26 Nigerian States’ Spending Outgrew Revenue
Spending grew faster than revenue in 26 of 34 Nigerian states between 2023 and 2025, the World Bank says, as state budgets shifted toward building. The post 26 Nigerian States’ Spending Outgrew Revenue appeared first on The Rio Times .
In 26 of Nigeria's 34 states, spending outpaced revenue from 2023 to 2025, according to the World Bank's October 2026 report, "Beyond the Federal Purse." Despite this, the combined state spending roughly matched combined revenue during the same period. The World Bank attributes this phenomenon to reforms enacted since 2023, which significantly increased state allocations, including unifying exchange rates, ending the petrol subsidy, and enhancing tax administration.
These reforms boosted gross federation revenues by 69% in real terms, while net distributable revenues increased by 60%. Oil-producing states gained disproportionately due to oil-related income and repayments of old arrears. Consequently, the fiscal gaps between states widened. States allocated the surplus funds primarily to infrastructure projects, with capital spending rising by 151% in real terms, accounting for 61% of state spending in 2025, up from 48% in 2021.
Education and health expenditures declined, while transport spending surged to 26.5% of total state spending. Only Lagos and Enugu managed to cover their operating costs solely through internally generated revenue in 2025, highlighting the reliance of most states on federal transfers.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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