State governments in Nigeria increased capital expenditure by 151 per cent following a significant rise in federation revenues attributed to economic reforms introduced since 2023, according to the World Bank’s latest Nigeria Development Update.
The report, titled Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities, indicated that federation revenues increased by 69 per cent in real terms between 2023 and 2025, providing states with additional resources to fund infrastructure and other development projects.
The findings have been welcomed by President Bola Tinubu, who said the report demonstrated that his administration’s economic reforms were beginning to yield results.
In a statement issued by his Special Adviser on Information and Strategy, Bayo Onanuga, the President said the findings validated the government’s efforts to strengthen public finances, stabilise the economy and improve living conditions.
According to the report, states channelled increased revenues into capital projects covering roads, transportation, agriculture, energy and housing.
The World Bank also reported that Nigeria’s economy grew by 4.2 per cent in the first half of 2026, compared with 3.9 per cent during the corresponding period of 2025. It projected average economic growth of at least 4.4 per cent between 2026 and 2028.
The report further indicated that the country’s poverty rate had stabilised for the first time since 2019, while inflation declined from 27.6 per cent in January 2025 to 15.2 per cent in December of the same year. However, rising global fuel prices associated with the Middle East conflict had slowed further progress in reducing inflation.
Nigeria’s external position also improved, with the current account surplus reaching $12 billion in the first half of 2026 and gross external reserves rising to $53.8 billion at the end of August.
Tinubu attributed the reported improvements to key policy measures, including the removal of petrol subsidies, unification of the foreign exchange market and stricter fiscal discipline.
The President, however, acknowledged that further efforts were required to ensure that economic gains translated into tangible improvements in Nigerians’ living conditions, particularly through lower food prices and increased employment opportunities for young people.
He reaffirmed his administration’s commitment to expanding targeted cash transfers, accelerating compressed natural gas deployment, improving agricultural productivity and increasing access to affordable healthcare and quality education.
Tinubu also urged state governments to manage their increased revenues prudently and prioritise projects capable of directly improving citizens’ welfare.
He commended the Economic Management Team, led by the Minister of Finance and Coordinating Minister of the Economy, alongside state governors and other stakeholders, for supporting the reform process.
The President said his administration would continue implementing its Renewed Hope Agenda 2.0, with emphasis on inclusive economic growth and shared prosperity.
