Doing Business in Lagos, Nigeria: A Strategic Legal Guide for Investors Entering Africa’s Fastest-Growing Market

Lagos State is widely regarded as the commercial capital of Nigeria and one of the most dynamic business environments in Africa. For international investors, growth-equity funds, and private equity firms looking to do business in Lagos, Lagos offers a compelling combination of a large consumer base, deep entrepreneurial activity, and sustained public investment in infrastructure.

With a population exceeding 18 million people, Lagos State is a megacity that generates roughly 20% of Nigeria’s GDP, making it one of the most important sub-national economies on the continent. In November 2025, the Lagos State Government announced a proposed budget of ₦4.237 trillion, the largest by any sub-national government in Nigeria, signalling a bold, infrastructure-led development agenda.

Over the past decade, the Lagos State Government has strengthened its regulatory institutions, expanded infrastructure through public-private partnerships (PPPs), and improved predictability in the business environment. Combined with strong consumer demand and strategic proximity to the Atlantic, Lagos State stands out as one of the most attractive sub-sovereign jurisdictions for foreign capital deployment. Lagos State is a major fintech capital in Africa.

For investors exploring investing in Lagos, or broader Nigeria market-entry strategies, understanding how government institutions function and how engagements are structured is critical.

1. How Foreign Investors Engage the Lagos State Government

Foreign and domestic private-sector engagement with Lagos State generally occurs through three primary channels, each with distinct regulatory frameworks and execution pathways.

1.1 Public Procurement in Lagos State

Public procurement in Lagos State is primarily governed by the Lagos State Public Procurement Law and administered by the Public Procurement Agency. This framework covers supply contracts, construction works, digital platforms, consulting services, and operational outsourcing. Minimum contractor qualification requirements include:

1. Contractor registration

2. Submission of tax-compliance documentation

3. Adherence to formal tender procedures

4. Demonstration of technical competence and financial capacity

Foreign investors in Lagos State can often gain a competitive advantage by partnering with qualified local entities, as this may sometimes improve eligibility, execution capacity, and administrative navigation.

1.2 Public-Private Partnerships (PPPs) in Lagos State

PPPs in Lagos State are overseen by the Office of Public–Private Partnerships (OPPP), which manages project origination, feasibility, negotiation, and state-level approvals. Lagos has successfully deployed internationally recognised PPP models such as Build–Operate–Transfer (BOT) and various concession structures in a number of infrastructure sectors and maintains one of the most active PPP pipelines in sub-Saharan Africa across:

1. Transport

2. Housing

3. Healthcare

4. Waste management

5. Digital infrastructure

6. Clean energy

For infrastructure operators, promoters, developers, and long-term capital providers, Lagos remains a highly attractive jurisdiction for public private partnerships.

1.3 State-Owned Enterprises and Special Purpose Vehicles (SPVs) in Lagos State

Lagos frequently executes infrastructure projects through corporatised SPVs, providing greater commercial flexibility. These entities often require:

1. Technical operators

2. Technology providers

3. Capital partners

The legal structure for such state-owned entities and SPVs typically take the form of shareholders’ agreements, technical services agreements, operations and management contracts, and performance-based revenue-sharing frameworks.

2. Institutional Structure: How Lagos State Makes Decisions

Understanding Lagos State’s institutional architecture is essential for structuring projects, obtaining approvals, and managing long-term engagements. The State’s decision-making framework comprises the Executive, the Legislature, and the Judiciary constitutionally established branches that play distinct but interconnected roles in shaping commercial outcomes.

2.1 The Executive in Lagos State

The Executive is the central engine of policy formulation, project execution, and procurement. It is headed by the Governor and supported by the Deputy Governor, the Executive Council, ministries, agencies, departments, and SPVs. Most commercial activity including procurement, concessions, and PPPs is initiated or approved within this branch. Key responsibilities of the Executive includes:

1. Initiating infrastructure and social-impact projects

2. Negotiating and approving PPP frameworks

3. Granting concessions and licences

4. Setting budget and investment priorities

5. Approving major procurement and investment decisions through the Executive Council

Successful engagement requires clarity on which ministry “owns” a project, which agency implements it, and where final approval authority lies.

2.2 The Legislature in Lagos State

The Lagos State House of Assembly exercises legislative authority, approves the State’s annual budget, and conducts oversight of ministries and agencies. Legislative consent may be required for long-term concessions, certain SPV structures, or borrowing arrangements. Although foreign investors seldom interface directly with the Legislature, its role in shaping regulatory stability remains critical.

