A recent report by the World Bank highlights a significant 93% increase in revenues for Nigeria's 36 states from 2023 to 2025, yet it also reveals a troubling decline in education funding. The findings, detailed in the latest Nigeria Development Update, indicate that while states' aggregate revenues rose substantially, the share allocated to education has decreased markedly.

The report, which was made available to the News Agency of Nigeria, attributes the revenue growth to several factors including exchange-rate reforms, the removal of petrol subsidies, improved revenue administration, and increased allocations from the federation account. Alongside the revenue increase, total expenditure by the states grew by 92% during the same period.

Despite the overall revenue boost, education's share of total state expenditure fell from 14.9% in 2021 to 12.1% in 2025. In contrast, health expenditure remained relatively stable at around 7%, while social protection spending saw a notable rise from 1.4% to 4.4%. The report also highlighted a significant shift in capital expenditure, which now accounts for 61% of state spending, up from 46% previously. This increase is primarily reflected in enhanced investments in transport infrastructure, housing, agriculture, and other economic sectors.

Mathew Verghis, the World Bank Country Director for Nigeria, emphasized that the rise in revenues presents an opportunity for states to enhance infrastructure, education, healthcare, and water services. He stressed the importance of greater spending efficiency and accountability to ensure that the additional public resources effectively benefit the Nigerian populace.

The World Bank acknowledged improvements in fiscal reporting and transparency among the states, as well as a boost in internally generated revenue. However, it underscored the need for stronger investment in human capital to convert economic reforms into sustainable employment opportunities and improved living standards for citizens.

Looking ahead, the report projects an average economic growth rate of 4.4% between 2026 and 2028, contingent on sustained reforms and enhanced service delivery. The World Bank urged both federal and state authorities to ensure that the increase in public revenues translates into tangible improvements in the welfare of Nigerians, particularly in crucial sectors like education and health.