Lagos has emerged as Africa’s second-largest city economy, with its GDP reaching $259.75 billion, surpassing other major African cities except Cairo. The state’s economy expanded to N27.38 trillion in 2024, driven by infrastructural investments and economic reforms. However, experts urge improved revenue mobilization to sustain growth.
Lagos has cemented its status as a powerhouse in Africa, emerging as the continent’s second-largest city economy with a Gross Domestic Product (GDP) of $259.75 billion. The latest figures, based on Purchasing Power Parity (PPP), reflect the rapid economic expansion driven by infrastructural development, business growth, and policy reforms.
The announcement was made during the Lagos Economic Development Update (LEDU) 2025 event, where officials highlighted the city's resilience amid ongoing economic shifts. The report shows that Lagos’ economy experienced a notable increase in 2024, growing from N19.65 trillion in the previous year to N27.38 trillion. This upward trend has positioned the city as a major hub for investment and innovation.
Despite the impressive growth, economic experts warn of the need for improved revenue collection. The state's tax-to-GDP ratio remains low at 2.3%, signaling a gap in revenue mobilization that could affect long-term sustainability. To address this, Lagos’ government has outlined strategies aimed at boosting internally generated revenue, enhancing infrastructure, and ensuring fiscal discipline.
Looking ahead, projections for 2025 suggest continued expansion, with key sectors such as services, agriculture, and industrial production playing a pivotal role. The state also expects a more stable exchange rate and declining fuel prices to contribute to economic stability. However, inflation remains a challenge, with headline inflation forecasted at 34.2% and food inflation slightly higher at 34.9%.
Governor Babajide Sanwo-Olu’s administration has set an ambitious revenue target of N2.79 trillion for the coming year. Experts emphasize that diversification and economic innovation will be essential for sustaining Lagos’ economic trajectory and securing its position as a leading city economy in Africa.
