Rating Release

Agusto & Co. hereby affirms the “Aa-” (long-term) and “A1+” (short-term) ratings assigned to the Lagos State Government, with a stable outlook 

The rating expires on 30 September 2027. 

Agusto & Co. hereby affirms the “Aa-” (long-term) and “A1+” (short-term) ratings assigned to the Lagos State Government (“Lagos State”, “Lagos”, “the State” or “LASG”). The assigned ratings reflect LASG’s strong and sustainable revenue profile, underpinned by its broad internally generated revenue (IGR) base, diversified economy, institutionalised tax administration and relatively low dependence on volatile federal transfers. The ratings are further supported by the State’s strong IGR coverage of non-discretionary expenditure and satisfactory debt-service metrics. We also considered Lagos State’s position as Nigeria’s principal commercial, financial and logistics hub, as well as its sustained access to domestic capital markets and financial institutions, which enhances its funding flexibility and capacity to finance priority projects. However, the ratings are constrained by the State’s rising debt stock, significant exposure to unhedged foreign-currency borrowings and substantial infrastructure and social-service requirements arising from rapid urbanisation. Nonetheless, the debt-related risks are moderated by the predominantly long-term and concessionary terms of LASG’s external loans and its strong cash-generating capacity.

Lagos State, also known as the “Centre of Excellence”, was established on 27 May 1967 and served as Nigeria’s administrative capital until 12 December 1991. Located in Nigeria’s southwest region, the State has a historically estimated geographical area of circa 3,577 square kilometres, although recent aerial data indicate a landmass of approximately 4,050 square kilometres following extensive land reclamation. Despite its limited land area, Lagos had an estimated population of 30.9 million in 2025 and remains Nigeria’s principal commercial, financial and industrial centre. The State’s nominal gross domestic product (GDP) stood at ₦62.5 trillion in 2025, representing approximately 15% of Nigeria’s total output and 30% of non-oil GDP.