Lagos State has solidified its position as one of Africa’s economic powerhouses, with its Gross Domestic Product (GDP) reaching $259 billion based on purchasing power parity (PPP). This milestone, revealed during the launch of the Lagos Economic Development Update (LEDU) 2025, places Lagos as the continent’s second-largest city economy, trailing only Cairo, Egypt.

Economic Growth and Performance

In 2023, Lagos recorded a GDP of $259.75 billion, showcasing its economic resilience amid reforms and infrastructural investments. The state’s economy grew significantly in the first half of 2024, expanding to N27.38 trillion, up from N19.65 trillion in 2023. However, the tax-to-GDP ratio remains low at 2.3%, highlighting the need for improved revenue mobilization.

Key 2025 Budget Assumptions

The Lagos State government has outlined ambitious projections for 2025, focusing on sustained economic growth and stability:

  • GDP Growth: Expected to rise from N54.77 trillion in 2024 to N66.47 trillion in 2025, with real GDP growth projected between 5.02% and 6.49%.
  • Sectoral Growth: The service sector will continue to expand, supported by improvements in agriculture and industrial production. Stability is anticipated due to declining petrol prices and a stable naira/dollar exchange rate.
  • Inflation Forecast: Headline inflation is projected at 34.2%, with food inflation slightly higher at 34.9%.
  • Revenue Projections: The state aims to generate N2.79 trillion in revenue, emphasizing fiscal discipline and diversification.

Implications for Investors and Businesses

Lagos remains a prime destination for investors, offering opportunities in infrastructure, 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.

GDP Rebasing by National Bureau of Statistics (NBS)

The NBS is set to rebase Nigeria’s GDP this year, shifting the base year from 2010 to 2019. The update will include:

  • Digital Economic Activities: E-commerce, fintech, and online services.
  • Emerging Sectors: Data from modular refineries, pension fund administrators, and quarrying industries.
  • Social Programs: Activities from the National Health Insurance Scheme (NHIS) and the Nigerian Social Insurance Trust Fund (NSITF).

This rebasing aims to provide a more accurate reflection of Nigeria’s economic landscape, capturing the evolving nature of its economy.