This review provides an analysis of thefiscal performance and sustainability of the State of Lagos,performance of the budgeting system and of the publicprocurement system. It is the first in a planned rollingPublic Expenditure Reviews (PERs) for Lagos state. Theanalysis finds that the state's fiscal policy isbroadly sound and that its fiscal program is sustainable inthe medium term, but only if certain conditions prevail. Italso finds that the performance of the budget system hasbeen mixed, and that the public procurement system is besetwith many weaknesses. In spite of weaknesses in the budgetand procurement systems, the review observes that variousreforms are currently underway to addresses the weaknesses.Finally, the report offers a number of recommendations onthe way forward.