How Lagos Became Nigeria’s Economic Powerhouse with Record ₦1.26 Trillion IGR in 2024
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Lagos State, Nigeria’s economic powerhouse and startup capital, recorded an impressive ₦1.26 trillion ($857.57 million) in internally generated revenue (IGR) in 2024 a 54.63% increase from ₦815.87 billion ($554.59 million) in 2023. This single-year performance saw Lagos earn more than 31 other Nigerian states combined, which collectively generated ₦1.24 trillion ($841.97 million).
The states trailing Lagos in IGR include Edo, Akwa Ibom, Kwara, Kano, Kaduna, Bayelsa, Jigawa, Oyo, Osun, Cross River, Ondo, Katsina, Abia, Anambra, Ekiti, Niger, Plateau, Kogi, Zamfara, Nassarawa, Bauchi, Imo, Borno, Benue, Adamawa, Sokoto, Gombe, Taraba, Kebbi, Ebonyi, and Yobe.
Lagos’s economic strength is fueled by its vast labour force of 6.43 million people as of 2023, dominated by the 15–34 age group (2.7 million). The Pay-As-You-Earn (PAYE) tax remains the state’s most significant income source, contributing ₦705.41 billion ($479.52 million) — a 58.62% increase from ₦444.73 billion ($302.32 million) in 2023. In contrast, the combined PAYE revenue of the 31 other states stood at ₦497.95 billion ($338.49 million).
Lagos continues to position itself as Nigeria’s innovation hub, home to over 500 startups and accounting for more than half of the nation’s startup investments. Young Nigerians in tech hubs across Yaba, Lekki, and Ikeja are powering this revenue growth by creating products and digital solutions that attract global attention.
Governor Babajide Sanwo-Olu highlighted this innovation-driven growth earlier in the year, saying, “Thousands of our youths are busy at tech hubs, using technology to resolve everyday challenges. We will keep encouraging them.”
The state government has also announced plans to commit 1.5% of its annual capital budget to an innovation fund to further support its startup ecosystem.
According to Lagos’s Commissioner for Information, Gbenga Omotoso, about six million people in the state are registered taxpayers, with 4.5 million actively and consistently paying 90% of whom are under the PAYE system. By Q1 2025, PAYE already accounted for 73% of the ₦333.29 billion total revenue generated, as confirmed by the Commissioner for Finance, Abayomi Oluyomi.
Despite its strong numbers, fiscal experts note that Lagos’s IGR still represents less than 2% of its GDP. Taiwo Oyedele, chairman of the Presidential Fiscal Policy and Tax Reforms Committee, suggested that Lagos could boost its tax base by expanding personal income taxation to the digital and creative sectors.
New tax laws set to take effect in 2026 will capture freelancers and remote workers under Nigeria’s personal income tax framework, a move expected to further increase Lagos’s tax revenue — especially given the state’s dominance in digital economic activities.
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