The federal capital of Nigeria was relocated from Lagos to Abuja in 1991 though, Lagos still remains the most viable state in Nigeria till today economically; no wonder is tagged the commercial capital of Nigeria and the economy hub of Africa. Nigeria though is Africa’s most populous country with a population of over 170 million; Lagos megacity is the nation’s economic nerve centre with over 2,000 industries. 65% of the country’s commercial activities are carried out in the megacity. Two of the nation’s largest seaports -Apapa and Tin-Can Ports are located in Lagos megacity and a new one is planned for the Lekki Free Zone. The Business News (2014) stated that Lagos Megacity is arguably the most economically important State in the country.
Research has proved that Lagos megacity is set to become the continent’s 13th biggest economy, with a per capital income set at about $2,900 which is currently double the amount of the national average of $1,700. According to the Punch Newspaper (2015), the GDP of Lagos megacity is estimated at $91bn. The Executive Governor of Lagos State Mr Akinwunmi Ambode, is reported to have in August 2015 declared that the GDP of Lagos State has hit US131bn, which is per capita of US$5620.87 (Ayinla, 2015).
The GDP of the formal economy of Lagos is estimated to be $136.6 billion contributing 25% to the GDP of Nigeria as at August 2015. The GDP has an estimated growth rate of 10% and it is expected that by 2025 the GDP will be $355billion.
The state’s contribution can be attributed to the following factors:
• Large investments by both local and foreign investors
• Sound fiscal policies by the state government
• Favourable business and economic conditions
• Its prime location in West Africa, serving as an access point to many other markets in Africa
According to the governor of the state, Akinwunmi Ambode at the town hall meeting held in Ikorodu in January this year, “As we celebrate entering a new year, we thank you all for your support and cooperation last year. It was your backing that enabled us to achieve the modest successes we recorded last year and commence the transformation of the landscape of our State. In the last year, we delivered on our promises to Lagosians despite the harsh economic climate. “Despite the harsh economy, our State budget performed at 82 percent. Total Revenue Generated was N503.7bn representing a performance of 78 percent; Total Recurrent Expenditure was N281.33bn representing a performance of 92 percent, while Total Capital Expenditure was N387.60bn or 76 percent performance.” This can as well be interpreted as the state that generated the highest Internal Generated Revenue (IGR) amongst all the 36 states of the federation despite the harsh economy that also affected exchange rates.
Lagos state is a home to a multitude of multi-national companies because of its favourable economic conditions and vast population. This combination provides a large market for any product or service that is launched in the state.
Lagos state has a population of 21 million as at January 2015, making it Africa’s largest city and the 3rd largest city in the world. The population has an annual growth rate of 3.2% than is estimated to be over 30 million by 2025. The large market creates a viable market for manufacturing and retail of consumer goods and other services. Lagos also happens to be the most learned state in Nigeria with over 45% of the skilled manpower in Nigeria located in Lagos. The state has a literacy rate of 92% that is significantly higher than the national average of 56%.
Lagos State has a total landmass of 1380.7 square miles (3577 square kilometres) and is bound on the south by the Atlantic Ocean. Lagos is a state of aquatic splendour as over 30% of the land mass comprises of lagoons, creeks and islands.
While the economy of metropolitan Lagos has enormous competitive assets, it faces challenging trends in rapid population growth, urbanisation, relentless demands for infrastructure as well as macroeconomic pressure.