Effective Tax Collection Grew Lagos Revenue In 2025 - Abayomi Oluyomi

本站添加: 2026-05-27

[00:00:04]We begin in Lagos with a ministerial briefing from the honorable Commissioner of Finance Abayomi Oluyomi. This was on Friday saying that Lagos total revenue had increased by 13% to 2.6 trillion naira. The internally generated revenue climbing by 18.3% to 1.87 trillion and tax revenue climbing by 40% from 1 trillion to 1.4. We are happy to have the honorable Commissioner for Finance Abayomi Oluyomi with us in the studio today. Honorable Commissioner, thank you so much for joining us. Thank you.

[00:00:33]You're very welcome, sir. Please have a seat. Thank you so much for joining us.

[00:00:36]Thank you. We appreciate you taking the time to see us. It's a busy year for a lot of people.

[00:00:42]Um so, honorable Commissioner, I wanted to start of course with the the revenue drivers for Lagos. I just want you to expand a little bit more on that ministerial briefing that that you had.

[00:00:50]Just can we talk about how Lagos made more money essentially?

[00:00:54]Well, um good morning, Rotus. Good morning, sir.

[00:00:57]Thank you for having me here.

[00:00:58]Uh it's good to talk about Lagos. You know, Lagos, we say this is Lagos.

[00:01:02]>> Yes, indeed. A state of aquatic splendor, you know. Um you know, like we say depending on where you're looking at and which which um which data you are you consult, Lagos is probably the sixth largest economy in Africa.

[00:01:15]>> Correct. And of course, you know, as a big state, uh we depend having about 25 million people living in Lagos.

[00:01:23]Um you know, to take care of 25 million people is not very easy.

[00:01:26]>> Correct. So, of course, that dovetails into our internally generated revenue.

[00:01:30]Uh in Lagos State, really and truly, our revenue is, you know, is of three different um categories. Number one, we have the one that we call uh internally generated revenue. Of course, that include tax revenue and non-tax revenue.

[00:01:44]And of course, the last one is the federal transfers, you know, the one that comes from the from the federation.

[00:01:48]So, if you look at the breakdown, um about 20% of our revenue is from federal transfers, but about 80% of it is generated by us locally, you know, because, you know, Lagos has a big population. Uh and if you look at it, major part of it is from tax. So, um that's how we generate our revenues. For now, we have close to 26,000 companies, you know, that's that's them, you know, that's they have staff pay us tax, that is PAYE, pay as you earn. So, out of that 25,000 companies, you can imagine how many the number of people that pay tax. And of course, we also have what we call uh informal taxes, informal taxes from and and fees, you know, from different levies and different, you know, when we discharge services and all of that in Lagos. So, we also earn taxes from that. But majorly, the greatest part of our internally generated revenue is from taxes, which is pay as you earn.

[00:02:38]That is, you know, employees of companies, you know, which is, you know, of course, particularly those um those those global organizations we have in Nigeria, you know, they pay tax. They know the reason why they have to pay tax. They know it's their civic responsibility. So, that's that's how um that's in a nutshell where our taxes come from in Lagos State. Can can you speak to the using technology, using digital channels um to make it easier to collect um tax in Lagos State?

[00:03:07]>> Okay, so when we talk about tax collection and tax administration, you know, the the this our strategy our strategy as far as revenue generation is concerned, you know, is a deliberate strategy, intentional strategies focuses on a number of things. Number one, it focuses on ease of collection. And how do we do that? We leverage on technology in Lagos State to collect our tax. There are different um technology channels that we use.

[00:03:34]Number one, we have what we call Lagos Revenue Portal. Lagos Revenue Portal is a centralized data system that, you know, allow us to be able to to administer tax and to be able to track taxes. Secondly, we have what we call Enterprise Tax Administration System, e-tax system. E-tax system relies on technology to collect tax, to administer tax, to also to organize our tax in a way that we're able to predict. In fact, we have what we call data analytics. We also make use of data analytics. Data analytics is also useful by us to be able to predict, to be able to project, to be able to, you know, we do a lot of things with tax. And of course, we have what we call multi-system payment system multi-payment system. You know, we rely on different payment channels. There are several of them. Is it that of course we have the bank, we have the apps, we have the WeChat WeChat, we have we have several multi-payment systems. So, those are the areas where we use what we use to collect our tax and to administer our taxes. Fantastic. Now, also I'm also going to talk to you about other revenue channels. We've been hoping to get the the head of the Lagos Parking Authority on the show one of these days.

