Lagos State’s Economy Soars to $259 Billion GDP, Becoming Africa’s Second-Largest Investment Hub
Lagos State has reinforced its position as one of Africa’s leading economic centers, with its Gross Domestic Product (GDP) reaching approximately $259 billion based on purchasing power parity (PPP).
This milestone places Lagos as the second-largest economy in Africa, coming in just behind Cairo, Egypt.
The announcement was made during the launch of the Lagos Economic Development Update (LEDU) 2025 on Wednesday. According to the report, Lagos ranks as Africa’s second-largest city economy by PPP, with its GDP estimated at $259.75 billion in 2023.
Economic Growth and Performance
Lagos’ economy experienced significant expansion in the first half of 2024, increasing to N27.38 trillion from N19.65 trillion in 2023. This growth underscores the resilience of Nigeria’s commercial hub, supported by ongoing economic reforms and infrastructure development.
Despite this positive trend, the tax-to-GDP ratio remains relatively low at 2.3%, indicating a need for stronger revenue mobilization strategies to sustain long-term growth.
Key Economic Projections for 2025
As the state moves into the 2025 fiscal year, the government has outlined ambitious economic targets aimed at ensuring continued growth and stability. Key projections include:
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 expected to be between 5.02% and 6.49%.
Sectoral Expansion: The services sector is expected to maintain its upward trajectory, while agriculture and industrial production are also set for improvements. Economic stability is anticipated, supported by lower petrol prices and a more stable naira-to-dollar exchange rate.
Inflation Outlook: Headline inflation is projected to be 34.2%, with food inflation slightly higher at 34.9%.
Revenue Generation: The Lagos State Government aims to generate N2.79 trillion in revenue for 2025, emphasizing the need for fiscal discipline and diversified income sources.
Impact on Investments and Business
Lagos continues to be a key destination for investors seeking opportunities in Nigeria’s growing economy. Its steady expansion, coupled with strategic policies, offers promising prospects in infrastructure development, technology, real estate, and manufacturing.
However, while Lagos has a strong economic base, challenges such as high inflation, exchange rate fluctuations, and infrastructure deficits remain concerns that must be addressed to sustain long-term progress.