By Ayobami Ayorinde and Seyi Akinbodewa | Almost all the states in Nigeria have published their four quarterly budget implementation reports for the year 2025. This is commendable and needed, especially in a country where many citizens and civic groups clamour for fiscal transparency and accountability. The Federal Government, on the other hand, has lagged behind in meeting the same standard. The most recent quarterly budget implementation report released by the Federal Government covers Q2 2025. Yet, the Fiscal Responsibility Act (2007) requires all governments to publish a summary report of budget execution within 30 days of the end of each quarter. 

The State Fiscal Transparency, Accountability and Sustainability (SFTAS) programme (2018-2022), a performance-for-results programme initiated by the Federal Government but implemented by the World Bank, contributed to improving fiscal openness at the subnational level. Although the SFTAS programme ended four years ago, the continued release of quarterly budget implementation reports shows that the initiative has been largely sustained across states. This regular disclosure opens room for accountability and allows for residents and citizens to ask crucial and informed questions about how states generate and spend their revenues. 

The budget implementation reports of states for 2025 provide comprehensive information on the fiscal performance of 35 states in the course of the year. The report excludes Rivers State because the state did not publish any BIR for the year, possibly on account of the state of emergency in the state for six months in 2025. In this analysis, we examine revenue generation and expenditure patterns and assess their performance relative to final budget estimates.

Expenditure and Revenue of States

In 2025, 35 out of 36 states recorded a combined expenditure of ₦19.21 trillion. This is a 37% increase from the ₦14.05 trillion recorded in 2024. On the other hand, their total revenue amounted to ₦16.64 trillion in 2025, a 24% increase from ₦13.39 trillion in 2024, as seen in Fig 1. As a result, the budget deficit as a percentage of revenue increased from 4.9% in 2024 to 15.4% in 2025. This shows that even when revenue increased, the deficit also increased because states’ expenditure outpaced their income. 

As shown in Fig 2 below, Lagos generated the highest revenue in 2025 at ₦2.63 trillion, followed by Delta (₦1.45 trillion) and Akwa Ibom (₦1.11 trillion). At the lower end in terms of revenue were: Zamfara (₦204.9 billion), Kebbi (₦191.2 billion) and Nasarawa (₦188.6 billion). Notably, Lagos (₦2.84 trillion), Akwa Ibom (₦1.33 trillion), and Delta (₦1.15 trillion) also recorded the highest expenditure in 2025, as seen in Fig 3 below. On the other hand, Zamfara (₦254.4 billion), Kebbi (₦239.8 billion), and Taraba (₦195.5 billion) had the least spending for the year.

States' Budget Expenditure Performance

In 2025, 35 out of the 36 states combined achieved a budget implementation rate of 68.2%, just 1.8% lower than the rate achieved by all 36 states in 2024, as seen in Fig 4. Of the ₦19.21 trillion spent, a total of ₦11.87 trillion (62%) went to capital projects while ₦7.34 trillion (38%) went to recurrent costs as seen in Fig 5 below. When compared with the 58% and 42% that went to capital and recurrent expenditure, respectively in 2024, it shows that states are directing a larger share of their expenditure toward capital projects. This pattern is also reflected in the 2026 budget proposals, where 33 states allocated more than 50% of their budgets to capital spending.

For the 35 states reviewed, recurrent expenditure achieved an implementation rate of 79%, while capital expenditure was 62.9%, as shown in Fig 6. Anambra (80%), Enugu (79%), Abia (79%), Imo (78%), Akwa Ibom (77%) and Bayelsa (77%) recorded the highest capital spending in percentage terms while Plateau (67%), Kogi (66%), Osun (62%), Ekiti (62%), Taraba (61%) and Ondo (60%) led in recurrent expenditure as seen in Fig 7 below.

