Lagos State, Nigeria’s commercial capital is on the cusp of a big economic shift. Recognising the digital economy, the state government has set a target to generate N250 billion annually through technology and digital infrastructure. This was the focus of the recent EKO Revenue Plus Summit where stakeholders converged to discuss ways to grow the state’s revenue.
The state government plans to achieve this by building its digital infrastructure, creating a tech literate workforce and supporting innovation through policies. The end game is to create a digital economy that attracts investment, creates jobs and grows IGR.
Governor Babajide Sanwo-Olu said we must embrace digital transformation. “We want to position Lagos as a digital innovation hub. By growing our digital economy we create opportunities for our youth and sustainable growth,” he said.
Digital Infrastructure Investment
The anchor of this plan is a massive investment in digital infrastructure worth N500 billion to N2 trillion. This will cover:
Smart City Infrastructure and Services
Building a digital infrastructure for a smart city. This includes deployment of advanced communication networks, IoT devices and smart city applications to manage and service the city.
E-Government Services and Data Monetization
Digitalising government services to improve efficiency and accessibility. This will generate N50 billion annually by offering public data marketplaces, digital notary services and online platforms for document verification and management.
Broadband Penetration
30% broadband penetration by 2025, a key to making digital services available to a large segment of the population. This will drive economic activities and innovation across the state.
Fintech and Digital Payments
Lagos to be fintech hub. The state will leverage its ecosystem to generate N100 billion annually through digital payment solutions, mobile money services and fintech hubs.
Focus Areas and Revenue Projections
The digital economy strategy has several focus areas with big revenue potential. Here are some of the key initiatives and their revenue projections:
Income Tax Baseline Expansion
By capturing more digitally practising professionals and implementing a Resident Global Digital Citizen Tax Management System, Lagos will generate N200 billion.
Fintech Hub
A dedicated fintech hub for digital payments, lending, insurance and other financial services. This will generate N100 billion for the state.
Digital Services Tax (DST)
In collaboration with the Federal Government of Nigeria, Lagos will implement a Digital Services Tax on non-resident companies like Meta, Amazon and Google. This will generate N50 billion.
Software Development Center
Setting up a facility with the purpose of producing software for the key economic areas. This complex will produce an estimated N150 billion a year in software as a service (SaaS) and other digital offerings.
Digital Skills and Education
Digital schools” and certification programs to promote digital literacy and skills development. This program is designed to train thousands of individuals to become apart of the states digital work force and expand the economy.
Other Revenue Targets for the Digital Economy Sector
Supporting the Informal Sector
Lagos plans to formalize its informal sector, which employs around 5.5 million people, by digitizing the records of artisans, market traders, and commercial bus operators. It will provide micro pensions, medical insurance, and opportunity for loans. And then there is the micro-credit and micro-insurance plans with projected revenue of N200 billion with 3 million subscribers and an average transaction of N50 per person 4 times a year.
The LASRRA card will be imbeded with a microchip and will serve as a universal social security number and payment gateway widening the tax base and providing social benefits for informal laborers.
Leveraging Blockchain and Tokenization
The Lagos State Government is exploring blockchain technology, and tokenization as a new revenue source. Which would involve real estate, infrastructure, intellectual property, natural resources, all tokenized, and the projected revenue from licensing and permits and transaction fees, would be N100 billion per annum.
Collaboration and Technical Partnerships
Strong support from the technical partners such as Huawei, Google, Microsoft, Amazon, and the local tech companies is a must for this plan to be possible. Financial institutions, venture capitalist firms, government agencies such as Federal Inland Revenue Service, National Information Technology Development Agency, to ensure regulatory compilance and the effective implementation of digital policies.
The Sanwo-Olu administration is dedicated towards leaving a legacy of innovation and prosperity. Lagos is leading the way and will be the standard for all other states in Nigeria and maybe even some countries, simply because it is one of the first to jump on the digital bandwagon. It it works, it will be a good use of technology to boost the economy and development.