State revenues have nearly doubled in real terms since 2023. Education’s slice of state spending has shrunk. The numbers are less simple than the headlines, and more revealing.
First, the 93% rise refers to the combined revenue of all 36 states in real terms between 2023 and 2025, not to any individual governor’s allocation. Second, the education figures compare 2021 (14.9%) with 2025 (12.1%). The decline is in education’s share of spending not a cut in naira terms: the World Bank reports that education spending itself roughly doubled over the period. This article keeps both distinctions in view.
In its October 2026 Nigeria Development Update, titled “Beyond the Federal Purse: How Higher Revenues Reshaped State Priorities,” launched in Abuja on 8 October, the World Bank examined how Nigeria’s states used the windfall created by the Tinubu administration’s reforms. Aggregate state revenues rose by about 93% in real terms between 2023 and 2025, while expenditure rose by 92%.
The Bank credits exchange rate unification, the removal of the petrol subsidy, stronger revenue administration and larger Federation Account allocations. States also benefited from refunds, settlement of longstanding federal obligations, intervention funds and stronger VAT collections. Gross federation revenues rose 69% in real terms over the period, but states’ share rose 130%, against 41% for the federal government and 101% for local governments.
The headline shift is toward concrete. Capital expenditure rose 151% in real terms between 2023-2025.The transport sector especially roads, recorded the largest increase in more than 30 of the 35 states assessed. Spending priorities moved toward economic infrastructure in about 29 of 33 states with comparable data. Housing, agriculture and energy also gained weight.
The Bank’s own summary is careful: spending on education, health and social protection “rose substantially in real terms” it said, but did not keep pace with infrastructure. Mathew Verghis the Bank’s Country Director for Nigeria, framed the windfall as a chance to improve infrastructure, education, healthcare and water services and said strengthening spending efficiency, accountability and service delivery would be essential.
Governors can fairly argue that Nigeria’s infrastructure deficit is severe and that capital spending creates jobs, which the Bank itself links to growth. The Bank also acknowledged progress: better fiscal reporting, transparency and aggregate internally generated revenue (IGR) up 55% in real terms. Enugu is the standout, with IGR rising from N25 billion to N209 billion. We did not find a formal response from the Nigeria Governors’ Forum in the coverage reviewed so their side is represented here by inference from the Bank’s findings rather than by their own statements.
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