Its performance can be compared with several African countries, particularly in West Africa. When Lagos’ GDP is measured against nations like Liberia, Sierra Leone, and Togo, it significantly outperforms them and even competes closely with economies such as Ghana and Côte d’Ivoire.

In a similar trend, the Federal Capital Territory (Abuja), though not officially a state, is steadily developing along a similar trajectory to Lagos, gradually becoming a major economic hub.

The final outcome of this growth pattern will become clearer with time. In contrast, many of Nigeria’s 35 other states struggle with weak revenue generation, limited infrastructure, and fragile economic structures that fall short of standard state-level benchmarks.

Many state treasuries are reportedly under pressure, raising concerns among stakeholders and policymakers. A comparison of VAT and IGR figures across the federation further highlights a wide and troubling gap, with Lagos and Abuja far ahead of the rest.

This disparity points to deeper structural issues within the country’s fiscal and constitutional arrangements. Concerned leaders and economic planners are therefore being urged to speak up and address these imbalances before they worsen.

Silence on the matter, critics argue, benefits no one in the long run, not even the better-performing states. More importantly, the widening gap undermines the goal of balanced national development. One major factor often linked to this imbalance is Nigeria’s tax structure, particularly the PAYE system and how revenue is distributed.

Nigeria operates as a federation of states, but its structure differs significantly from most others globally. Many of its foundational frameworks have remained largely unchanged, limiting meaningful development progress.

The constitution clearly distinguishes between a citizen’s state of origin and state of residence, shaping how responsibilities and entitlements are distributed. Alongside this, local governments remain a crucial but often overlooked tier of governance.

Every economically active Nigerian in the formal sector effectively relates to three administrative levels: state of residence, state of origin, and local government of origin. However, allegiance is often strongest to the state of origin.

This raises questions about fairness in the current PAYE system, which prioritises taxation based on state of residence rather than state of origin, despite the latter being a key identity marker in Nigeria’s constitutional structure.

While tax is essential for development at all levels of government, critics argue that the current PAYE framework is flawed. It requires workers to pay taxes where they reside, often treating them as outsiders in those states, while their states of origin receive no direct benefit.

As a result, many citizens contribute economically to one state while their home states and local governments receive little or no corresponding fiscal support.

This imbalance, critics say, has contributed to the development divide between Lagos, Abuja, and other states, while also fueling migration and uneven growth patterns across the country.

A typical example is a Nigerian working in Abuja who pays taxes to the FCT while their state of origin, such as Delta, receives no direct benefit, despite still considering them a stakeholder.

Supporters of reform argue that this structure fails to reflect Nigeria’s unique social and political realities and has remained unchanged for too long.

They advocate for a review of the PAYE system to create a more balanced and equitable tax-sharing model that reflects both residence and origin-based responsibilities.

Such a reform, they argue, could help bridge development gaps and promote more inclusive national growth, ensuring that no part of the country is left behind.