BudgIT, Nigeria’s leading civic-tech organisation promoting fiscal transparency and accountability, has launched the 2025 edition of its flagship State of States Report themed “A Decade of Subnational Fiscal Analysis: Growth, Decline and Middling Performance.”
Marking ten years of consistent subnational fiscal assessment, this year’s report evaluates and ranks the fiscal performance of 35 Nigerian states—from most to least sustainable—offering insights into revenue generation, expenditure patterns, debt sustainability, and sectoral investments in education and health.
One notable aspect of this year’s subnational fiscal performance is the change in state rankings. Rivers State, which has consistently featured in the top five over the past five years, is conspicuously absent from the 2025 edition—following the declaration of a state of emergency earlier this year, which made the state’s data inaccessible.
As a result, the 2025 report introduces new entrants to the top five, with Anambra, Lagos, Kwara, Abia, and Edo ranked in descending order. Anambra State rose from second to first position, securing the title of the best-performing state in the federation, while Lagos maintained its second place for the second consecutive year.
Kwara climbed from fourth to third, Edo entered the top five after consistently ranking within the top ten over the last four editions, and Abia, which had never previously featured in the top ten, now ranks fourth. Other notable movements include Akwa Ibom, which surged 17 places from 27th to 10th, and Zamfara, which moved up nine places from 26th to 17th.
At the lower end of the rankings, Imo, Kogi, Jigawa, Benue, and Yobe occupy the bottom positions, with Cross River experiencing the steepest decline, falling from fifth in 2024 to 30th in 2025.
For the 2025 edition, we retained the five key metrics used to rank all 35 states. Index A examines a state’s ability to meet operating expenses (recurrent expenditure) using only its Internally Generated Revenue (IGR). Index A1 assesses the year-on-year growth of each state’s IGR. Index B evaluates a state’s capacity to cover all operating expenses and loan repayment obligations using total revenue — comprising IGR, statutory transfers, and grants—without borrowing.
Index C measures debt sustainability using four major indicators: foreign debt as a percentage of total debt, total debt as a percentage of revenue, debt service as a percentage of revenue, and personnel cost as a percentage of revenue. Finally, Index D assesses the extent to which a state prioritises capital expenditure over recurrent expenditure.
In terms of Internally Generated Revenue (IGR) performance, the 2025 edition presents notable shifts from the 2024 report.
While Rivers (121.26%) and Lagos (118.39%) were the only two states with sufficient IGR to cover their operating expenses in 2024, the absence of Rivers from this year’s analysis has reshaped this dynamic. Lagos remains a returning champion with 120.87%, while Enugu now leads with an impressive 146.68% IGR-to-operating expense ratio.
Furthermore, unlike the previous year, when six states generated enough IGR to cover at least 50% of their operating expenses, only five states achieved this in 2025: Abia, Anambra, Kwara, Ogun, and Edo. Consequently, 28 states still relied heavily on federal transfers and other sources to meet their recurrent expenditures.
For perspective, in 2024, six states needed more than five times their IGR to cover operating costs; in 2025, this number more than doubled to 14, underscoring challenges in IGR growth for several states. Notably, as in the previous year, all states were able to cover their total recurrent expenditures—comprising IGR, federal allocations, aid, and grants—without resorting to borrowing.
Turning to capital expenditure, the 2025 period reflects a marked shift compared to 2024, when only Rivers State allocated more than 70% of its total expenditure to capital outlays. With Rivers’ absence, Abia now tops the ranking, dedicating approximately 77.05% of its total expenditure to capital projects.
Other states following closely include Anambra, Enugu, Ebonyi, and Taraba, each allocating over 70% of its budget to capital expenditure.
Overall, 24 states spent at least half of their total expenditure on capital items, whereas Bauchi, Ekiti, Delta, Benue, Oyo, and Ogun devoted more than 60% of their budgets to personnel and overhead costs, highlighting persisting disparities in expenditure priorities.
Examining the broader revenue performance, total recurrent revenue for the 35 sub-nationals expanded significantly, rising from ₦6.6 trillion in 2022 to ₦8.66 trillion in 2023 and further to ₦14.4 trillion in 2024—a growth of 66.28%, far surpassing the 28.95% increase between 2022 and 2023. Lagos maintained the largest share of total recurrent revenue, though it was slightly reduced to 13.42% (approximately ₦1.93 trillion) from 14.32% in 2023.
