World Bank Raises Concerns as Nigerian States’ Revenues Surge to ₦15.53 Trillion

The World Bank has expressed concerns over how Nigerian state governments are spending their growing revenues, warning that increased financial allocations have not translated into sufficient improvements in education, healthcare and social welfare.

The concerns were raised during the launch of BudgIT’s 2026 State of States Report in Abuja, where policymakers and economic analysts examined the financial performance of state governments.

According to the report, aggregate revenues across 34 states included in BudgIT’s comparative analysis increased from ₦4.99 trillion in 2022 to ₦15.53 trillion in 2025.

Despite this substantial growth, questions remain about whether citizens are receiving corresponding improvements in essential public services.

Rising Revenues, Uneven Development

World Bank Senior Economist Gloria Joseph-Raji explained that economic reforms, including fuel subsidy removal, exchange-rate adjustments and improvements in tax administration, had increased the financial resources available to state governments.

However, spending on transportation infrastructure has expanded considerably faster than investment in healthcare, education and social protection.

This imbalance has raised concerns about the sustainability of development in states where access to quality public services remains limited.

BudgIT also reported that the states covered by its fiscal analysis had spent approximately ₦8.60 trillion by June 2026, representing just 24.4% of their combined approved budgets of ₦35.22 trillion.

Why This Matters for Businesses

Government spending priorities have a direct impact on the business environment.

Investments in education help develop skilled workers, while better healthcare systems support workforce productivity and reduce economic vulnerability.

Transport infrastructure is equally important for lowering logistics costs, but balanced investment is necessary to achieve sustainable growth.

Businesses may struggle to expand when infrastructure improves without corresponding progress in human capital development.

The Bigger Picture

The latest findings highlight a critical challenge facing Nigeria’s public finances: revenue growth alone does not guarantee economic progress.

For state governments, the priority should be ensuring that increased resources translate into measurable improvements in public services, economic opportunities and living standards.

Stronger budget execution, transparent spending and investments that deliver long-term economic value will be essential to achieving meaningful development.