Combined revenues of Nigeria's states rose by about 93% in real terms between 2023 and 2025, according to the October edition of the World Bank's economic update on Nigeria, presented on 8 October in Abuja. Spending rose by 92% over the same period, giving regional governments greater room to fund roads, housing, agriculture and public services.

The share of investment in their total spending rose from 46% to 61%. Transport absorbed the largest increase, ahead of housing, agriculture and other economic facilities. In real terms, capital expenditure rose by 151% between 2023 and 2025.

This reorientation was not matched at the same pace in human capital. Spending on education, health and social protection rose, but more slowly than on infrastructure. The share of education fell from 14.9% of spending in 2021 to 12.1% in 2025, while that of health remained close to 7%. Social protection rose from 1.4% to 4.4%.

The World Bank attributes the increase in resources to reform of the foreign exchange market, the removal of the general petrol subsidy, more efficient tax administration and rising VAT receipts. Gross federation revenues grew by 69% in real terms between 2023 and 2025, with the states receiving the largest share of the improvement in transfers.

The institution estimates that Nigeria's economy grew by 4.2% in the first half of 2026, after 3.9% a year earlier. Services and agriculture supported this acceleration. It forecasts average growth of 4.4% between 2026 and 2028, subject to continued reforms and an improvement in the quality of public spending.

The report says the increase in activity has stabilised the poverty rate for the first time since 2019. This stabilisation does not mean poverty has been eliminated. It only marks an end to its recent rise, while high prices continue to weigh on purchasing power and job creation remains insufficient given population growth.

President Bola Tinubu welcomed the report's findings on 11 October and asked governors to use the additional resources more prudently. For its part, the World Bank stresses efficiency, transparency and monitoring of results, as a rise in budgets alone does not guarantee better services.

The external balance improved at the same time, thanks to higher oil prices. The current account surplus reached $12 billion in the first half, or 7.1% of gross domestic product, compared with $8.6 billion a year earlier. The same energy prices, however, slowed disinflation by raising the cost of fuel and certain food products.