Lagos state service sector leads GDP contribution in 2024, outpaces others

Compared to other key sectors such as agriculture, finance, insurance, and the industrial sector, the service sector contributed the most to the overall economic output of the state.

This is according to a new report by the Lagos State Ministry of Planning and Budget titled “The Lagos Economic Development Update (LEDU) 2025”.

The service sector dominated as the primary contributor to Lagos State’s total real Gross Domestic Product (GDP) in Q2 2024, rising from 90.29% in Q1 2024 to 91.57% in Q2.

“The service sector continues to dominate the economic landscape of Lagos State, contributing the largest share to the state’s GDP in 2024. In the second quarter of 2024, the sector accounted for 91.57 percent of real GDP, a slight increase from 90.29 percent recorded in the first quarter,” the report stated.

Trade, information and communication, transportation, accommodation and food services, and storage contributed to the growth.

“Trade, as a key component of the sector, saw its contribution rise from 51.8 percent in 2024Q1 to 53.1 percent in 2024Q2,” the report stated.

“This was followed by the information and communication subsector, which accounted for 24.81 percent in 2024Q2, up from 22.4 percent in 2024Q1,” the report stated.

The accommodation and food services subsector experienced significant growth, driven by a surge in tourism and increased activity in the hospitality industry. Similarly, the transportation and storage sector expanded, supported by enhanced logistics infrastructure and growing demand for both freight and passenger services.

The financial and insurance sub-sector saw a decline, with its contribution dropping from 10.1% in Q1 2024 to 9.

“However, the financial and insurance sub-sector experienced a decline, with its contribution decreasing from 10.1 percent in the first quarter to 9.26 percent in the second quarter of 2024,” the report stated.

Overall, the service sector saw a significant improvement in its real growth rate, increasing from 1.8% in Q1 to 6.76% in Q2.

The agriculture sector in Lagos State saw slight growth, contributing 0.55% to the state’s GDP in Q2 2024, up from 0.50% in Q1. This remains lower than the 0.62% recorded in the same period last year, but the sector showed a strong recovery, bouncing back from a -0.84% contraction in Q1 to an impressive 16.95% growth in Q2.

The manufacturing sub-sector, a key part of the industrial sector, was hit the hardest due to rising production costs, supply chain disruptions, and a challenging business environment.