highlighted to us very early, in part of our research, and in part of our work with partners, consultants and the rest. For us it is important, within the context of, your feasibility, your market study, and determining how you are going to kickstart and catalyzing this project to the point we just discussed, about creating that critical mass and catalyzing the cities, but beyond that we are deliberate in building in this aspect of flexibility, to accommodate within the constraints of appearance and the fundamental development guidelines, some aspects of consistency and uniformity. Not frustrating the connectivity of these cities and the fundamental principles of the master plan we create in the beginning.

We also have to be very realistic and open to external factors beyond our control. Which is government policies, the realities of trade and trade routes within the region, or the country. And there are so many things, including consumer behavior, that will ultimately impact what we do and where. We actually just build that into our business plan. We build that into our mindset, but we are also very much of the opinion that the value that we offer includes a predictability that you can expect when you come to our cities. So, you know, we plan, we revisit plans, we re-plan as required, but we stay true to the fundamental principles of a well-done initial master plan.

Mark: You operate in a lot of markets that have currencies that might not be entirely stable. Zambia, for example, is in the middle of a debt crisis. I haven’t looked at the statistics recently, but I am sure the currency is depreciating relatively rapidly. So how do you adjust for those risks? I obviously don’t know what you receive investments in, but a lot of times, in emerging markets, the investments are denominated in US dollars.

Then if there is a local currency crisis, then you are stuck with relatively high debt liability compared to what the assets are worth. So how do you balance that risk of working in these markets that don’t have stable currencies?

Yomi: Another great question. Within the constraints of the laws of the land, within the relative respective jurisdiction, we tend to mitigate currency risk – and your assumption is correct, at least for us, that the investment is a hard currency investment and typically US dollar. Because of that, within the constraints of the law of each jurisdiction, we try to implement two general currency risk mitigation strategies.

One is within the free zones or special economic zones, part of their DNA that attracts this investment, not just by us as the zone developer and manager, but by the brand new foreign direct investors and others who come in, is a legal framework or regime that permits investment in foreign currency, permits you to charge for your goods, your services, your space in foreign currency, in US dollars, and does not restrict repatriation of your foreign currency returns on investment.

That regime, which, if it did not exist, could be a problem in certain markets, where there are significant currency controls, is a key differentiator. The other aspect within the laws of respective jurisdictions, I don’t want to speak for our countries at the same time, but another tool that is used or strategy that is used is to dollar link your pricing.

You effectively have a hedge against devaluation. $100 today is X, a $50 payment today is Y, and the $50 balance payment in six months from now will be Z. It will all float and link to the present-day exchange rate for the dollar to local currency. In that way, you then have some administrative work to do in terms of time lead, treasury management, and managing the local currency risk on the back end, but I think that is just a regular course part of business.

You get the appropriate, equivalent local currency and a manager effects risk by converting to the US dollar or hard currency, and you also can, enough free zone and special economic zones, accept dollar payments directly.

Mark: Let’s get into the governance. We think about these two layers of governance for city developments. One is traditional governance that is on a city level, which is things like zoning, land use, sometimes policing, some education. Then there are also the special economic zone or charter cities aspects, which might include things like business registration, things like the one stop shop, separate labor regime.

So how have you approached governance, and then particularly focusing on Alaro City, because it is in the Lekki Free Trade Zone. What type of autonomy do you have and how has that benefited the development of the city?

Yomi: So with Alaro City, we have keyed in to a national legal framework. There is the NEPZA Act, which is the basis for establishing the NEPZA authority, Nigerian Export Processing Zones Authority, and all of the free zones, export processing zones, in the country have their regulations, their gazettes, in the local base of this law, which had been in effect for a while, so it is well settled.

What do we have as part of the Lekki Free Zone? We as the zone promoter or developer have been authorized on the back of an application process by the NEPZA authority to manage the zone, which includes the responsibility for developing bulk civil infrastructure, for securing the site, for working with the government under a one stop shop framework.

We have been allocated representatives from the various relevant organs of state, from the immigration service to customs to the police force, Department of State Security. Obviously NEPZA itself, the free zone authority. We work hand in hand. We have a layer of engagement and training that is specific to Alaro City and how we engage with offtakers to enhance the ease of business from a one stop shop perspective. We are authorized to be the sole interface with the customers, with the offtakers, and the entrants to the zone.

At any given time for registering a vehicle, registering security, as a collateral incorporating the company, arranging for duty-free cargo to come into the zone from the ports, airports, seaport, from ground transport across the land borders, the user of the free zone interfaces with a private sector participant who is well-trained, who is customer focused and friendly, and who, on the backend is effectively and efficiently supported by a well-trained layer of government representatives across the relevant spectrum.

Within the zone, the usual benefits, attributes apply in the spectrum of no duty, no tax. Again, no restriction on infatuation of the capital, no foreign ownership restrictions. We are also the on the back of the holistic and comprehensive planning process that is approved by the state, on the back of conducting our environmental and social impact assessments, approved by the state.

We also then, as part of the zone manager role, have responsibility for, with government, subsequent EISAs for offtakers, and for approving building plans and designs, and for enforcing the approved development guidelines for Alaro City. So that is a quite awesome responsibility and a comprehensive one. It tends to involve a number of people and in three general brackets I would say it involves the Rendeavour team, it involves the government officials that are attached to Alaro City, and their colleagues who are in headquarters and other offices, and it involves external professionals working with Rendeavour, and the government officials, to provide a seamless service and experience for the users of Alaro City.

Mark: You mentioned that a number of Rendeavour projects also have free-zone or special economic zone status. I know Tatu City in Kenya has some degree of special economic zone status.

