Targets N2.9 trillion in revenue for 2025
By Samuel Akim, Lagos
Lagos State’s Gross Domestic Product (GDP) has reached $259 billion, measured by Purchasing Power Parity (PPP), securing its position as the second-largest economy in Africa, just behind Cairo, Egypt’s capital.
This announcement was made yesterday during the unveiling of the Lagos Economic Development Update (LEDU) 2025 in Nigeria’s commercial hub.
The report, developed by the Ministry of Economic Planning and Budget (MEPB), outlines key strategies for fostering economic resilience, ensuring fiscal sustainability, and enhancing revenue mobilization.
At the launch event, the Commissioner for MEPB, Ope George, emphasized that the 2025 LEDU offers vital insights to inform policy-making and drive economic growth.
George reiterated the state government’s dedication to maintaining fiscal sustainability, promoting economic diversification, and advancing infrastructure development. These priorities align with Governor Babajide Sanwo-Olu’s vision, as encapsulated in the ‘Budget of Sustainability,’ aimed at fostering long-term economic stability and growth for Lagos.
Themed: “‘Lagos Economic Outlook: Charting a Resilient Path Towards a Sustainable Future,’ this year’s LEDU, he said, underscores the state’s commitment to evidence-based policymaking, fiscal sustainability, and inclusive development.
Additionally, the report revealed that Lagos State’s economy experienced significant growth in the first half of 2024, expanding to N27.38 trillion, a notable increase from N19.65 trillion in 2023. This growth underscores the resilience of Nigeria’s commercial hub, driven by economic reforms and sustained infrastructure investments. However, the tax-to-GDP ratio remained low at 2.3 percent, highlighting the urgent need for improved revenue mobilization strategies.
The report also outlined key economic projections, with Lagos’ GDP expected to rise from N54.77 trillion in 2024 to N66.47 trillion in 2025. Real GDP growth is forecasted to range between 5.02 percent and 6.49 percent.
The service sector is anticipated to continue its expansion, supported by advancements in agriculture and industrial production. Economic stability is projected to be further bolstered by declining petrol prices and a stable naira-to-dollar exchange rate.
Also, the Lagos State Government anticipated generating N2.79 trillion in revenue for 2025, emphasising the need for increased fiscal discipline and diversification of revenue sources, remaining a key destination for investors looking to tap into Nigeria’s vibrant economic landscape.
Delivering the keynote address titled: ‘Bridging the Revenue Gap in Lagos: Innovative Pathways to Enhanced Revenue Mobilisation’, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, emphasised the need for Lagos to increase its revenue generation to match its economic ambitions.
“Lagos is big, but its revenue is small, collecting less than 2 per cent of GDP. While some progress has been made, we still have a big room for improvement, and the time to change this narrative is now,” Oyedele opined.
He highlighted three key strategies for Lagos to improve revenue collection, including property taxation, expansion of personal income tax base, particularly by leveraging technology to capture high-income earners and tax harmonisation.
“A better approach to taxation is not to tax the seed, but the fruit. Let businesses grow, and tax them fairly on their successes,” he stated.
He also called for formalising the informal sector, particularly among digital entrepreneurs, content creators, and event planners, to capture untapped revenue.
Oyedele called for bold action, comparing Lagos’ potential to global success stories like Dubai and Singapore.
“With the right reforms, Lagos can generate up to N5 trillion annually in Internally Generated Revenue (IGR)” Oyedele added.
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