Gross FAAC transfers also recorded substantial growth over the decade. States such as Oyo (785.79%), Delta (708.36%), Niger (683.61%), Ekiti (680.22%), Gombe (643.23%), and Anambra (640.98%) experienced more than 600% growth in FAAC between 2015 and 2024, whereas states like Adamawa (230.98%), Imo (225.25%), Ogun (223.87%), Ebonyi (205.31%), Kogi (186.32%), and Kebbi (178.03%) recorded growth below 300% over the same period.
Total Gross FAAC for the 35 states reached ₦11.38 trillion in 2024, representing a 110.74% increase over ₦5.4 trillion in 2023. Despite these gains, reliance on federal allocations remains high: 28 states relied on FAAC for at least 55% of their total revenue, while 21 relied on it for over 70%.
Internally Generated Revenue, however, remains within the control of the states and displays considerable variability.
Over the ten-year period, Lagos averaged ₦541.35 billion, Ogun ₦92.76 billion, Delta ₦74.45 billion, and Kaduna ₦44.82 billion. By contrast, the states with the lowest averages—Adamawa (₦9.92 billion), Gombe (₦9.54 billion), Taraba (₦7.83 billion), Kebbi (₦7.48 billion), and Yobe (₦6.67 billion)—barely matched Kaduna’s average.
In terms of immediate growth between 2023 and 2024, Enugu (381.44%), Bayelsa (173.69%), Abia (129.37%), Osun (98.37%), and Kano (85.90%) led the pack.
Moreover, unlike 2023—when seven states recorded negative IGR growth—only two states experienced declines in 2024, reflecting overall improvement. Nevertheless, the proportion of IGR within total recurrent revenue declined slightly from 25.27% in 2023 to 20.27% in 2024, indicating continued dependence on federal transfers.
Expenditure patterns further illuminate these trends. Total state expenditure rose to ₦15.63 trillion in 2024, a 64.69% increase from ₦9.49 trillion in 2023. Lagos accounted for ₦2.37 trillion (14.95%) of total subnational spending.
Personnel expenditures increased from an average of ₦53.11 billion in 2023 to ₦65.17 billion in 2024, a 23.24% rise, while overhead costs grew 62.66%, from ₦1.5 trillion to ₦2.44 trillion. Capital expenditure exhibited even more significant growth: only one state recorded a decline, while the remaining states collectively spent ₦7.63 trillion in 2024—an 87.93% increase over ₦4.06 trillion in 2023—and surpassed recurrent expenditure by approximately ₦1 trillion.
This shift reflects a stronger focus on subnational infrastructure and development projects, emphasising the critical role of states in federalism.
In social sectors, implementation remains uneven. For education, states budgeted ₦2.41 trillion but spent only ₦1.61 trillion, achieving 66.9% implementation. Nine states—Edo, Delta, Katsina, Rivers, Yobe, Ekiti, Bayelsa, Bauchi, and Osun—exceeded 80% of their budgeted allocations, with Edo, Delta, and Katsina surpassing 100%.
Average per capita spending remained low at ₦6,981, with no state exceeding ₦20,000 per capita and only eight states above ₦10,000. In health, states budgeted ₦1.32 trillion but expended ₦816.64 billion, achieving 61.9% implementation.
Seven states—Yobe, Gombe, Ekiti, Lagos, Edo, Delta, and Bauchi—spent over 80% of their health budgets, with Yobe leading at 98.2%, though total expenditures remained modest. Average per capita spending was ₦3,483, with only a few states exceeding ₦5,000, highlighting significant gaps in service delivery relative to education.
Unlike revenue performance and operational/capital expenditure, subnational debt management exhibited a distinct trajectory in the 2024 fiscal year. Total debt increased modestly from ₦9.89 trillion in 2023 to ₦10.57 trillion in 2024, representing a 6.8% increase.
This rate of increase was substantially slower than the 36.41% rise observed between 2022 and 2023, when total debt moved from ₦7.25 trillion to ₦9.89 trillion. Notably, the combined debt of the five highest-debtor states in 2024—Lagos, Kaduna, Edo, Ogun, and Bauchi—amounted to approximately ₦5.32 trillion, marginally surpassing the cumulative debt of the remaining 25 states (₦5.25 trillion). Consequently, the top five accounted for 50.32% of total subnational debt, compared to 40.9% in 2023.
A closer examination of domestic debt reveals encouraging progress. Between 2022 and 2023, only 15 states reduced their domestic debt, with 12 achieving reductions exceeding ₦1 billion. In contrast, 2024 saw 31 states decrease their domestic debt by at least ₦10 billion, with Lagos, Cross River, and Delta each reducing debt by over ₦100 billion.