2.3 The Judiciary in Lagos State

The Lagos Judiciary is the most commercially developed sub-national judicial system in Nigeria. The High Court’s Commercial Division and its strong arbitration culture make Lagos a preferred venue for dispute resolution. Several major, well-recognised arbitration and alternative dispute-resolution institutions operate within Lagos State. Amongst others, the Lagos State Judiciary ensures:

1. Contract enforcement

2. Administrative review

3. Judicial remedies for procurement or concession disputes

4. Enforcement of arbitration agreements and awards

It may be useful to note that the Lagos State Judiciary does not have appellate jurisdiction except in relation to decision of its magistrate courts. Thus, the decisions of the Lagos State High Court are subject to review by the Federal Court of Appeal and ultimately the Supreme Court of Nigeria, the nation’s highest federal court.

This appellate architecture is a significant advantage for foreign investors and commercial entities. Federal-level oversight promotes consistency in judicial interpretation, reduces the risk of localised decision-making, and ensures that major commercial matters benefit from review by courts with national jurisdiction and broader institutional safeguards. For investors, this translates into stronger contract enforceability, greater predictability of outcomes, and a dispute-resolution pathway that aligns with international expectations of judicial independence and commercial certainty.

3. Opportunity Areas for Foreign Capital

Lagos State’s strategic priorities align with global capital flows. High-impact opportunity areas include:

3.1 Infrastructure

1. Transport corridors

2. Traffic management systems

3. Port-linked infrastructure

4. Water transport terminals

5. Rail systems

6. Mass transit and BRT expansion

7. Climate and waste-management solutions

8. Port-adjacent industrial projects

3.2 Energy

1. Off-grid renewable solutions

2. Renewable power for schools, hospitals, and government buildings

3. Urban and industrial energy infrastructure

3.3 Housing & Real Estate

1. Affordable-housing PPPs

2. Urban redevelopment zones

3. Urban regeneration projects

4. Water-treatment facilities

3.4 Digital & Technology

1. E-governance platforms

2. Digital identity systems

3. Smart-city technologies

4. Public-safety and surveillance infrastructure

5. Digital infrastructure and enterprise systems

3.5 Healthcare

1. Diagnostic centre PPPs

2. Hospital development and operations

3. Healthcare infrastructure and systems modernisation

These sectors represent the State’s most active pipelines for international investment and PPP collaboration.

4. Key Risks and Practical Considerations

4.1 Regulatory Overlaps

Multiple ministries or agencies may assert jurisdiction over a project. A detailed regulatory-touchpoint map is essential to avoid delays.

4.2 Political and Administrative Transitions

Since 1999, Lagos State has experienced uninterrupted political continuity under the All Progressives Congress (APC) and its predecessor parties. This 26-year period of stability supports predictable contract enforcement and regulatory consistency, an advantage rare among Nigerian states. However, administrative transitions may still result in:

1. Policy recalibration

2. Renegotiation of ongoing projects

3. Slower implementation timelines

4.3 Payment Delays and Cashflow Management

Government counterparties may not always meet payment deadlines. Investors should implement:

1. Milestone-based payment structures

2. Robust performance guarantees

3. Clear dispute-resolution mechanisms

4.4 Contractual Ambiguities

Improperly drafted MOUs, ambiguous letters of intent, and contracts executed with incorrect counterparties are frequent sources of disputes. Investors must ensure:

1. Legally enforceable contracts

2. Well-defined obligations and performance expectations

3. Clear termination and compensation provisions

4.5 Local Business Realities

Operational success requires:

1. Proactive administrative follow-up

2. Strong compliance documentation

3. Engagement strictly through by authorised channels

4. Awareness of multi-layered approval requirements

5. Key Takeaways

Lagos is one of Africa’s most strategically important entry points for U.S. and global investors. Its combination of scale, institutional capability, regulatory reform, and infrastructure ambition makes it a uniquely investable sub-national jurisdiction. However, at the very minimum, doing business in Lagos, successfully would require:

1. A structured and well-timed approach to government engagement

2. Clear understanding of the State’s institutional architecture

3. Rigorous compliance and stakeholder mapping

4. Strong contractual protections

5. Anticipation of political, administrative, and regulatory dynamics

This publication is based on the authors' independent analysis, observations, and experience advising clients on regulatory and compliance matters. It is provided solely for informational purposes. The views expressed herein do not constitute legal advice or an official recommendation, nor do they represent the position of any institution or client. Readers should seek specific professional advice before relying on any part of this publication.