Out of the 34 states, six implemented less than half of their final budgets. The affected states are: Taraba (34%), Kebbi (41.3%), Abia (45.5%), Niger (47.1%), Plateau (47.5%) and Cross River (48.9%). However, the states that surpassed 80% implementation rate are Yobe (99.8%), Delta (97.2%), Ekiti (87.9%), Bauchi (85.6%), Lagos (84.3%), Osun (82.2%), Bayelsa (82%) and Akwa Ibom (80.6%) as seen in Fig 8 and 9. 

Taraba (20.1%), Plateau (26.2%), Kebbi (34.6%), Kwara (37.7%), Cross River (38.2%), Niger (39.4%), Adamawa (39.8%), Abia (46%), Ebonyi (46.3%), Ogun (47%) and Ondo (49.3%) implemented less than half of their capital budgets. Meanwhile, Yobe (106.4%), Delta (99.9%), Lagos (85.6%), Akwa Ibom (83.9%), and Bayelsa (82.4%) each recorded over 80% in capital budget implementation as shown in Fig 10 and 11 below.

On the other hand, 18 states recorded recurrent expenditure implementation rates above 80%, while Abia was the only state that failed to reach 50% as seen in Fig 12 and 13.

States’ Budget Revenue Performance  

In 2025, 35 out of the 36 states combined achieved 88.4% of their total projected revenue as seen in Fig 14, unlike 2024 where 36 states combined recorded a 5% revenue increase above budgeted figures due to higher FAAC allocations. The shortfall in 2025 can be attributed to some states setting overly ambitious revenue projections for the year, possibly based on the 2024 outturn. Out of the ₦16.64 trillion in actual revenue in 2025, ₦12.40 trillion (75%) was from FAAC, while ₦4.24 trillion (25%) was through IGR, as shown in Fig 15.

The reviewed states received 91.6% of their total projected FAAC revenue in 2025, as seen in Fig 16 below, while their combined IGR fell short by 21% compared to projections.

Lagos (₦2.6 trillion), Delta (₦1.5 trillion), Akwa Ibom (₦1.1 trillion), Bayelsa (₦976.9 billion), Enugu (₦665.9 billion) Edo (₦511.2 billion), Kano (₦486.8 billion), Oyo (₦467.9 billion), Ogun (₦436.5 billion) and Anambra (₦390.3 billion) are the states with the highest revenue in 2025 as shown in Fig 17. The zonal distribution of the Top 10 states in terms of revenue is as follows: South South (four), South West (three), South East (two) and North West (one). Nine of these states are from the South, while only Kano is from the North. On the flip side, Nasarawa (₦188.6 billion), Kebbi (₦191.2 billion), Zamfara (₦204.9 billion), Ebonyi (₦234.9 billion), Adamawa (₦235.5 billion), Taraba (₦249.3 billion), Yobe (₦262.2 billion), Gombe (₦264.9 billion), Ekiti (₦275.6 billion) and Plateau (₦289 billion) are the states with the lowest revenue generated as shown in Fig 18. Among the 10 states at the lower end, eight are from the North, while two (Ebonyi and Ekiti) are from the South. 

IGR accounted for over half of total revenue in Lagos (70%), Enugu (61%) and Ogun (54%), while states like Bayelsa (5%), Yobe (6%), and Sokoto (7%) recorded less than 10% of their revenue from IGR, as seen in Fig 19 below.

Lagos recorded by far the highest IGR in 2025 at ₦1.85 trillion, more than the other top nine states combined. On the flip side, Yobe (₦15.4 billion), Taraba (₦17.9 billion) and Kebbi (₦18.4 billion) recorded the least, as shown in Fig 20 and 21 below.

