Lagos State is charting an formidable path in direction of turning into a trillion-dollar financial system by 2052, with its present Gross Home Product (GDP) at $259 billion based mostly on Buying Energy Parity (PPP). To drive this imaginative and prescient, the state authorities just lately unveiled the 2025 Lagos Financial Improvement Replace (LEDU), a strategic roadmap offering a data-driven evaluation of financial efficiency and coverage instructions for sustainable development, ADAKU ONYENUCHEYA writes.
Lagos State’s latest achievement of a Gross Home Product (GDP) of $259 billion has positioned it because the second-largest financial system in Africa, trailing solely Cairo, the Egyptian capital.
This feat, completed by way of Buying Energy Parity (PPP) after years of strategic planning and exhausting work by the state authorities, has strengthened Lagos as a high financial hub in Africa, driving financial actions throughout West Africa. Based on knowledge from the Nationwide Bureau of Statistics (NBS) and the Lagos Bureau of Statistics (LBS), Nigeria’s nationwide GDP stood at N234.43 trillion in 2023, with Lagos contributing N43.06 trillion, representing 18.38 per cent of the nationwide financial system. Within the first half of 2024, the nationwide financial system recorded a GDP of N122.51 trillion, with Lagos accounting for N27.39 trillion, representing 22.36 per cent of Nigeria’s GDP. Owing to the state’s fiscal duty and well-defined growth agenda, world traders are more and more turning to Lagos as a first-rate vacation spot for overseas capital. The improved enterprise atmosphere and the distinctive resourcefulness of the Lagos workforce have additional cemented the state’s standing as Nigeria’s main financial powerhouse. Because the nation’s business hub, Lagos has persistently attracted a big share of overseas investments, taking part in a pivotal function in shaping Nigeria’s broader financial trajectory.
Budgetary Efficiency, Income GrowthAccording to the Lagos Financial Improvement Replace (LEDU) 2025 report, the state has demonstrated constant and commendable budgetary efficiency over 10 consecutive quarters. Capital importation within the first quarter of 2024 elevated by a powerful 110.59 per cent year-on-year, underscoring the resilience of Lagos State’s financial system regardless of quarterly fluctuations. Income efficiency, which stood at 79.5 per cent in 2021, declined barely to 77.8 per cent in 2022. Nevertheless, it rebounded considerably, reaching 85.8 per cent in 2023 and 106.6 per cent in 2024.
This enchancment is attributed to key initiatives such because the implementation of the Lagos Income Portal, frequent updates to the tax register, and elevated federal transfers following the removing of gas subsidies. On the expenditure facet, efficiency adopted a extra variable trajectory, declining from 84.8 per cent in 2021 to 72.7 per cent in 2022 earlier than bettering to 86.8 per cent in 2023 and later dropped to 78.3 per cent in 2024. Regardless of these fluctuations, the report highlights the robust income efficiency in Q3 2024 as a testomony to the effectiveness of the state’s income enhancement methods. Based on the report, the regular enchancment in income assortment displays the influence of strategic fiscal reforms, together with digitised income assortment and elevated transparency. The 2024 fiscal yr has seen the implementation of quite a few interventions, insurance policies, and initiatives aligned with the state’s funds. Constructing on the achievements of 2023, the funds prioritises key financial sectors, together with transportation, safety, meals safety, housing, youth employment, leisure, well being, schooling, public order and security, vitality and social safety. Lagos State stays dedicated to its long-term financial imaginative and prescient, as outlined within the Lagos State Improvement Plan (LSDP), which targets an financial dimension of $800 billion to $1 trillion by 2052. The state continues to progress in direction of this objective by way of sustained financial enlargement and policy-driven development initiatives.
Financial OutlookOver the previous 4 years, the state has witnessed substantial enlargement throughout key financial sub-sectors, together with commerce, transport, info and communication, arts, leisure, recreation, monetary providers and insurance coverage. Based on the LEDU report, the state’s financial system is projected to develop from N43.06 trillion in 2023 to N54.77 trillion in 2024 and N66.47 trillion in 2025. This upward development is primarily pushed by the continued enlargement of the providers sector, with extra contributions from the agriculture and industrial sectors. The providers sector stays the dominant driver of the state’s financial system, with over 100 know-how hubs and startups, reinforcing its standing because the business hub of Nigeria and West Africa. Within the second quarter of 2024, the sector’s share of the state’s whole actual GDP elevated to 91.57 per cent, up from 90.29 per cent in Q1 2024. With Lagos rising as a hub for digital innovation and technology-driven startups, the providers sector is anticipated to additional strengthen its contribution to nominal GDP. The report additionally highlighted that the economic sector, largely pushed by manufacturing, has skilled regular development over the previous 4 years. Lagos additionally maintains its place as Nigeria’s monetary hub, with all main banks headquartered within the state. Moreover, Lagos accounts for over 80 per cent of Nigeria’s overseas commerce flows and generates greater than 70 per cent of port revenues. For commerce, it elevated business actions and client demand led to an increase in its contribution from 51.8 per cent in Q1 2024 to 53.1 per cent in Q2 2024, whereas info and communication sector accounted for twenty-four.81 per cent of GDP in Q2 2024, up from 22.4 per cent in Q1 2024. The report acknowledged that this enlargement is anticipated to proceed by way of 2024 and into 2025, supported by ongoing infrastructure growth throughout the state. In the meantime, a number of main infrastructure initiatives have been accomplished in 2024, together with the commissioning of the Crimson Rail Line and the continuing enlargement of the Blue Rail Line.