[00:04:43]And I understand they're Lagos is looking at digitizing its parking in order to collect fees. What can you speak to how that could contribute to your revenues and how that could to could could work out going forward?

[00:04:54]Okay, so so the the park fees, okay, first and foremost, let me because there's a lot of misnomer around revenue in Lagos State.

[00:05:02]You know, and that was why I had to let you know that the greatest percentage of our taxes come from pay as you earn. You know, you meet a lot of people outside, they tell you that well, you know, you are you are using my my my fees, you are using It forms an insignificant part of our revenue. But, the informal sector is also a very large economy that by the time we what we are doing by the time we finish what we are doing now, you know, we are doing a lot of transformation in that area. It will also form a major part of our tax system. So, as far as park park authority is concerned, you know, they have they are now trying to digitize that tax collection system using what we call cashless park payment system. Now, basically, you You what it means is that the it's it's very easy for you to be able to, you know, to be able to pay when you park and all of that. You know, you know, basically people will tell you organizations that have parking outside and all of that will have to, you know, come onto the system. But, let me tell you the advantage of that. I asked you to do it. It is It's not majorly revenue that we drive when we bring things like that outside. You know, you need to look at some other areas that impact people.

[00:06:09]Number one, we call we you know, it's gives jobs to the people around that area. Because they will be, you know, they will be employed. So, it gives them job.

[00:06:19]Secondly, it impacts the environment. You know, the kind of chaotic traffic we have in Lagos. That's that traffic system will be reorganized because parking system now, because of the system they have, the way they are going to organize it, is such that that chaotic parking system and chaotic traffic system that we have is, you know, is taken care of. And lastly, of course, it gives us revenue because it's also cashless, because it has been digitized using that that enterprise system to collect. We call it cashless park and pay system, you know. So, so those are But, like I said, it is is not more of is not more of revenue that we're going to collect. It's much more of the the what it will bring to the system. It's much more of that that you know, solving the problem of traffic, solving the chaotic parking system, you know, reorganizing the society, making the society much more orderly. And of course, you're also giving back to the environment and also giving job opportunities to to the people around all of those areas. So, it's a multi-multi-dimensional, you know, benefit if you look at it. Is technology going to get you most drive Lagos revenue operations going forward?

[00:07:28]Is that Is that what you're going to be leveraging on? Okay. So, let me be sincere with you. In Lagos State, we we we know part of our transformation, if you look at it, we have what they call e-government in Lagos. So, Lagos state right now has moved totally from manual operations in terms of revenue collection, in terms of governance generally, to e-governance. And part of the e-governance is also the one I I I spoke to you about. So, it because it brings efficiency, okay, to government. It brings efficiency to revenue administration when you use digital platforms to make sure and of course it also makes you much more efficient. Now, one of the bane of most public sector is corruption. So, it will also drive out corruption. So, our focus and we are enhancing it. We Some of these things have been introduced as way back as 2 years ago. So, we are just re-enhancing it. We are just making sure that we deepen all of those things.

[00:08:23]Revenue portal covers all the about 169 MDAs in Lagos state now. So, you that means that all of our MDAs have, you know, they have they are already on the platform. So, the the era of manual collection is gone. Now, digital payment is is is what's what what's what what's what what we are doing now. Fantastic. You talked about revenue, let's touch on debt. Lagos, of course, being the largest having the largest income, largest IGR, largest budget in the state. I think it would be natural that the debt would also be be higher. But, you know, I we did notice the US dollar debt has come down. I mean, we're just going back to when His Excellency Governor Sanwo-Olu came into office from 2019 to 2025, 16% down to about 1.7 billion. Domestic debt is up to about from 444 billion to 1.2 trillion as of 2025. Looking at 2019-2025. What is your approach to Lagos debt sustainability? There's been a lot of talk around the sustainability of the country's debt. Everybody's talking about debt now. So, from Lagos perspective, how how do you view debt?

