Lagos hits N807bn revenue in early 2026, surpasses Nigeria’s subnational peers

The state’s strong tax haul, driven largely by personal income taxes, pushed it close to one-fifth of its ambitious 2026 budget within three months.

Babajide Sanwo-Olu’s administration generated N807.1 billion in revenue in the first quarter of 2026, reaching 18.2 per cent of the state’s N4.44 trillion budget, official figures show.

The performance, underpinned by a surge in internally generated revenue (IGR), reinforces Lagos’ position as Nigeria’s top revenue-earning state and signals a strong start to its fiscal year.

According to the Lagos State 2026 first quarter budget performance report, IGR accounted for the bulk of earnings at N536.37 billion, the highest by any state in the country during that period.

Tax engine powers revenue

Personal income tax remained the backbone of the state’s finances, contributing N350.37 billion, far outpacing other revenue lines. Taxes on bank interest yielded N28.47 billion, while water rates and tariff fees brought in N30.2 billion.

Other notable sources included letter of administration fees amounting to N22.11 billion while tax on contracts brought N8.77 billion into the Lagos State coffers.

Federation allocations played a smaller role in the revenue mix. Lagos received N27.93 billion as statutory allocation, N224.16 billion from value-added tax, and N14.76 billion as its share of other Federation Account Allocation Committee revenues.

Aids and grants contributed N901.99 million, while the sale of fixed assets added N1.38 billion.

The state carried forward an opening balance of N1.6 billion into the fiscal year.

Lagos did not obtain any loan within the period despite a budgetary approval of N641.96 billion for borrowing.

Recurrent costs tops disbursement

Within the same period, the state spent N715.34 billion, representing a significant portion of its earnings.

Recurrent expenditure dominated spending, with N88.2 billion used for salaries and N286.38 billion for other running costs, totaling N374.58 billion disbursed on recurrent expenditure. Capital expenditure totalled N340.76 billion.

The figures indicate that while Lagos maintained substantial investment in projects and programmes, recurrent obligations still accounted for a larger share of total spending.

Infrastructure, health lead capital releases

Sectoral analysis shows that infrastructure received the largest share of capital releases, with the Office of Infrastructure accounting for N128.4 billion.

The health sector followed with N26.45 billion, representing about 17 per cent of its N155.34 billion annual allocation.

The Lagos State Metropolitan Area Transport Authority ranked third, receiving N24.49 billion to support transport development in the state.

The revenue generated by Lagos State within the period is more than half the revenue of Akwa Ibom State, one of the top oil-producing states, within the period.

PREMIUM TIMES reported that Akwa Ibom State had N397.51 billion in revenue within the period.