Understanding Lagos N4.2 Trillion 2026 Budget Proposal as Sanwo-Olu Hands Over to House of Assembly

Lagos State government has unveiled its biggest budget ever — N4.2 trillion for the year 2026. Governor Babajide Sanwo-Olu presented the proposal to the Lagos State House of Assembly, tagged as“Budget of Shared Prosperity.”

Governor of Lagos State, Mr. Babajide Sanwo-Olu presenting the Y2026 Budget Estimates to the State House of Assembly, at the Assembly complex, Alausa, Ikeja, on Tuesday, 25 November 2025.

The budget in simple terms

The government says the 2026 budget focuses on four major areas:

• People-focused development (jobs, welfare, social support)
• Modern infrastructure (roads, bridges, housing, e.t.c)

• A stronger economy (support for small businesses, industries)

• Effective governance (improved service delivery)

All these align with the Governor Sanwo-Olu’s T.H.E.M.E.S+ development agenda.

Where Will the Money Come From?

Lagos plans to fund the budget using:

• Projected N3.12 trillion from Internally Generated Revenue (IGR), which includes taxes, levies, and other state earnings.

• Federal allocations.

• Loans and bonds to cover the remaining amount.

According to the Governor, the budget size reflects the growing needs of Lagos, which is now considered Africa’s second-largest city economy after Cairo.

 What Will the Money Be Spent On?

The spending is split into:

- Recurrent expenditure (salaries, overheads): N2.052 trillion (48 percent of the total budget)

- Capital expenditure (shifting from building infrastructure to integrating it): N2.185 trillion (52 percent)

Key Sector Allocations:

1. Security: N147 billion
2. Education: N249 billion
3. Health: N339 billion
4. Environment: N236 billion
5. Housing: N124 billion
6. General Public Service: N848 billion
7. Recreation: N55 billion
8. Social Protection: N70 billion

A major chunk of N1.372 trillion will go to the Economic Affairs sector, which includes Transportation, Works, Water Infrastructure, Agriculture, Tourism and Creative Arts, Energy, Commerce and Investment.

What Projects Will Lagos Prioritise?

Governor Sanwo-Olu said the State would experience unprecedented interventions in 2026 including:

Governor of Lagos State, Mr. Babajide Sanwo-Olu addressing the House and guests during the presentation of the Y2026 Budget Estimates to the State House of Assembly, at the Assembly complex, Alausa, Ikeja, on Tuesday, 25 November 2025.

• Roads and transportation improvements

• Waste management upgrades and Drainage expansion to reduce flooding

• Smart city solutions for better connectivity (traffic management, Public service delivery)

• Strengthening MSMEs, circular economy initiatives, empowering start-ups

• Affordable housing schemes

• Advance innovation

• Support Women, Youth, and Persons living with disabilities.

How Did Lagos Perform in 2025?

The Governor revealed: 81 per cent of the 2025 budget had been implemented as at September 30.

- N1.238 trillion was used for capital projects.

- Lagos attracted over N1 trillion in new investments in 2025.

He credited President Bola Tinubu’s national reforms for helping Lagos discover new revenue sources and attracting investors.

What Did the Speaker Say?

The Speaker, Rt. Hon. Mudashiru Obasa described the budget as “comprehensive” and promised a thorough review by the Assembly. He said lawmakers would ensure the budget meets the real needs of Lagosians and supports long-term growth.

Front row L-R: Deputy Speaker, Lagos State House of Assembly, Hon. Mojisola Meranda; Consul General of People’s Republic of China in Lagos, Yan Yuqing; wife of the Speaker, Mrs Falilat Obasa; Rt. Hon. Mudashiru Obasa; Governor Babajide Sanwo-Olu, the First Lady, Dr. Ibijoke Sanwo-Olu; Deputy Governor, Dr. Obafemi Hamzat, members of the House and traditional rulers during the presentation of the Y2026 Budget Estimates to the House, at the Assembly complex, Alausa, Ikeja, on Tuesday.

Ambitious Budget

Lagos wants to spend big in 2026 mainly on infrastructure, social services, health, education, and economic growth. The government believes this will create more jobs, complete major projects, and push Lagos closer to becoming a global economic hub.

The budget is ambitious, but the House of Assembly will still need to examine and approve it before it becomes law.