Lagos State has solidified its status as one of Africa's leading economic hubs, with its Gross Domestic Product (GDP) reaching an impressive $259.75 billion based on purchasing power parity (PPP). This milestone places Lagos as the second-largest city economy on the continent, trailing only Cairo, Egypt.
The announcement was made during the official launch of the Lagos Economic Development Update (LEDU) 2025 on Wednesday, which highlighted the state's economic growth trajectory and future projections.
Economic Growth and Resilience
Lagos recorded substantial economic growth in the first half of 2024, expanding to N27.38 trillion, a significant jump from N19.65 trillion in 2023. This surge underscores the resilience of Nigeria's commercial nerve center despite economic headwinds and ongoing structural reforms.
However, the report noted that Lagos' tax-to-GDP ratio remains low at 2.3%, indicating the need for improved revenue generation strategies.
Key 2025 Economic Projections
Looking ahead, the Lagos State Government has set ambitious targets for the 2025 fiscal year, forecasting sustained economic expansion. Key projections include:
- GDP Growth: Expected to rise from N54.77 trillion in 2024 to N66.47 trillion in 2025, with real GDP growth estimated between 5.02% and 6.49%.
- Sectoral Expansion: The service sector will maintain its dominance, with anticipated improvements in agriculture and industrial production. Economic stability is expected to benefit from lower petrol prices and a more stable naira-dollar exchange rate.
- Inflation Outlook: Headline inflation is projected at 34.2%, while food inflation is forecasted to reach 34.9%.
- Revenue Generation: The government aims to generate N2.79 trillion in revenue, emphasizing fiscal discipline and diversification of income sources.
Investment Opportunities and Challenges
With its expanding economy and strategic reforms, Lagos remains a prime destination for investors in infrastructure, technology, real estate, and manufacturing. However, experts caution that challenges such as high inflation, forex volatility, and infrastructure gaps must be addressed to sustain long-term growth.
As Lagos continues to evolve into a global economic powerhouse, the state's leadership remains committed to driving policies that enhance business growth, attract investment, and improve the quality of life for residents.
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