Lagos State’s Gross Domestic Product (GDP) has reached $259 billion, based on Purchasing Power Parity (PPP), positioning it as Africa’s second-largest economy.
This announcement was made on Wednesday during the official launch of the Lagos Economic Development Update (LEDU) 2025 in Nigeria’s commercial hub.
The report, developed under the Ministry of Economic Planning and Budget (MEPB), outlines strategies for economic resilience, fiscal sustainability, and revenue mobilisation efforts. Speaking at the presentation, Commissioner Ope George reaffirmed that the 2025 LEDU provides vital insights to guide Lagos State’s economic policies.
He emphasised the government’s commitment to fiscal sustainability, economic diversification, and infrastructure development, aligning with Governor Babajide Sanwo-Olu’s ‘Budget of Sustainability’ priorities. Themed “Lagos Economic Outlook: Charting a Resilient Path Towards a Sustainable Future,” the LEDU highlights evidence-based policymaking and inclusive economic development.
Lagos Economy Expands Amid Economic Reforms and Infrastructure Growth
The Lagos economy recorded significant growth in early 2024, expanding from N19.65 trillion in 2023 to N27.38 trillion this year. This growth underscores the resilience of Nigeria’s commercial center amid economic reforms and ongoing infrastructure investments across key sectors.
However, the tax-to-GDP ratio remains critically low at 2.3 percent, underscoring the urgent need for enhanced revenue mobilisation and efficient tax collection strategies across the state. Projections indicate that Lagos GDP will grow from N54.77 trillion in 2024 to N66.47 trillion by 2025.
Real GDP growth is expected to range between 5.02 percent and 6.49 percent, driven by expansion in the service, agricultural, and industrial sectors. Economic stability is projected to improve due to declining petrol prices and a more stable naira-dollar exchange rate in financial markets.
The Lagos State Government expects to generate N2.79 trillion in revenue by 2025, stressing the need for fiscal discipline and revenue diversification for sustained economic progress. Lagos remains a key investment hub for local and foreign investors seeking economic opportunities in Nigeria’s largest market.
Revenue Mobilisation: Experts Call for Tax Reforms and Policy Adjustments
Delivering the keynote speech titled ‘Bridging the Revenue Gap in Lagos: Innovative Pathways to Enhanced Revenue Mobilisation’, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, emphasised revenue expansion.
“Lagos is big, but its revenue remains small, collecting less than 2 percent of GDP, creating an economic challenge,” he said. “While progress has been made, the time to address these issues and improve revenue collection is now.”
Oyedele outlined three essential strategies to enhance revenue collection and strengthen fiscal sustainability across Lagos State’s economic landscape.
- Property Taxation – Addressing inefficiencies in land titling and property valuation to unlock billions of naira in potential tax revenue.
- Expanding the Personal Income Tax Base – Leveraging technology to capture high-income earners and informal sector workers, ensuring broader tax compliance across Lagos.
- Tax Harmonisation – Simplifying multiple taxation layers to enhance compliance, improve efficiency, and eliminate redundant levies affecting local businesses.
“A better taxation approach is not taxing the seed, but the fruit, allowing businesses to grow before imposing higher taxes,” he stated. He also stressed the importance of formalising the informal sector, targeting digital entrepreneurs, content creators, and event planners.
Oyedele called for bold policy decisions, comparing Lagos’ potential to global cities like Dubai and Singapore, which achieved economic success through financial reforms.
“With the right reforms, Lagos can generate up to N5 trillion annually in Internally Generated Revenue (IGR), ensuring long-term fiscal sustainability,” he added. The 2025 LEDU report highlights Lagos’ strategic vision for economic expansion through progressive fiscal reforms and revenue-enhancement initiatives.
