Oluwatobi Adu 
ABUJA, Nigeria – Nigeria’s states dramatically increased their spending between 2023 and 2025, but education failed to keep pace, with its share of total state expenditure falling from 14.9 per cent in 2021 to 12.1 per cent in 2025, the World Bank has said.
The finding is contained in the World Bank’s latest Nigeria Development Update, titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities. The report found that aggregate state spending rose by about 92 per cent in real terms between 2023 and 2025, while state revenues increased by approximately 93 per cent during the same period.
Rather than directing the bulk of the additional revenue to social sectors, states increased investment in capital projects, pushing capital expenditure from 46 per cent to 61 per cent of total state spending.
Transport infrastructure recorded the largest increase, while expenditure on housing, agriculture and other economic infrastructure also expanded.
The shift has, however, raised questions about the priority given to human capital as education spending grew more slowly than spending on economic infrastructure.
Health expenditure remained broadly stable at about 7 per cent of total state spending, while social protection gained ground, increasing its share from 1.4 per cent in 2021 to 4.4 per cent in 2025.
World Bank Country Director for Nigeria, Mathew Verghis, said the increase in state revenues presented governments with a significant opportunity to improve essential public services. “The bold macroeconomic reforms have substantially increased fiscal revenues at the state level, providing a unique opportunity to improve infrastructure, education, healthcare, and water services, which are critical to creating more and better jobs. Strengthening spending efficiency, accountability, and service delivery will be essential to ensuring that public resources improve the lives of Nigerians,” Verghis said.
The World Bank said states had also made progress in fiscal transparency and internally generated revenue but stressed that higher revenues alone would not translate into better outcomes without improvements in spending efficiency, accountability and service delivery.
The report projects that Nigeria’s economy will grow by an average of 4.4 per cent between 2026 and 2028, while inflation could fall to about 12 per cent by 2028.
It warned, however, that stronger investment in human capital will remain critical to creating jobs, reducing poverty and improving living standards.
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