NIGERIA’S 36 states and the Federal Capital Territory (FCT) enjoyed 110.74 percent increase in federal transfers in 2024, according to the Central Bank of Nigeria (CBN). The rise in revenue, however, did not improve citizens’ standard of living or states’ infrastructure, according to Economy Post‘s checks.
Federal revenue transfers to states jumped from N5.4 trillion in 2023 to N11.38 trillion on the back of petrol subsidy removal and foreign exchange unification, which led to significant increases in states’ revenues.
“The 2024 fiscal environment was reshaped by the removal of the petrol subsidy and exchange rate unification, leading to unprecedented inflows,” said the CBN’s Deputy Governor, Economic Policy, Mr Muhammad Sani Abdullah, at the launch of BudgIT’s ‘State of States 2025’ report in Abuja on Tuesday.
Dirty environment in Makoko, Lagos Source: Daily Post
Mr Abdullahi urged state governments to maintain fiscal discipline and direct revenues inflows to long-term and people-centered development outcomes, noting that the people must feel the increases in allocations.
READ ALSO: How non-state actors pocket Rivers State’s N55bn transport revenue
“For the first time in years, capital expenditure at the state level overtook recurrent spending, with capex surpassing personnel and overheads by over N1 trillion,” he noted, stressing that 2024 marked a year of unprecedented fiscal flows for most states, as federation transfers more than doubled due to the Nigerian government’s bold policies the year before.
He stressed the need for states to be fiscally responsible, noting that discipline and efficiency were critical to the management of such unprecedented inflows.
“Fiscal discipline, not inflows, will define transformation. The states that will see real progress are not necessarily those with the biggest revenues, but those able to sustain prudent spending and channel funds into pro-poor investments,” Abdullahi said.
Mr Abdullahi noted that for the first time in many years, capital expenditure at the subnational level overtook recurrent spending, stressing that this was a step in the right direction and a historic shift.
He further said that states must begin to digitise internal revenue systems, complete Treasury Single Account (TSA) implementation, and strengthen budget transparency, noting that there had been persistent execution gaps in budget implementation, especially in education and health.
The CBN chief noted a growing exposure to foreign currency-linked debts, revealing that the apex bank was developing an instrument to help states hedge against FX risks and manage external obligations more effectively.
“We must institutionalise performance scorecards that link budgets to service delivery. This is how we move from numbers to impact,” he added.
Director of BudgIT, Mr Oluseun Onigbinde, said: “When we began this work in 2016, it was almost impossible to find credible data at the state level. We wanted to understand not just how transparent states were, but whether they had the fiscal strength to deliver goods and services for their citizens.”
He added, “From a time when only five states published budgets to now when most states publish both budgets and performance reports, the culture of openness has deepened,” noting that transparency had moved from obligation to competition.
Poor standard of living for citizens
Though attention is often directed at the Federal Government, states have escaped scrutiny despite receiving humoungous allocations and transfers from the centre.
Kebbi State Governor, Mr Mohammed Idris, administers a state with a multidimensional poverty rate of 79.1 percent. However, it ignored the realities of the state and offered N30 million cash to Senior Pastor of Dunamis International Gospel Centre, Dr Paul Enenche, who rejected it outrightly, Economy Post had reported.
READ ALSO: Nigeria to spend $2.45bn fixing 12km Lagos bridge – 30x Egypt’s cost for 20.5-km span
Kebbi, Sokoto, and Yobe have the worst out-of-school children in Nigeria. In Kebbi, 67.6 percent of children aged 6–15 are out of school, meaning that nearly 7 out of 10 children in a state governed by Mr Idris do not go to school.
About 63 percent of persons living within Nigeria, which is equivalent to 133 million citizens, are multidimensionally poor, according to the National Bureau of Statistics (NBS). About 65 percent of the poor (86 million people) live in the North, while 35 percent (nearly 47 million) reside in the South. Yet, Nigerian politicians aren’t aware of this. Or they pretend not to.
The World Bank said in its ‘Nigeria Development Update’ released in October 2025 that though growth had picked up and revenues and reserves rising, poverty was skyrocketing in Africa’s most populous nation.
“In 2025 we estimate that 139 million Nigerians live in poverty. So the challenge is clear, how to translate the gains from the stabilisation reforms into better living standards for all,” said World Bank’s Country Director, Mr Mathew Verghis.
Also, infrastructure in several states is still decrepit, with many of them lacking basic housing units and good roads for their population.
