Lagos State has reinforced its position as Nigeria’s economic engine, accounting for approximately one-third of the country’s total sub-national revenue in 2024, according to fresh statistics released by the National Bureau of Statistics.
The newly published “Internally Generated Revenue at State Level 2024” report, announced Monday via the bureau’s official social media channels, reveals that Nigeria’s 36 states and the Federal Capital Territory collectively generated ₦3.6 trillion in internally generated revenue last year — a substantial 49.7 percent increase from the ₦2.43 trillion recorded in 2023.
Lagos’s Unprecedented Lead
Lagos State’s IGR stood at ₦1.26 trillion, dwarfing its closest competitors and underscoring the commercial capital’s outsized contribution to Nigeria’s fiscal landscape. The state’s revenue generation capacity is nearly four times that of Rivers State, which secured second position with ₦317.3 billion.
The gap between Lagos and other sub-nationals highlights the concentration of economic activity in Nigeria’s former federal capital, where a vibrant business ecosystem, robust port operations, and a massive consumer base continue to drive tax revenues.
Top Performers Show Regional Strength
Following Lagos and Rivers, the Federal Capital Territory claimed third place with ₦282.4 billion, while Ogun and Enugu states rounded out the top five with ₦194.9 billion and ₦180.5 billion, respectively.
The strong performance of southern states dominates the upper tier of the rankings, with Delta and Edo states also featuring prominently at ₦157.8 billion and ₦91.2 billion, respectively. However, northern states like Kano (₦74.8 billion) and Kaduna (₦71.6 billion) demonstrated significant revenue generation capacity, breaking the regional pattern.
Northern States Struggle at Bottom
The revenue landscape tells a different story in Nigeria’s northeast and northwest regions, where five states recorded the lowest IGR figures. Yobe State brought up the rear with just ₦11.1 billion — roughly 114 times less than Lagos’s total.
Ebonyi (₦13.2 billion), Kebbi (₦17 billion), Taraba (₦17.5 billion), and Adamawa (₦20.3 billion) completed the bottom five, raising questions about economic development disparities and revenue generation capacity across Nigeria‘s federation.
PAYE Drives Tax Revenue
Analysis of the revenue composition reveals that Pay-As-You-Earn (PAYE) income tax remains the dominant source of state revenue, contributing ₦1.86 trillion — approximately 69.84 percent of total tax collections during the period. This heavy reliance on employment-based taxation underscores the critical importance of formal sector job creation to state finances.
The NBS report categorizes IGR into two broad streams: tax revenue and revenue from Ministries, Departments, and Agencies (MDAs). Tax sources include PAYE, direct assessment, road taxes, stamp duties, capital gains tax, withholding taxes, other taxes, and local government revenues.
Notably, capital gains tax contributed the least to state coffers at just ₦10.57 billion, suggesting limited capital market activity or potential challenges in tax collection infrastructure.
Economic Implications
The 49.7 percent year-on-year growth in collective IGR signals improving revenue mobilization efforts across Nigerian states, though the massive disparities between top and bottom performers highlight the uneven economic development plaguing Africa’s most populous nation.
For Lagos, maintaining its revenue dominance comes with increased pressure to deliver infrastructure and services to a rapidly growing population. For struggling states, the figures underscore the urgent need for economic diversification and improved tax administration.
As Nigeria continues to grapple with dependence on oil revenues at the federal level, the ability of states to generate internal revenue becomes increasingly critical to fiscal sustainability and development financing across the federation.
WHAT YOU SHOULD KNOW
Lagos State generated ₦1.26 trillion in 2024 — accounting for one-third of Nigeria’s total sub-national revenue and nearly four times more than any other state.
While Nigeria’s states collectively achieved an impressive 49.7% revenue growth to ₦3.6 trillion, the figures expose a stark economic divide: the top five states generated ₦2.24 trillion (62% of total), while the bottom five managed just ₦78.99 billion combined.
This 28-to-1 disparity underscores Nigeria’s urgent need to address regional economic imbalances and help struggling states — particularly in the northeast and northwest — build sustainable revenue capacity beyond federal allocations.
The dominance of PAYE tax (70% of collections) also signals that Nigeria’s revenue future depends heavily on formal sector job creation across all states, not just Lagos.
