Internally Generated Revenue (IGR) constituted 61% of Lagos State’s Q1 2025 total receipts

  • Internally Generated Revenue (IGR) accounted for 61% of Lagos State’s Q1 2025 receipts.
  • VAT was the second-largest funding source, contributing 22%.
  • Loans made up 8% of total inflows for the quarter.
  • Opening balance accounted for 4%, indicating a moderate carryover from the previous year.

Lagos State’s Q1 2025 inflows highlight the state’s heavy reliance on internally generated revenue (IGR), which accounted for 61% of total funds. This dominance reflects Lagos’ strong tax administration capacity and its ability to sustain governance largely independent of federal allocations. The state’s total fund composition reveals a diversified yet uneven structure, with VAT contributing 22% and loans accounting for 8%, while other streams, such as statutory allocation (2%) and FAAC (3%), play minimal roles.

The reliance on IGR is significant because it highlights Lagos’ economic strength compared to many other Nigerian states that heavily depend on federal allocations. With a vibrant business ecosystem, a large population base, and stronger infrastructure, Lagos has positioned itself to thrive on its own funding sources. This financial independence not only strengthens the state's fiscal resilience but also gives it greater autonomy in executing development projects without being overly constrained by federal transfers.

The broader implication of this inflow structure is that Lagos has created room for a more predictable financial system, relying less on volatile oil-related allocations and more on a stable stream of internal taxes and levies. This not only supports long-term planning but also makes the state better equipped to withstand national economic shocks.

Source:

Lagos State Government Budget Implementation Report

Period:

Q1 2025
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Enugu State recorded the sharpest IGR increase in 2024, growing over fivefold
  • Enugu led the country in IGR growth in 2024 with a 433% increase.
  • Bayelsa, Jigawa, Kano, and Osun also experienced large year-on-year increases, indicating widening fiscal activity across regions.
  • Lagos, Rivers, and the FCT recorded slower growth rates but still generated the largest total revenues.
  • The fastest growth often came from states focused on reforming tax systems or broadening local revenue sources, rather than from being traditionally big or wealthy states alone.

Lagos’ IGR in 2024 was over 3x more than all other South West states combined
  • Lagos drives most revenue in the South West, accounting for the clear majority of the region’s IGR.
  • Each geopolitical zone has one dominant state that shapes its revenue profile.
  • Fiscal capacity remains heavily skewed toward a few urban and resource-rich states.

Lagos State generated the vast majority of Nigeria's IGR at ₦1.3 trillion, accounting for over 35% of the ₦3.7 trillion total IGR
  • Nigeria’s total IGR in 2024 was ₦3.7 trillion.
  • Lagos State generated ₦1.3 trillion, accounting for over 35% of the national IGR.
  • Rivers State (₦317.3 billion) and the FCT, Abuja (₦282.4 billion) ranked second and third, respectively.
  • The South West led regionally with ₦1.7 trillion in total IGR.
  • The North East recorded the lowest regional IGR at ₦129.8 billion.
  • Economic disparity between regions remains wide, with Lagos alone outpacing entire regions.

Nigeria’s South East region is the only one where MDAs' revenue (60.9%) exceeded Total Tax Revenue (39.10%) in 2024
  • The South East is the only region where the revenue of MDAs (60.9%) exceeded tax revenue (39.1%).
  • Other regions relied more heavily on tax revenue, with the South South leading at 85.25%.
  • The North East and North Central followed closely, with tax contributions of 79.9% and 79.15%, respectively.
  • The South West generated 75.04% of its IGR from taxes, indicating a strong formal revenue structure.
  • The North West maintained a more balanced mix, with 58.54% tax and 41.46% MDAs’ revenue.

Lagos and Rivers have dominated Nigeria’s revenue rankings since 2008
  • A total of ₦20.45 trillion in Internally Generated Revenue (IGR) has been recorded nationwide since 2008.
  • Lagos State generated ₦1.26 trillion in 2024, maintaining its position as the top revenue-generating state.
  • For five consecutive years, Yobe and Taraba have consistently ranked among the bottom five states in revenue generation.
  • FCT IGR records began in 2018.
  • Enugu State recorded a remarkable 433.03% year-on-year increase in 2024.
  • Ebonyi (–57.27%), Ondo (–24.70%), and Yobe (–0.99%) were the only states that experienced a decline in IGR in 2024.

The manufacturing sector leads Nigerian MSME revenues with ₦8.27 million monthly, far outpacing service sectors
  • Manufacturing records the highest monthly revenue at ₦8.27m, nearly double that of the next sector.
  • Healthcare (₦5.02m) and Transportation (₦3.70m) follow, reflecting essential service demand.
  • Industries like Marketing & Advertising (₦191k), Food & Beverages (₦320k), and Education (₦440k) earn significantly less on average.
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