The Gross Domestic Product (GDP) of Lagos state has hit $259 billion, based on Purchasing Power Parity (PPP), placing it as the second-largest economy on the continent and trailing only behind Cairo, the Egyptian capital.
This was made known on Wednesday during the official launch of the Lagos Economic Development Update (LEDU) 2025 in Nigeria’s commercial centre.
Executed under the Ministry of Economic Planning and Budget (MEPB), the document highlighted strategies for economic resilience, fiscal sustainability, and revenue mobilisation.
Speaking at the presentation of the report, the Commissioner for MEPB, Ope George, emphasised that the 2025 LEDU provides critical insights to guide policy decisions.
He reiterated the state’s commitment to fiscal sustainability, economic diversification, and infrastructure development, aligning with Governor Babajide Sanwo-Olu’s ‘Budget of Sustainability.’
Themed: “‘Lagos Economic Outlook: Charting a Resilient Path Towards a Sustainable Future,’ this year’s LEDU, he said, underscores the state’s commitment to evidence-based policymaking, fiscal sustainability, and inclusive development.
Besides, it showed that the Lagos economy recorded significant growth in the first half of 2024, expanding to N27.38 trillion, a substantial increase from N19.65 trillion in 2023.
This growth highlighted the resilience of Nigeria’s commercial capital amid economic reforms and ongoing infrastructure investments, although the tax-to-GDP ratio remained low at 2.3 per cent, reflecting the need for enhanced revenue mobilisation efforts.
On key assumptions, Lagos said its GDP growth is projected to grow from N54.77 trillion in 2024 to N66.47 trillion in 2025, while real GDP growth is expected to range between 5.02 per cent and 6.49 per cent.
The service sector, it said, will continue its expansion, complemented by improvements in agriculture and industrial production. Economic stability, according to the document, is expected to be aided by a decline in petrol prices and a stable naira/dollar exchange rate.
Also, the Lagos State Government anticipated generating N2.79 trillion in revenue for 2025, emphasising the need for increased fiscal discipline and diversification of revenue sources, remaining a key destination for investors looking to tap into Nigeria’s vibrant economic landscape.
Delivering the keynote address titled: ‘Bridging the Revenue Gap in Lagos: Innovative Pathways to Enhanced Revenue Mobilisation’, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, emphasised the need for Lagos to increase its revenue generation to match its economic ambitions.
“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 opined.
He highlighted three key strategies for Lagos to improve revenue collection, including property taxation, expansion of personal income tax base, particularly by leveraging technology to capture high-income earners and tax harmonisation.
“A better approach to taxation is not to tax the seed, but the fruit. Let businesses grow, and tax them fairly on their successes,” he stated.
He also called for formalising the informal sector, particularly among digital entrepreneurs, content creators, and event planners, to capture untapped revenue.
Oyedele called for bold action, comparing Lagos’ potential to global success stories like Dubai and Singapore.
“With the right reforms, Lagos can generate up to N5 trillion annually in Internally Generated Revenue (IGR)” Oyedele added.
