Lagos State has solidified its status as one of Africa’s leading economic hubs, with its Gross Domestic Product (GDP) reaching an impressive $259 billion, measured by purchasing power parity (PPP). This achievement positions Lagos as the second-largest economy on the continent, just behind Cairo, Egypt. The announcement was made during the unveiling of the Lagos Economic Development Update (LEDU) 2025 on Wednesday.
The report highlights that Lagos State’s GDP stood at $259.75 billion in 2023, underscoring its significant economic influence. In the first half of 2024, the state’s economy expanded to N27.38 trillion, a notable increase from N19.65 trillion in 2023. This growth reflects the resilience of Nigeria’s commercial capital, driven by ongoing economic reforms and infrastructure investments. However, the tax-to-GDP ratio remains low at 2.3%, indicating a need for improved revenue mobilization strategies.
Looking ahead, the Lagos State government has set ambitious targets for the 2025 fiscal year, with key projections aimed at sustaining economic growth and stability. The state’s GDP is expected to increase from N54.77 trillion in 2024 to N66.47 trillion in 2025, reflecting a real GDP growth rate of between 5.02% and 6.49%. Sectoral growth will be driven by the continued expansion of the service sector, alongside improvements in agriculture and industrial production. Economic stability is also anticipated to benefit from declining petrol prices and a stable naira-to-dollar exchange rate, creating a more favorable environment for businesses and investors.
However, challenges remain, particularly in managing inflation and boosting revenue. Headline inflation is projected at 34.2%, with food inflation slightly higher at 34.9%. To address these issues, the Lagos State government plans to generate N2.79 trillion in revenue in 2025, emphasizing fiscal discipline and the diversification of income sources. These measures aim to strengthen the state’s financial resilience while supporting its long-term economic ambitions.
Lagos remains a prime destination for investors seeking opportunities in Nigeria’s dynamic economy. The state’s growth trajectory, coupled with strategic policy measures, offers potential in sectors such as infrastructure, technology, real estate, and manufacturing. However, challenges such as high inflation, foreign exchange volatility, and infrastructure gaps must be addressed to ensure sustainable long-term growth.
In related developments, the National Bureau of Statistics (NBS) is set to rebase Nigeria’s GDP this year, shifting the base year from 2010 to 2019. This update will incorporate emerging sectors such as e-commerce, fintech, modular refineries, and social programs like the National Health Insurance Scheme (NHIS) and the Nigerian Social Insurance Trust Fund (NSITF).
As Lagos continues to drive Nigeria’s economic progress, stakeholders are optimistic about its potential to attract further investments and foster inclusive growth. However, addressing structural challenges will be critical to maintaining its position as a leading economic powerhouse in Africa.
