Nigeria’s 36 states recorded a 93 per cent increase in revenue between 2023 and 2025, but education accounted for a smaller proportion of their overall expenditure, according to the World Bank.
The findings were contained in the bank’s latest Nigeria Development Update, which assessed how increased government revenues have influenced spending priorities across the country. The report was made available to the News Agency of Nigeria by the World Bank in Washington, D.C.
According to the report, the combined revenues of the states grew by approximately 93 per cent in real terms during the period, while total expenditure increased by 92 per cent.
The World Bank attributed the improved fiscal position partly to exchange-rate reforms, the removal of petrol subsidies, improved revenue administration and increased allocations from the Federation Account.
Other factors included refunds, the settlement of outstanding federal government obligations, intervention funds and stronger collections from Value Added Tax, VAT.
Despite the growth in available resources, the report showed that education received a declining share of state government expenditure. Its share fell from 14.9 per cent in 2021 to 12.1 per cent in 2025, raising questions about the priority given to education amid improving state finances.
Health spending, on the other hand, remained relatively stable at about seven per cent of total expenditure. Social protection recorded an increase, with its share rising from 1.4 per cent to 4.4 per cent over the period.
The report also highlighted a significant shift towards capital expenditure, which accounted for 61 per cent of total state spending, compared with 46 per cent previously.
Transport infrastructure received the largest increase in investment, while housing, agriculture and other economic activities also benefited from higher spending. The trend suggests that state governments directed a greater proportion of their resources towards infrastructure and other development projects.
World Bank Country Director for Nigeria, Mathew Verghis, said the increase in public revenue presented an opportunity for state governments to improve infrastructure and expand access to essential services, including education, healthcare and clean water.
However, he stressed that increased funding alone would not guarantee better outcomes, noting that governments needed to strengthen spending efficiency, accountability and service delivery to ensure that additional resources translated into tangible benefits for citizens.
The bank acknowledged progress in states’ fiscal reporting, transparency and internally generated revenue, which it said had contributed to improvements in public financial management.
It nevertheless emphasised the importance of sustained investment in human capital, warning that economic reforms would need to be supported by better public services and opportunities for citizens to deliver lasting improvements in living standards.
The findings underscore the challenge facing state governments: balancing infrastructure development with adequate funding for education, healthcare and social protection as public revenues increase.
SOURCE: PUNCH
