In a resounding affirmation of its economic prowess, Lagos State has officially announced its Gross Domestic Product (GDP) has reached a remarkable $259 billion based on purchasing power parity (PPP). This significant milestone, unveiled at the launch of the Lagos Economic Development Update (LEDU) 2025 on Wednesday, positions Lagos as the second-largest economy on the African continent, trailing only the bustling metropolis of Cairo, Egypt.
“This achievement underscores the dynamism and resilience of the Lagos economy,” a government official stated during the LEDU 2025 launch, echoing the sentiment of many who have witnessed the state’s consistent growth trajectory. The newly released report highlights that Lagos’ GDP stood at a substantial US$259.75 billion in 2023, firmly establishing its place as Africa’s second-largest city economy by PPP.
The report further reveals a robust economic expansion in the first half of 2024, with the Lagos economy surging to N27.38 trillion. This represents a significant leap from the N19.65 trillion recorded in 2023, demonstrating the commercial capital of Nigeria’s ability to thrive amidst ongoing economic reforms and substantial investments in critical infrastructure.
As a news writer with five years of experience covering economic developments in the region, I’ve observed firsthand the relentless drive and entrepreneurial spirit that fuel Lagos’ growth. This latest data not only confirms the state’s economic might but also offers a tangible sense of progress for its millions of residents. Imagine the implications: more jobs, better services, and an enhanced quality of life for the average Lagosian. This is the human angle that truly resonates with these impressive figures.
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However, the report also sheds light on areas requiring attention. Despite the impressive GDP figures, the tax-to-GDP ratio remains relatively low at 2.3%. This highlights a crucial need for the state to intensify its efforts in revenue mobilisation to ensure sustainable development and the provision of essential public services.
Looking towards the future, the Lagos State government has laid out ambitious projections for the 2025 fiscal year. The key assumptions outlined in the LEDU 2025 report paint a picture of continued economic expansion and stability.
Key Projections for 2025:
- GDP Growth: The state’s GDP is projected to rise from N54.77 trillion in 2024 to N66.47 trillion in 2025, with real GDP growth anticipated between 5.02% and 6.49%.
- Sectoral Growth: The service sector is expected to remain a primary driver of growth, complemented by anticipated improvements in the agricultural and industrial sectors. The government also projects that a decline in PMS (petrol) prices and a stable naira/dollar exchange rate will contribute to overall economic stability.
- Inflation Forecast: While acknowledging the persistent challenge of inflation, the government projects headline inflation to be 34.2%, with food inflation slightly higher at 34.9%. These figures underscore the ongoing impact of inflationary pressures on households and businesses.
- Revenue Projections: The Lagos State Government aims to generate N2.79 trillion in revenue for 2025. Achieving this target will necessitate enhanced fiscal discipline and a diversification of revenue streams.
For investors and businesses, Lagos continues to present itself as a prime destination within Nigeria’s dynamic economic landscape. The state’s consistent economic expansion, coupled with strategic policy interventions, opens up significant opportunities in sectors like infrastructure, technology, real estate, and manufacturing.
As one economic analyst noted, “Lagos offers a compelling investment proposition due to its sheer market size and growth potential.” However, they also cautioned that “challenges such as high inflation, foreign exchange volatility, and existing infrastructure deficits need to be actively addressed to ensure sustained long-term growth and attract even more foreign direct investment.”
Adding another layer to the economic narrative, the National Bureau of Statistics (NBS) is set to rebase Nigeria’s Gross Domestic Product (GDP) this year, shifting the base year from 2010 to 2019. This rebasing exercise, which updates the benchmark used for calculating GDP, aims to provide a more accurate reflection of the current structure and size of the Nigerian economy.
The rebasing process will involve a comprehensive update in the scope of economic activities captured, with a particular focus on:
- Digital Economic Activities: This includes the burgeoning sectors of e-commerce, fintech, and other online services, which have witnessed significant growth since 2010.
- Emerging Sectors: Data from newer industries such as modular refineries, pension fund administrators, and quarrying will be incorporated.
- Social Programs: Activities related to the National Health Insurance Scheme (NHIS) and the Nigerian Social Insurance Trust Fund (NSITF) will also be included, providing a more holistic view of the economy.
This rebasing exercise is crucial as it will provide a more contemporary and accurate picture of Nigeria’s economic landscape, potentially impacting various economic indicators and policy decisions. Lagos, already a significant contributor to the national GDP, the rebasing could further solidify its position as a key economic driver.
Lagos State’s achievement of a $259 billion GDP (PPP) is a testament to its enduring economic strength and potential. While challenges remain, the state’s commitment to growth, as evidenced by its ambitious projections for 2025 and ongoing infrastructure investments, signals a promising future. As Lagos continues to navigate the complexities of a dynamic global economy, its focus on revenue mobilisation, infrastructure development, and addressing inflationary pressures will be crucial in ensuring that this economic prosperity translates into tangible benefits for all its residents. The story of Lagos’ economic ascent is not just about numbers; it’s about the aspirations and the daily lives of millions of Nigerians striving for a better future.
