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From Adanna Nnamani, Abuja
The World Bank has urged state governments to channel increased revenues into education, healthcare and other essential public services to improve the living standards of Nigerians.
The bank said the 36 states of the federation recorded a 93 per cent increase in aggregate revenues in real terms between 2023 and 2025, providing an opportunity to strengthen investment in human capital and improve service delivery.
The global lender made the call in its latest Nigeria Development Update (NDU), which examined how public revenues have influenced spending priorities across the federation.
According to the report, state expenditure also increased by 92 per cent during the period, reflecting the substantial growth in resources available to state governments.
The World Bank attributed the revenue improvement partly to exchange-rate reforms, the removal of petrol subsidy, stronger revenue administration and increased allocations from the federation account.
It said states also benefited from refunds, the settlement of longstanding federal obligations, intervention funds and stronger value-added tax collections.
However, the bank expressed concern over the declining share of state expenditure allocated to education, which fell from 14.9 per cent in 2021 to 12.1 per cent in 2025, despite the increase in available revenues.
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Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share of total state spending rose from 1.4 per cent to 4.4 per cent.
The report also showed that capital expenditure increased significantly, accounting for 61 per cent of state spending, compared with 46 per cent previously.
Transport infrastructure recorded the largest increase in capital spending, alongside substantial investments in housing, agriculture and other economic activities.
Commenting on the findings, World Bank Country Director for Nigeria, Mathew Verghis, said increased revenues offered states an opportunity to improve infrastructure, education, healthcare and water services.
He stressed the need for greater spending efficiency, accountability and improved service delivery to ensure that additional public resources translated into tangible benefits for citizens.
The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue, but maintained that stronger investment in human capital remained necessary to translate economic reforms into sustainable employment and improved living standards.
It also projected that Nigeria’s economy would grow by an average of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery.
