Lagos’ ₦1.77tn IGR Raises a Bigger Question About Nigeria’s Uneven Revenue Capacity

Lagos State’s internally generated revenue performance in 2025 is striking not simply because of the size of the figure, but because of what the gap reveals about Nigeria’s very uneven capacity to raise revenue outside federal allocations. The numbers show a country where some subnational governments have developed substantially larger revenue bases than others, raising questions about what drives that difference and what it means for public finance across the federation.

Lagos State generated about ₦1.77 trillion in Internally Generated Revenue (IGR) in 2025, the highest figure recorded by any state or the Federal Capital Territory, according to the National Bureau of Statistics' 2025 IGR data as reported on September 24, 2026.

Across the 36 states and the FCT, total IGR reached approximately ₦5.15 trillion in 2025, compared with about ₦3.65 trillion in 2024 — an increase of roughly 40.93 per cent.

Rivers ranked second with ₦428.42 billion, followed by Enugu with ₦406.77 billion. The FCT recorded ₦356.34 billion, while Ogun generated ₦252.36 billion.

Other states among the higher-ranking jurisdictions included Delta at ₦202.49 billion, Edo at ₦132.21 billion, Oyo at ₦103.25 billion, Kano at ₦102.26 billion and Akwa Ibom at ₦100.80 billion.

At the other end of the table, Yobe recorded ₦16.01 billion, followed by Ebonyi at ₦17.18 billion and Sokoto at ₦20.48 billion.

The NBS methodology distinguishes between tax revenue and revenue generated by MDAs. The 2025 national total comprised approximately ₦3.79 trillion in tax revenue and ₦1.36 trillion from MDAs.

PAYE was the largest individual tax component at about ₦2.64 trillion, followed by withholding tax at ₦503.46 billion and other taxes at ₦300.21 billion.

NBS's earlier IGR publications similarly identify taxes and MDA revenue as the two broad components of state-level IGR.

The most revealing part of the 2025 figures may not be Lagos' ₦1.77 trillion by itself. It is the distance between Lagos and much of the rest of the country.

The 22 states at the lower end of the ranking listed in the report collectively generated about ₦909.35 billion. Lagos therefore generated roughly ₦860 billion more than those 22 states combined.

That comparison should be handled carefully. It does not mean Lagos generated more revenue than Nigeria's other 35 states collectively. It means one state generated almost twice the combined IGR of the 22 jurisdictions at the lower end of this particular ranking.

That distinction matters because IGR is not simply a measure of how well a government collects taxes. It also reflects the economic structure and taxable activity available within a jurisdiction.

A state with a large formal workforce, substantial commercial activity, property markets, corporate headquarters and a broad consumer economy naturally has a very different revenue base from a predominantly rural state with fewer large formal-sector employers.

Lagos therefore provides an important case study, but its numbers cannot simply be transplanted to every other state.

One interpretation is that the figures demonstrate the potential of stronger domestic revenue mobilisation.

From this perspective, the increase in total state IGR to more than ₦5 trillion suggests that subnational governments have significant room to strengthen internally generated resources. A larger domestic revenue base can potentially give states greater fiscal room to finance infrastructure and public services without depending entirely on federal transfers.

The alternative interpretation is that the enormous disparity exposes the structural limitations facing many states.

A state collecting ₦20 billion or ₦30 billion in annual IGR operates within a fundamentally different fiscal environment from Lagos, where the figure is measured in trillions. Increasing collection efficiency alone cannot instantly create the economic activity necessary to produce Lagos-level revenues.

The two perspectives are not necessarily contradictory. Better revenue administration may increase collections, while the underlying size and structure of an economy still place limits on how much revenue a state can realistically generate.

Lagos' position also has a historical dimension

Lagos has consistently occupied the top position in NBS's state-level IGR reports.

For example, NBS reported that Lagos generated ₦815.86 billion in 2023, compared with ₦211.10 billion for the FCT and ₦195.41 billion for Rivers.

Earlier NBS data also placed Lagos ahead of other jurisdictions, with the state recording ₦753.46 billion in 2021 and ₦659.99 billion in 2020.

The 2025 figure therefore fits into a longer pattern rather than representing an isolated jump.

The scale of the increase also illustrates how dramatically the nominal size of state revenues has changed over time. But that growth should not automatically be interpreted as an equivalent increase in real fiscal capacity: inflation, changes in economic activity, tax administration and the composition of revenue all matter when comparing figures across years.

For states outside the largest revenue centres, the more useful question may be less about trying to reproduce Lagos' absolute figure and more about identifying realistic sources of sustainable domestic revenue.

The 2025 figures show that Nigeria's states are operating with very different revenue capacities. Some have large formal-sector tax bases; others have smaller economies and fewer taxable businesses.

That difference has implications for development planning.

A state with relatively modest IGR may remain heavily dependent on federal transfers to finance recurrent expenditure and capital projects. A state with a broader domestic revenue base has more room to plan around its own resources.

But there is also a limit to how aggressively states can pursue revenue. Higher collections that come primarily from expanding the number of people and businesses paying legitimate taxes are different from simply increasing the burden on existing taxpayers.

That distinction will become increasingly important as states search for additional revenue.

Nigeria's state-level revenue picture ultimately points beyond Lagos.

If the 36 states and FCT generated ₦5.15 trillion in IGR in 2025, the question is how much of that revenue can be converted into better public services, infrastructure and economic opportunities.

Revenue collection is only one side of public finance. The other is what governments do with the money collected.

For Lagos, the enormous revenue base creates a larger fiscal pool. For states near the bottom of the ranking, improving collection systems may help, but expanding productive economic activity is likely to be equally important.

The contrast also underlines why comparisons between Nigerian states should account for differences in population, economic structure, formal employment, commercial activity and taxable income rather than treating IGR figures as a simple league table.

Lagos' ₦1.77 trillion is an important number, but the more consequential question is what Nigeria's governments can achieve with the revenue available to them.

The data show a country in which domestic revenue is growing, but where the capacity to generate that revenue remains highly concentrated.

For Lagos, the challenge is translating a huge revenue base into measurable public value. For lower-revenue states, the challenge is broader: improving collection without suffocating economic activity while building the productive base that can eventually generate more sustainable revenue.

Ultimately, the 2025 IGR figures tell two stories at once. They show that Nigeria's states are capable of generating substantially more domestic revenue than in previous years, while also exposing just how uneven that capacity remains across the federation.

The next debate should therefore move beyond asking which state collected the most and towards a harder question: how can Nigeria turn uneven revenue capacity into more balanced economic opportunity and better public services across its states?