Nigeria’s 36 states recorded a 93 per cent increase in revenue between 2023 and 2025, but allocated a smaller proportion of their expenditure to education, according to the World Bank.
The bank disclosed this in its latest Nigeria Development Update, which examined how increased government revenue has influenced spending priorities across the country.
The report, made available to the News Agency of Nigeria by the World Bank in Washington, DC, showed that states’ aggregate revenue grew by approximately 93 per cent in real terms during the period, while total expenditure rose by 92 per cent.
It attributed the revenue growth partly to foreign exchange reforms, the removal of petrol subsidies, improved revenue administration and increased allocations from the Federation Account.
The bank also identified refunds, the settlement of outstanding federal obligations, intervention funds and improved Value Added Tax collections as factors that contributed to the increase in states’ revenue.
Despite the improved fiscal position, the report revealed that education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025.
Health spending remained relatively stable at about seven per cent of total expenditure, while the share allocated to social protection increased from 1.4 per cent to 4.4 per cent over the period.
The report also highlighted a shift towards capital projects, noting that capital expenditure accounted for 61 per cent of total state spending, compared with 46 per cent previously.
Transport infrastructure recorded the largest increase in capital investment, alongside substantial spending on housing, agriculture and other economic activities.
Commenting on the findings, the World Bank Country Director for Nigeria, Mathew Verghis, said the additional revenue provided an opportunity for states to improve infrastructure and expand access to essential public services.
“Increased revenues provide an opportunity to improve infrastructure, education, healthcare and water services,” the report quoted Verghis as saying.
He stressed the need for more efficient public spending, greater accountability and improved service delivery to ensure that the additional resources translated into tangible benefits for citizens.
The bank acknowledged progress in states’ fiscal reporting, transparency and internally generated revenue but emphasised the importance of prioritising investments in human capital.
According to the report, sustained investment in education, healthcare and other essential services would be critical to translating economic reforms into sustainable employment opportunities and better living standards.
It projected that Nigeria’s economy would grow by an average of 4.4 per cent between 2026 and 2028, provided ongoing reforms were sustained and service delivery improved.
The World Bank urged federal and state governments to ensure that rising public revenues resulted in measurable improvements in citizens’ welfare, particularly through better access to education, healthcare and other essential services.
