Lagos and the Power of Internally Generated Revenue
A generation ago Lagos depended heavily on federal allocations like most Nigerian states. Beginning in the early 2000s, the state invested heavily in modernising tax administration — introducing digital taxpayer databases, improving enforcement, and reducing informal leakages. The results were dramatic: internally generated revenue rose from roughly ₦600 million per month in the late 1990s to tens of billions monthly. This revenue expansion allowed Lagos to finance large-scale infrastructure investments — including road expansion, public transport, and urban management systems — without waiting entirely on federal transfers.
Administrative reform can significantly expand fiscal capacity when incentives encourage governments to invest in revenue systems — regardless of a state's underlying economic structure.