These public investments are anticipated to boost productiveness within the manufacturing sector, additional boosting Lagos’s financial trajectory.Sustainable Financial Improvement
The Lagos Financial Improvement Replace 2025, themed, ‘Lagos Financial Outlook: Charting a Resilient Path In the direction of a Sustainable Future’, was formally launched final week to offer a data-driven evaluation of the state’s financial efficiency and description strategic coverage instructions for sustainable development. Talking on the launch, the Commissioner for Financial Planning and Price range, Ope George, emphasised that the report is designed to place Lagos as a Twenty first-century financial system. The important thing focus areas embody income mobilisation, financial diversification and monetary sustainability. George mentioned these strategic initiatives intention to boost financial development, enhance dwelling requirements, and cut back poverty amongst Lagos residents. He highlighted that the report displays the Lagos State authorities’s dedication to transparency, evidence-based policymaking, and sustainable financial development.George additional reiterated that Lagos stays the financial nerve centre of Nigeria and a hub for innovation, funding, and alternatives in Africa. He acknowledged that to keep up this management place, the state should undertake forward-thinking insurance policies, anticipate world tendencies, and mitigate dangers in an ever-evolving financial system. The report supplies actionable insights on sectoral efficiency, fiscal sustainability, social safety and the labour market, capital importation, inflation, and macroeconomic outlook. Moreover, the 2025 version emphasises the necessity to construct resilience towards potential financial vulnerabilities, together with meals insecurity, local weather change, income gaps, vitality deficits, and expertise shortages. George acknowledged that by addressing these vital challenges, Lagos State goals to create a extra resilient, inclusive, and sustainable financial future. He mentioned the report serves as a blueprint for policymakers, traders, and stakeholders to drive long-term prosperity and make sure that Lagos stays on the forefront of Africa’s financial growth.
Sustaining Information-driven Insurance policies The state Governor, Babajide Sanwo-Olu, emphasised the state’s financial development and management, highlighting that its GDP of $259 billion based mostly on Buying Energy Parity (PPP) solidifies its place as Africa’s second-largest metropolis financial system. He famous that financial indicators like PPP are essential in showcasing actual financial energy, competitiveness, and the cost-of-living benefit. Based on Sanwo-Olu, Lagos is driving sustainable development throughout key sectors, together with infrastructure, know-how, tourism and manufacturing, positioning itself on the forefront of Africa’s financial transformation. “This milestone is greater than only a quantity; it displays the energy of our financial system, the resilience of our individuals, and our metropolis’s function as a hub for funding, commerce, and alternative,” he acknowledged. The Everlasting Secretary of the Ministry of Financial Planning and Price range, Mrs. Olayinka Ojo, underscored the significance of data-driven coverage choices in shaping Lagos’s financial trajectory. She pressured that as Nigeria’s financial nerve centre, Lagos should navigate world and nationwide financial complexities with foresight and strategic planning. Ojo famous that the 2025 LEDU report supplies vital insights into fiscal sustainability, labour market dynamics, and income era. She emphasised that the state’s future prosperity relies on collective efforts to boost fiscal governance, strengthen income mobilisation, and create an enabling atmosphere for companies to thrive.
Bridging Income GapDelivering the keynote tackle titled, ‘Bridging the Income Hole in Lagos: Progressive Pathways to Enhanced Income Mobilisation’, Chairman of the Presidential Fiscal Coverage and Tax Reforms Committee, Taiwo Oyedele, emphasised the pressing want for progressive and transformative methods to bridge the state’s income hole.
He famous that whereas Lagos stays Nigeria’s financial powerhouse, its present income era of lower than two per cent of GDP lags behind comparable economies worldwide. Oyedele acknowledged that regardless of its dimension and financial affect, the state isn’t producing sufficient income to match its ambitions. “Lagos is massive, however its income is small, gathering lower than two per cent of GDP. Whereas some progress has been made, there may be nonetheless vital room for enchancment, and the time to alter this narrative is now,” Oyedele acknowledged. He outlined three key pathways for enhancing income mobilisation, beginning with property taxation. Oyedele highlighted that cities like Bogotá, Colombia, generate over $1 billion yearly from property tax, whereas Lagos, regardless of having one of the vital useful actual property markets on the planet, collects far much less. He attributed this hole to inefficiencies in land titling, property valuation, and enforcement. To deal with this, he proposed reforms aimed toward bettering land titling processes, incentivising compliance and guaranteeing a clear property valuation system. Oyedele’s second pathway targeted on increasing private revenue tax assortment by leveraging know-how to seize high-income earners who ought to be contributing extra to the system. Oyedele underscored the necessity to formalise the casual sector, significantly Lagos’s booming digital and artistic industries, guaranteeing that entrepreneurs, occasion planners, content material creators, and entertainers contribute pretty with out being overburdened. He advocated for a good presumptive tax regime that enables small companies to develop earlier than being subjected to heavy taxation on their successes.