Collectively, this led to a cumulative decline in domestic debt exceeding ₦2 trillion, signalling meaningful efforts to manage subnational liabilities. Similarly, foreign debt reductions were notable: while total foreign debt fell by $74 million between 2022 and 2023, the 2023–2024 period witnessed a decline of over $200 million.
Lagos, Enugu, and Gombe recorded the largest reductions, at $74.56 million, $33.39 million, and $21.88 million, respectively. Nonetheless, Lagos remained the most indebted state in foreign currency, with $1.17 billion, accounting for more than 25% of total subnational foreign debt, followed by Kaduna ($625.10 million), Edo ($383.05 million), Cross River ($202.46 million), and Ogun ($192.90 million).
In terms of foreign debt composition, Kaduna, Jigawa, Ondo, Ebonyi, Katsina, Anambra, Edo, and Kebbi each had foreign debt constituting over 80% of total debt. Overall, 24 states had foreign debt that accounted for more than half of their total debt in 2024.
Average debt per capita increased slightly from ₦40,469 in 2023 to ₦41,766 in 2024, with 12 states—including Lagos, Edo, Kaduna, Cross River, Ogun, Ekiti, Bayelsa, Bauchi, Abia, Enugu, Ebonyi, and Adamawa—exceeding this average.
Notably, Lagos and Edo surpassed ₦100,000 per capita in debt obligations. Additional subnational liabilities continued to present challenges, totalling ₦1.24 trillion in 2024, up from ₦1.19 trillion in 2023. These included contractor arrears (₦434.87 billion), pension and gratuity obligations (₦626.81 billion), salary and staff claims (₦33.74 billion), judgement debts and litigation (₦62.33 billion), and other miscellaneous liabilities (₦73.25 billion).
Looking at the decade, the average IGR over the 2015–2024 period remained highest in Lagos (₦541.35 billion), followed by Ogun (₦92.86 billion), Delta (₦74.46 billion), Kaduna (₦44.83 billion), and Enugu (₦40.28 billion). To contextualise, the combined average IGR of Lagos and Ogun (₦643.21 billion) approximates the total average IGR of the remaining 33 states.
Borno and Ogun achieved the highest IGR growth rates at 862.61% and 463.47%, respectively, while 10 states—including Borno, Ogun, Nasarawa, Ekiti, Enugu, Zamfara, Bayelsa, Bauchi, Osun, and Niger—exceeded 500% growth.
Overall, 30 states achieved at least 200% growth between 2015 and 2024, with Enugu, Bayelsa, and Abia leading year-on-year growth (2023–2024) above 100%.
Meanwhile, 15 states—including Osun, Kano, Delta, Jigawa, and Akwa Ibom—recorded growth above 50% over the same period, whereas Yobe and Kebbi recorded negative growth. Analysis of average year-on-year IGR growth rates over the past 11 years highlights exemplary performance by Zamfara (43.56%), Jigawa (41.70%), Ogun (34.31%), Ekiti (33.67%), Borno (32.77%), and Bauchi (30.68%), indicating sustained annual growth of at least 30%.
Fourteen states achieved average annual growth of 20%, while all but one recorded year-on-year growth exceeding 10%. Although granular data on tax and non-tax revenue components remain limited for earlier fiscal years, from 2021, most states began reporting detailed figures, allowing more precise tracking of revenue drivers. Over the decade, all sub-nationals demonstrated resilience, with no state recording negative average growth between 2014 and 2024.
Commenting, Vahyala Kwaga, BudgIT’s Group Head of Research, underscores the critical lessons drawn from a decade of fiscal analysis. “Over the past decade, the State of States has evolved into Nigeria’s most authoritative subnational fiscal analysis. This 10th edition not only reflects the story of growth and imbalance but also underscores the urgent need for reform. Fiscal sustainability requires that states look inward, improving revenue systems, cutting waste, and prioritising infrastructure and human development investments that deliver long-term value.”
While it has been 10 years since the BudgIT Foundation launched its State of States Fiscal Report, Nigerians’ fortunes have undergone significant change: most of that change has been negative.
The State of States has always meant to serve as more than just a fiscal health evaluation; it aims to provide significant evidence for citizens to hold their governments accountable.
As we clock 10 years with this edition, it is hoped that subsequent editions will bring more of the people’s voices into the public governance framework, as they are meant to be at its centre.
