Quick Summary: Lagos State’s GDP has surged to $259 billion, making it Africa’s second-largest city economy after Cairo. The economy grew significantly in early 2024, with projections for further expansion in 2025. Key sectors such as services, agriculture, and industry are expected to drive growth. However, challenges like inflation and infrastructure gaps remain.
Lagos Solidifies Its Economic Powerhouse Status
Lagos State has reaffirmed its position as one of Africa’s leading economic hubs, 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 city economy on the continent, following only Cairo, Egypt.
This revelation came during the official launch of the Lagos Economic Development Update (LEDU) 2025 on Wednesday. The report confirmed that Lagos’ GDP stood at $259.75 billion in 2023, strengthening its reputation as Nigeria’s commercial nerve center.
Strong Economic Growth and Performance
Lagos State’s economy demonstrated significant growth in early 2024. Key highlights include:
- The economy expanded to N27.38 trillion in the first half of 2024, marking a substantial rise from N19.65 trillion in 2023.
- This growth reflects Lagos’ resilience amid economic reforms and ongoing infrastructural investments.
- Despite expansion, the tax-to-GDP ratio remains low at 2.3%, signaling the need for improved revenue mobilization.
Key 2025 Budget Projections
Looking ahead, the Lagos State Government has outlined ambitious economic goals for 2025, aiming for sustained growth and stability. Some key projections include:
- GDP Growth: Expected to rise from N54.77 trillion in 2024 to N66.47 trillion in 2025. Real GDP growth is projected between 5.02% and 6.49%.
- Sectoral Expansion: Growth in the service sector, with agriculture and industrial production also expected to improve. Economic stability will be supported by lower petrol (PMS) prices and a stable naira-to-dollar exchange rate.
- Inflation Forecast: Headline inflation is projected at 34.2%, with food inflation slightly higher at 34.9%.
- Revenue Expectations: The Lagos State Government aims to generate N2.79 trillion in revenue in 2025, with a focus on fiscal discipline and revenue diversification.
Investment Opportunities and Economic Outlook
Lagos continues to be a prime destination for investors seeking to leverage Nigeria’s dynamic economy. The state’s rapid expansion, coupled with strategic policy interventions, offers opportunities in:
- Infrastructure Development
- Technology and Digital Economy
- Real Estate and Housing
- Manufacturing and Industrial Growth
However, economic analysts caution that while Lagos boasts a large economy, challenges such as high inflation, foreign exchange volatility, and infrastructure deficits must be tackled to ensure long-term sustainability.
Upcoming GDP Rebasing by NBS
The National Bureau of Statistics (NBS) is set to rebase Nigeria’s GDP in 2024, updating the base year from 2010 to 2019. This rebasing aims to provide a more accurate economic outlook by incorporating:
- Digital Economy: Inclusion of e-commerce, fintech, and other online services.
- Emerging Sectors: Data from modular refineries, pension fund administrators, and quarrying industries.
- Social Programs: Economic contributions from the National Health Insurance Scheme (NHIS) and the Nigerian Social Insurance Trust Fund (NSITF).
The updated GDP framework will better reflect Nigeria’s evolving economy, ensuring improved data accuracy for policy formulation and investment decisions.
Conclusion
Lagos State’s economic trajectory remains strong, positioning it as a leading African metropolis. While challenges persist, strategic investments, infrastructure upgrades, and improved revenue generation efforts will be crucial in sustaining growth and maintaining investor confidence.
