The Lagos State Government has reported a $259 billion Gross Domestic Product (GDP) of Lagos based on Purchasing Power Parity (PPP), thereby positioning Lagos, Nigeria’s economic hub, as the second-largest economy in Africa. This
These figures on the economic performance of Lagos were disclosed on Wednesday during the formal launch of the ‘Lagos Economic Development Update (LEDU) 2025’ report.
Handled by the Ministry of Economic Planning and Budget (MEPB), the report highlighted strategies for the commercial city’s economic resilience, fiscal sustainability, and revenue mobilisation.
Speaking at the presentation of the report with the theme ‘Lagos Economic Outlook: Charting a Resilient Path Towards a Sustainable Future’, the Commissioner for the ministry, Mr. Ope George, maintained that the 2025 LEDU provided critical insights to guide policy decisions as relating to business and investment activities in Lagos.
While restating the state’s commitment to fiscal sustainability, economic diversification, and infrastructure development in line with Governor Babajide Sanwo-Olu’s ‘Budget of Sustainability’, the commissioner noted the latest GDP growth of Lagos underscored the state’s commitment to evidence-based policymaking, fiscal sustainability, and inclusive development.
In addition, George explained that the report’s data showed that the Lagos economy recorded significant growth in the first half of 2024, expanding to N27.38 trillion, up from N19.65 trillion in 2023.
According to him, the growth highlighted the resilience of Nigeria’s commercial capital amid economic reforms and ongoing infrastructure investments, even when the tax-to-GDP ratio still remained low at 2.3%, reflecting the need for enhanced revenue mobilisation efforts.
The Lagos State Government projected that the state’s GDP would grow from N54.77 trillion in 2024 to N66.47 trillion in 2025, while real GDP growth is expected to range between 5.02% and 6.49%.
The report’s findings also indicated that the Services sector, would sustain its growth momentum, complemented by improvements in agriculture and industrial production, while the state’s economic stability is expected to be aided by a decline in petrol prices and a stable Naira/USD exchange rate.
Similarly, the Lagos State Government anticipated to generate N2.79 trillion as revenue in 2025, and harped on the need for increased fiscal discipline and diversification of revenue sources to maintain Lagos as a key destination for investors, particularly foreign investors looking to tap into Nigeria’s vibrant economic landscape.
In his keynote address titled ‘Bridging the Revenue Gap in Lagos: Innovative Pathways to Enhanced Revenue Mobilisation’ delivered at the forum, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, stressed the need for Lagos State Government to enhance its revenue generation drive to match its economic ambitions.
The tax expert said: “Lagos is big, but its revenue is small, collecting less than 2 per cent of GDP. While some progress has been made, we still have a big room for improvement, and the time to change this narrative is now.”
Oyedele identified three key strategies for the state government to improve its revenue collection, namely property taxation, expansion of personal income tax base, particularly by leveraging technology to capture high-income earners and tax harmonisation.
According to him, a better approach to taxation is not to tax the seed, but the fruit. Let businesses grow, and tax them fairly on their successes.
Oyedele advocated the imperative of formalising the informal sector, especially among digital entrepreneurs, content creators, and event planners, to capture untapped revenue into the tax net.
He projected: “With the right reforms, Lagos can generate up to N5 trillion annually in Internally Generated Revenue (IGR).”
