By: Odeh Favour
Nigeria’s 36 states recorded a massive 93 per cent increase in aggregate revenues between 2023 and 2025, but the allocation to the education sector experienced a declining share of expenditure during the same period, according to the World Bank.
The multilateral institution disclosed this in its latest Nigeria Development Update, made available to the News Agency of Nigeria in Washington D.C., 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 overall expenditure grew by 92 per cent during the period under review.
The Washington-based lender attributed the revenue surge partly to foreign exchange rate reforms, fuel subsidy removal, improved revenue administration, and increased monthly allocations from the Federation Account.
States also benefitted from federal refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.
However, despite the windfall, education’s share of total state expenditure dropped from 14.9 per cent in 2021 to 12.1 per cent in 2025.
Health sector spending remained broadly stable at approximately seven per cent, while social protection allocations saw an increase from 1.4 per cent to 4.4 per cent.
The report further highlighted that capital expenditure increased significantly, accounting for 61 per cent of total state spending, compared to 46 per cent recorded previously.
Transport infrastructure accounted for the largest share of the increase, alongside substantial funding directed towards housing, agriculture, and other economic investments.
Commenting on the findings, the World Bank Country Director for Nigeria, Mathew Verghis, noted that the increased revenue inflows provided a rare opportunity to improve critical public infrastructure and services.
He stressed that “greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians”.
While acknowledging notable improvements in states’ fiscal reporting, transparency, and internally generated revenue, the bank emphasized that stronger investment in human capital was vital to translating ongoing economic reforms into sustainable jobs and better living standards.
Looking ahead, the World Bank projected an average economic growth rate of 4.4 per cent for Nigeria between 2026 and 2028, provided the country sustains its reform momentum and enhances service delivery.
The global financial body urged federal and state authorities to ensure that higher public earnings translate directly into tangible improvements in the welfare of ordinary citizens.