[00:09:22]Okay, so let me contextualize it.

[00:09:24]>> Yeah.

[00:09:25]Lagos, when I came here I said Lagos is like the sixth largest economy in Africa.

[00:09:29]>> Yeah.

[00:09:30]And in Lagos that you have 25 million people. We also said Lagos has about 259 million dollars GDP. It's a very large economy. Yeah. But let me tell you something.

[00:09:41]The infrastructural deficit in Lagos is over 10 trillion naira.

[00:09:46]But this is if you want Lagos to be up and running to you know Lagos is is is a mega city. And of course when you study mega cities the kind of infrastructural requirements in mega cities if you want to do that in Lagos you are you're going to be spending around 10 trillion naira.

[00:10:01]Now the question is do we have that amount? Can our budget take care of it?

[00:10:05]Can revenue you know take care of that?

[00:10:07]No. So for me really when we talk about debt management or debt sustainability or debt strategy generally in Lagos state it it it it is important to put it in a proper perspective. Number one you have to be looking at what we call solvency.

[00:10:27]Solvency is can you pay your debt as I lend you? As I lend you and you are not illiquid or you don't you don't go bust.

[00:10:38]Today the debt service ratio that is measured by the debt service ratio. The debt service ratio in Lagos or of Lagos state is about 20%.

[00:10:47]That is way way way way below the threshold below the threshold of World Bank that is 30% and below the threshold of Nigerian national threshold that is 40%. What that says is it gives you a lot of room. It says it also says that only about 20% less than 20% of your revenue that you generate is used to service your debt. So in so you are comfortable. The issue of going going bust does not arise. So that's number one. Then number two people talk about debt to GDP ratio.

[00:11:19]The debt to GDP of Lagos less than 5%.

[00:11:23]The permissible threshold is over 20%.

[00:11:26]People also talk about total debt to total revenue to total debt.

[00:11:30]I mean total revenue to total debt as a as been, you know, uh measured by World Bank is 250%. In Lagos, we're just about less than 100%. So, in terms of sustainability, we are Lagos State debt sustainability is very high. Secondly, we talk about the issue of market risk.

[00:11:49]Now, in that area of market risk, I'll be talking about the percentage of portfolio of Lagos State that is exposed to risk. Now, you you did mention that the percentage of the naira of dollar borrowing is coming down gradually. Now, let me tell you our strategy there.

[00:12:06]There are two things that we do. Number one, our strategy now is that we do not contract any foreign denominated liabilities any longer because of the volatilities of the exchange of the of the currency. Then, number two, we are also we've also lengthening the tenors of our borrowing. So, we are we're looking at borrowing 20 years, you know, raising raising fund of 20 years minimum. So, what also that does is to also reduce your debt service, you know, liability. And then, of course, we're also talking about issues like the instrument itself. If I tell you what we are doing now, what we are doing now is that we are also trying to raise fund from sources that are very very cheap as far as cost is concerned because we we we have what we call uh um financial different financial options.

[00:12:59]Right now, we're working on one that that it will also come out. You know, in Lagos State, we have a lot of what we call assets. Lagos State assets, you know, those assets are idle. Assets such as schools, such as hospitals, such as bridges, such as, you know, debts because all of those they are idle. So, what we are doing right now is to package those assets together to raise liability to fund a critical infrastructures. But, the good thing about it is this, it's not on our on our balance sheet.

[00:13:27]>> Got you. It's not on our balance sheet.

[00:13:29]So, you just get, you know, people to package it and then they sell it. But, it's it's also you're not also not selling it, you're just using it, you're leveraging on it to raise liabilities for over time over a long period of time. Honorable Commissioner, look, I could have this conversation with you much longer. Lagos State of course doing so much, but I want to thank you so much for your time. The Honorable Commissioner of Finance, Abayomi Oluyomi for Lagos State, thank you so much for >> Thank you so much.

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