The World Bank says Nigeria’s 36 states recorded a 93 per cent increase in revenues between 2023 and 2025, but education’s share of the sector’s expenditure declined.
The bank disclosed this in its latest Nigeria Development Update, which examined how increased public revenues have influenced spending priorities across the federation.
According to the report, states’ aggregate revenues rose by approximately 93 per cent in real terms, while expenditure increased by 92 per cent during the period. The report attributed the improvement partly to exchange-rate reforms, petrol subsidy removal, stronger revenue administration and increased allocations from the federation account.
It said states also benefited from refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.
However, education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, according to the report.
Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share increased from 1.4 per cent to 4.4 per cent.
The bank said capital expenditure rose significantly, accounting for 61 per cent of state spending, up from 46 per cent previously.
Transport infrastructure recorded the largest increase, along with substantial spending on housing, agriculture, and other economic investments.
Mathew Verghis, the World Bank country director for Nigeria, said higher revenues created the opportunity to improve infrastructure, education, healthcare, and water services. He noted that greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians.
The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue. It restated, however, that stronger investment in human capital was necessary to translate economic reforms into sustainable employment and improved living standards.
The report also projected average economic growth of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery. It urged federal and state authorities to ensure that increased public revenues translated into tangible improvements in Nigerians’ welfare.