…State’s economy expands significantly amid ongoing reforms and investments
Lagos State has cemented its position as one of Africa’s economic powerhouses, with its Gross Domestic Product (GDP) reaching an impressive $259 billion based on purchasing power parity (PPP). This milestone places Lagos as the second-largest economy on the continent, trailing only Cairo, Egypt.
This was revealed during the official launch of the Lagos Economic Development Update (LEDU) 2025 on Wednesday. According to the report, the state’s GDP stood at $259.75 billion in 2023, reinforcing its dominance as Africa’s second-largest city economy by PPP.
The Lagos economy recorded significant growth in the first half of 2024, expanding to N27.38 trillion, a substantial rise from N19.65 trillion in 2023. This growth underscores the resilience of Nigeria’s commercial capital amid economic reforms and ongoing infrastructural investments. However, the tax-to-GDP ratio remains low at 2.3%, highlighting the need for enhanced revenue mobilization efforts.
Looking ahead, the Lagos State government has set ambitious projections for the 2025 fiscal year, anticipating further economic expansion and stability. GDP is expected to grow from N54.77 trillion in 2024 to N66.47 trillion in 2025, with real GDP growth ranging between 5.02% and 6.49%. The service sector will continue its expansion, alongside improvements in agriculture and industrial production. Economic stability is expected to be bolstered by a decline in PMS (petrol) prices and a stable naira/dollar exchange rate.
Inflation is projected to be 34.2%, with food inflation slightly higher at 34.9%. Revenue projections for 2025 stand at N2.79 trillion, emphasizing the need for increased fiscal discipline and diversification of revenue sources.
Lagos remains a prime destination for investors looking to tap into Nigeria’s dynamic economic landscape. Strategic policy interventions and sustained economic expansion present opportunities in infrastructure development, technology, real estate, and manufacturing. However, challenges such as high inflation, foreign exchange volatility, and infrastructure deficits must be addressed to sustain long-term growth.
Meanwhile, the National Bureau of Statistics (NBS) is set to rebase Nigeria’s GDP this year, shifting the base year from 2010 to 2019. This rebasing process will update the scope of economic activities captured, with particular emphasis on digital economic activities, emerging sectors such as modular refineries and pension fund administration, and social programs like the National Health Insurance Scheme (NHIS) and the Nigerian Social Insurance Trust Fund (NSITF).