The Lagos government will consider issuing a new bond and taking out loans to raise N1.11 trillion, which would add to the projected N3.12 trillion in Internally Generated Revenue (IGR) for next year, along with federal allocations, to finance the N4.237 trillion 2026 budget.
The government secured N244.8 billion green bond last week for infrastructure, and Governor Babajide Sanwo-Olu said on Tuesday that the state will issue another bond and access fresh loans within the State’s fiscal sustainability parameters to finance the N4.237 trillion spending plan proposed to the lawmakers to tackle the 2026 priorities, which include the perennial flood challenging the state.
“Sanwo-Olu planned to substantially finance the expenditure from a projected Internally Generated Revenue (IGR) of N3.12 trillion and federal transfer, while the balance would be augmented by issuance of bonds and loans that would be within the State’s fiscal sustainability parameters”, stated Gboyega Akosile, media aide to the governor, in a statement.
As of October 2025, Lagos State’s foreign debt stock is $1,049,792,354.34, while its local debt stands at N1,041,357,087,184.18.
The budget proposal, anchored on four key pillars of growth — a human-centred approach, modern infrastructure, a thriving economy and effective governance, and aligned with the administration’s T.H.E.M.E.S+ Agenda and the parastatal monitoring framework, is christened “Budget of Shared Prosperity”, and designed to widen access to opportunity, deepen social support systems, expand job creation, accelerate infrastructure delivery, and push new frontiers of development.
Breakdown shows that recurrent component is N2,052 trillion, representing 48 per cent of the total budget, and a capital expenditure of N2,185 trillion, which represents 52 per cent of the budget.
In 2026, N147 billion will be allocated to security, while N249 billion is proposed for Education. Health expenditure was raised to N339 billion, while the State planned to spend N236 billion on the Environment. Other sectoral allocation shows N124 billion is earmarked for housing, N848 billion for the General Public Service sector, N55 billion for recreation and N70 billion for Social Protection.
Of the total N2,185 trillion capital components, N1.372 trillion will go to Economic Affairs sector — a cluster of key MDAs, comprising Tourism and Creative Arts, Agriculture, Transportation, Works and Infrastructure, Industry and Investments, Wealth Creation and Employment, Energy and Mineral Resources, Waterfront Infrastructure, and Commerce.
The balance, N813 billion is expected to go into expanding access to quality education, strengthening healthcare, widening social protection and accelerating affordability in housing. The Governor said focus would shift from building infrastructure to integrating it.
The governor said Lagosians would witness unprecedented interventions in urban renewal and waste management systems in order to bolster the State’s flood resilience, while there also would be a push for project completion, while advancing smart city solutions for better connectivity, traffic management and public service delivery.
He also promised to accelerate economic growth by strengthening MSMEs, encouraging circular economy initiatives, empowering start-ups, advancing innovation across sectors, while supporting women, youth, and older persons living with disabilities.
“Today, our Lagos stands tall as a continental economic powerhouse, Africa’s second-largest city economy after Cairo in Egypt. This status is no accident; it is the product of consistency, productivity, and the unyielding Lagos spirit. Our State is maturing, diversifying, and embracing new frontiers across investment, tourism, technology, and sustainable innovation.
“As we prepare for the next phase of growth, our mission is to eradicate poverty, expand opportunity, and build a Lagos that works for everyone. This is why the 2026 Budget of Shared Prosperity is anchored on four strategic pillars that align with the evolved T.H.E.M.E.S+ Agenda and the Parastatal Monitoring Framework.
“The Year 2026 Budget as proposed has a total budget size of N4,237,107,009,308, from which comprises a total revenue of N3,993,774,552,141 and deficit financing of N243,332,457,167. We will push major projects to completion, expand drainage systems, and advance smart city solutions for better connectivity, traffic management, sustainable housing, and public service delivery. Our aim is to fast-track the transformation of Lagos into an engine of opportunity and a global hub for innovation, trade, and enterprise.”
The Governor said: “The Year 2026 Appropriation Bill is a reaffirmation of our collective belief that Lagos can continue to rise, continue to lead, and continue to create opportunities for every resident. Next year will be the last full year of our administration, making it a pivotal period for consolidating our legacy and ensuring a strong, successful finish.
“We remain determined to complete all ongoing and initiated projects, and we will continue to engage Lagosians so that their priorities consistently guide our actions. Having consistently laid solid foundations in the past years, we are now moving into a phase of accelerated impact. The investments we are making are deliberate, inclusive, future-focused, and prosperity-driven.”
Speaking on the performance of the current year budget, Sanwo-Olu said Lagos had implemented 81 per cent of the 2025 budget as at the last day of September, with actual capital expenditure standing at N1,238 trillion.
In 2025, Sanwo-Olu disclosed that Lagos secured over N1 trillion in new investment commitments, noting that the development reflected heightened investor confidence and the impact of our forward-looking industrial agenda. He attributed the investment commitments to President Bola Ahmed Tinubu’s reforms which created new revenue pathways for Lagos to meet its growing needs, stressing that the President’s Renewed Hope Agenda had been bearing fruits despite the challenges facing the country.
The Assembly Speaker, Mudashiru Obasa, described the proposal as “comprehensive budget”, noting that it aligned with Lagos’ aspirations for growth and development. The Speaker said the budget prioritised critical sectors fundamental to sustaining Lagos’ position as Africa’s leading economic hub.
Obasa pledged the Assembly would thoroughly scrutinise the 2026 budget to ensure it matched Lagosians’ aspirations.
He said: “We have all listened to the Governor who has just explained how the wealth of our state will be utilised for our common good in 2026. The responsibility now lies with this honourable House to meticulously perform its constitutional duty.
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