The World Bank says revenues of Nigeria’s state governments increased by 93 percent in real terms between 2023 and 2025, following major economic reforms, including the removal of the petrol subsidy.
The bank disclosed this in its October 2026 Nigeria Development Update, titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities, released on Thursday.
According to the report, states’ expenditure also rose by 92 per cent during the period, while the share of spending allocated to capital projects increased from 46 percent to 61 percent. Transport infrastructure recorded the largest increase in spending.
However, the bank noted that spending on education grew more slowly than overall expenditure, with education’s share of total state spending falling from 14.9 percent in 2021 to 12.1 percent in 2025.
It attributed the revenue increase to factors including petrol subsidy removal, foreign exchange reforms, improved revenue collection and higher allocations from the Federation Account.
The World Bank urged state governments to improve spending efficiency, strengthen accountability and invest more in education, healthcare and social protection to ensure that increased revenues translate into better living standards and poverty reduction.
The bank’s Country Director for Nigeria, Mathew Verghis, said effective spending and improved service delivery were essential to ensuring that public resources benefited citizens.
He added that the increased revenues presented an opportunity for states to improve infrastructure, essential services and job creation.
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