Nigeria’s commercial hub, Lagos, is setting an ambitious target to reach a $1 trillion economy by 2052. With over 20 million residents, this city-state has long been a key driver of the nation’s economic engine, contributing significantly to Nigeria’s Gross Domestic Product (GDP). Under the leadership of Governor Babajide Sanwo-Olu, Lagos is positioning itself for significant transformation through a combination of policy reforms, infrastructure growth, and investment-driven strategies. With a current GDP of $259 billion, based on Purchasing Power Parity, Lagos ranks as the second-largest economy in Africa, behind Cairo. The Lagos government recently released the Lagos Economic Development Update 2025, which highlights key strategies for long-term growth. These strategies include attracting foreign direct investment, reforming fiscal policies, and focusing on large-scale infrastructure projects. Analysts believe Lagos can achieve its bold goal if it continues on its current developmental path. In 2023, Lagos contributed N43.06 trillion, or 18.38 percent, to Nigeria’s total GDP, according to the National Bureau of Statistics and Lagos Bureau of Statistics. By mid-2024, its share had increased to 22.36 percent, signaling its growing economic influence. Governor Sanwo-Olu, at the unveiling of the report, stated that Lagos is not just growing, but leading, with a GDP of $259 billion, cementing its position as Africa’s second-largest city economy. For the governor, this milestone is more than a statistic; it represents the strength of Lagos’ economy, the resilience of its people, and the city’s role as a hub for trade, investment, and opportunities. He emphasized that economic indicators such as PPP are crucial in reflecting true economic strength, competitiveness, and cost-of-living advantages. From infrastructure to technology, tourism to manufacturing, Lagos is driving sustainable growth and remains at the forefront of Africa’s economic transformation. Development economist Illias Aliyu suggested that Lagos should tap into its coastal economy, expand trade partnerships, and improve infrastructure to achieve its $1 trillion economy goal by 2052. He pointed to the state’s maritime sector, which benefits from the newly created Ministry of Marine and Blue Economy, as a significant area for growth. Aliyu believes the new Minister of Marine and Blue Economy, Adegboyega Oyetola, has a vital role in attracting investment into ports and inland waterways, which could enhance trade, create jobs, and boost economic development. Ope George, Commissioner for Economic Planning and Budget, reiterated the government’s focus on diversifying the economy, increasing revenue mobilization, and advancing infrastructure development. George emphasized that Lagos remains the economic core of Nigeria and a hub for innovation, investment, and opportunity in Africa. He noted that in a rapidly changing global economy, maintaining Lagos’ leadership requires forward-thinking policies and the ability to adapt to emerging trends and risks. Foreign Investments Foreign investment is a crucial driver of Lagos’ economic growth. In Q3 2024, Lagos saw a 110.59 percent increase in capital importation, a major boost amidst Nigeria’s broader economic challenges. The Lekki Free Zone and the recently opened Lekki Deep Seaport are key assets in attracting foreign capital and positioning Lagos as a critical player in West Africa’s trade and transshipment networks. Aliyu also highlighted the importance of Lagos’ manufacturing sector and export potential in driving growth. He suggested that expanding the city’s airport cargo capacity—similar to that of Chicago’s O’Hare International Airport—would facilitate the export of agricultural and petroleum products, helping to boost trade. Strengthening trade relations with other states could further expand exports and economic cooperation. Aliyu also mentioned that Lagos, as Africa’s second-largest economy, could enhance its position with targeted investments in the blue economy. Revenue Generation Lagos continues to be Nigeria’s highest revenue-generating state, but its revenue collection potential remains underutilized. In 2023, the state generated N651 billion in internally generated revenue, the highest in the country. However, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, pointed out that Lagos’ revenue collection is still below two percent of its GDP despite its large economic size. Oyedele suggested that optimizing property taxation could generate at least N1 trillion annually, given that many high-value properties remain undervalued or untaxed. He proposed reforms like streamlining land titling, incentivizing compliance, and ensuring transparent property valuation systems to help increase revenue. Oyedele also recommended expanding personal income tax, particularly by leveraging technology to capture high-income earners, and formalizing the informal sector, especially in Lagos’ digital and creative industries. Entrepreneurs, content creators, and event planners should contribute fairly to the tax system without facing heavy burdens. Moreover, improving the ease of payment through digital platforms would encourage greater participation in the tax system. Infrastructure Infrastructure development is vital to achieving Lagos’ $1 trillion economy target. The Lagos Economic Development Unit (LEDU) report projects the city’s economy will grow from N43.06 trillion in 2023 to N54.77 trillion in 2024 and N66.47 trillion in 2025, driven by services, trade, transport, IT, and finance. The expansion of transport infrastructure, such as the Blue and Red Rail Lines, is expected to alleviate traffic congestion, reduce commuting times, and improve business efficiency. Lagos’ notorious traffic congestion has long been a challenge, costing businesses billions in lost productivity. Analysts believe expanding the rail system and upgrading the road network will help mitigate these losses, improve mobility, and enhance overall economic activity. The manufacturing sector is also expected to expand, supported by industrial hubs and export-processing zones. However, unreliable electricity remains a major obstacle, with Lagos receiving only about 1,000 megawatts from the national grid, far below the city’s estimated demand of 9,000 to 12,000 MW. This electricity shortfall forces businesses and residents to rely on costly and polluting generators, adding N5.3 trillion annually to business and household costs. To address this, analysts have called for greater investment in energy security, including renewable energy and decentralized power solutions, to provide a more sustainable and cost-effective electricity supply. Policy, Innovation, and Job Creation Achieving a $1 trillion economy will require more than infrastructure investment. Experts agree that policy consistency, economic stability, and targeted industrialization are essential to sustaining long-term growth. Analysts stress that Lagos should leverage technology and innovation to enhance productivity across key