How have you seen those different governance regimes differ in your different projects, in different countries, and what do you think has been the effect on market demand with those different governance regimes?

Yomi: I think fortunately, and in some cases it is actually by design, particularly where we have been part of helping to shape the framework for the special economic zone regime or status for our project, there are a lot of similarities.

There are of course differences. For instance, two of the differences that just come to mind and, please recall, I am not part of the management team in all of these other projects, but I do know that, for instance, the approach to security is different between different free zones.

Many free zones will allow you to secure the regime, the status, the benefits, but maybe are silent on questions of police presence, in our case, Department of State Security, and the rest. So we would see a different level of coordination, and mandatory coordination, or involvement, by the state security agencies. Another example is the term, or the tenure, for the benefits in question.

For some free zones, what you will see is you have the benefits that apply to duty or tax apply for a time period, a time limit, they are time bound. You have benefits on low tax for say 10 years, 20 years. Then in other projects such as Alaro City, they apply in perpetuity. So there is no time restriction by law. In some free zones the benefits accrue only for products that are for export, for instance. You will not pay tax and you will not pay duty so long as the finished goods are for the purpose of export. Whereas, in some free zones, such as Alaro City, there expressed, documented approval for up to 100% of production within the zone to come into the customs territory.

So, one thing that I think we try to achieve, at least from a Rendeavour perspective, is the law of the land is the law of the land, and we are absolutely compliant with that. Within that context, we try to create awareness as to the opportunities available, in terms of the free zone regime for the specific jurisdiction, and we emphasize city-specific training to promote and enhance, optimize the ease of business and the customer experience. So that is something we see across all of the projects.

And then we key into and maximize the ability of our offtakers to benefit from the free zone incentives and benefits on offer in that particular city.

Mark: My last question, when you think about building companies, one the things that is often focused on in Silicon Valley is the culture of the company.

Because as you scale it is important to make sure you have a culture that is proactive, is entrepreneurial, and gets things done. So one of the discussions that we started having in the office is about a culture of a city. How do you focus on creating a good city culture, a good civic life that leads to these better outcomes over a longer time horizon that might be difficult to quantify?

Have you thought about, for Alaro City for example, have you thought about what it means to create a city culture and if so, what steps have you taken to help develop that culture?

Yomi: Yes, we have. Again, an excellent question and one we spent a lot of time thinking about and discussing for Alaro City and for all of our projects in Rendeavour. The culture of a city is developed around shared experiences. For us at Alaro City, we believe, as we do for all of our other cities in the Rendeavour portfolio, that we must build cities that promote a livable and a sustainable lifestyle. This is, in many respects, hardwired into a process.

From master planning to building and operating and managing these cities. After all, our mantra is live-work-play, and not just work indeed. You know, when you look at Alaro City and moreover, don’t just look at it, but track the market’s response and reception of Alaro City, and it is clear that everyone has taken note of the focus on creating green spaces where residents can relax, where they can explore, where they can be in tune with nature.

The quality of our roads and, more importantly, the pedestrian lanes, the cycling lanes, which again, a lot of people in other jurisdictions take for granted, but it is something that the market and the government has taken on itself at Alaro City. We hope that we promote healthy living and a means of additional levels of connectivity within the shared experience of Alaro City. We have also been deliberate about factoring in shared spaces such as parks, club houses with various amenities, that bring people together.

And to impact the point further capitalize the interest in an uptake of these new cities as they build up and roll out. We create hubs, we are looking at technology, we are looking at art, we are looking at media, and doing media that promotes innovation, in tune with the theme of excellence and the motto of excellence within Lagos State. We are looking at excellence across these including culturally and there’s cultural initiatives in shared spaces.

So the future of all of these things begin to create a way of life that people at Alaro City can imbibe, and they can also be part of the evolution of it over time. These shared experiences even for the most hard core and focused industrialist, to the individual or family that want to get some residential space as an investment or for a home, down to the larger stations and their warehouses, the leisure providers, the retailers, the restaurateurs, and even for the visitors that come into Alaro City. It is all about shared experience and high-quality shared experience zone.

Mark: Great, thanks. Before we wrap up, is there any additional information that you would like the audience to know?

Yomi: Well, from somebody who never thought they’d be working in real estate or developing cities, I think that the work that Charter Cities is doing in creating this level of awareness is critical to people understanding the multiple levels of opportunity and benefit that can come with these types of development. For a true convert in myself, as somebody who was first in big law and then in banking, on a more personal note, I think it is really rewarding.

We have talked about the Africa Rising arc, to be involved in the field where the results, the benefits are so tangible. To see virgin, significantly sized virgin, absolutely virgin, raw virgin parcels of land, developed over time into what nobody thought could be. To see the jobs that are created, the investment that comes, the quality of the aesthetic, the control and order and efficiency that is a result of a lot of hard work and planning and execution, is really something special and exciting to be a part of.

So I think in signing out, it is to thank you for this opportunity, Mark, and to thank all of the team at Charter Cities for the work that you guys do.

Mark: Thanks, I appreciate that and so with that we’ll wrap it up and you will see us in two weeks.

Yomi: Thank you Mark, it’s a pleasure.

Mark: Thank you for listening to the Charter Cities Podcast. For more information about this episode and our guest, to subscribe to the show or to connect with the Charter Cities Institute, please visit Follow us on social media @CCIdotCity on Twitter and Charter Cities Institute on Facebook. I am your host, Mark Lutter and thank you for listening to the Charter Cities Podcast. 

Links mentioned in today’s episode:

Yomi Ademola on LinkedIn


Alaro City

Renaissance Capital

Tatu City

Roma Park


Cityscape Planning

Skidmore, Owings & Merrill

Nigeria Export Processing Zones Authority

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