Delta (₦1.24 trillion), Akwa Ibom (₦1.02 trillion) and Bayelsa (₦924.7 billion) received the highest revenue from FAAC, while Nasarawa (₦149.2 billion), Kebbi (₦172.8 billion) and Zamfara (₦174.8 billion) got the lowest, as seen in Fig 22 and 23 below

In 2025, Delta (133.3%), Ondo (119.9%), Plateau (119.1%), Imo (112.9%), Ekiti (112%), Anambra (102.8%) and Yobe (102%) recorded revenues (FAAC and IGR) exceeding their budget projections, while 27 states fell short of their targets as seen in Fig 24 and 25 below

Out of the 35 states, Plateau (135.6%), Delta (131.1%), Lagos (125%), Ondo (122%), Abia (117.6%), Imo (116.8%), Ekiti (113.1%), Enugu (112.5%), Sokoto (109%), Jigawa (108.5%), Anambra (105.1%), Osun (102.5%) and Yobe (101.7%) received more FAAC revenue than budgeted, while 22 states recorded lower-than-projected FAAC allocations as seen in Fig 26 and 27 below. 

Eight states – Delta (148.4%), Borno (118.9%), Gombe (111%), Ondo (107.8%), Ekiti (107.7%), Yobe (105.9%), Kogi (104.4%) and Kwara (103.5%) generated more IGR than projected in their budgets, while 26 fell short of their IGR targets as shown in Fig 28 and 29 below.

Conclusion and Recommendations

The figures from the report show that states’ revenue and expenditure grew in 2025 compared to 2024 by 24% and 37% respectively. The average budget implementation rate of 68% also shows that about a third of planned spending did not happen. Recurrent spending implementation across the states however, is high, with 18 states recording implementation rates above 80%. This is evidenced by the fact that only 11 states implemented less than half of their capital budgets. The stronger performance of recurrent spending relative to capital expenditure means that states still always have to pay salaries and fund operational costs as at when due. While capital projects are essential for long-term development, recurrent expenditure, which covers operational costs and workers’ salaries, particularly in critical sectors such as education and health, is equally important. If states are able to significantly expand their revenue bases in the coming years, they will have more fiscal space to invest more in capital projects. This is very relevant given that about 90% of states budgeted more for capital expenditure than for recurrent spending in their 2026 budgets. This is where realistic forecasting comes into play. States need to strengthen the basis of their budget projections to ensure that revenue and expenditure estimates are achievable. Without credible assumptions behind projections, states may continue to fall short of their budget targets. 

With states becoming more consistent in disclosing their fiscal data, this should encourage citizens, Civil Society Organisations (CSOs) and the media to ask questions and demand accountability on how money is spent and what it is spent on at the sub-national level. Beyond the size of spending, the quality of spending is equally important. High budget implementation rates are commendable, but ensuring that funds are used efficiently and deliver meaningful outcomes should remain a priority. Therefore, strengthening revenue generation and improving fiscal discipline will be essential to ensuring that public spending translates into tangible socio-economic benefits for citizens.

By Adebayo Ahmed | On the 28^th of February 2026, the war between USA/Israel and Iran broke out, with immediate devastating consequences for people living in Iran and the rest of the Middle East. But the crisis is also having rippling effects across the world, including in Nigeria. The reasons are copious. First, Iran is a significant producer of crude oil and natural gas.

Twenty-five Nigerians have been selected to participate in the second cohort of the Agora Policy Writing Fellowship, which is organised with the support of the MacArthur Foundation and designed to strengthen policy writing skills and deepen data-driven policy engagement in Nigeria.

By Samuel Ajayi | On 7^th December 2025, news broke of an attempted coup in neighbouring Republic of Benin, which President Patrice Talon later announced had been foiled. Some of the online reactions to the attempted coup highlighted a disturbing rise in sympathy for military regimes across West Africa. Though Nigeria has been a democracy since 1999, the wider Sahel is seeing a "coup contagion," fuelled by the unfounded belief that democratic governments cannot guarantee security or economic stability.^{[1] [2] [3]}

By Ayobami Ayorinde, Maryam Ibrahim and Seyi Akinbodewa  | Internally Generated Revenue (IGR) remains a critical indicator of the fiscal sustainability and economic independence for subnational governments. It shows how well each state can raise funds on its own beyond what it receives from the federation pool and how that capacity continues to change over time.

By Cynthia Rowe | Policy dialogues like this are more than just events. They’re spaces where ideas meet action, and where reform begins—not in documents, but in dialogue. They remind us that active citizenship is not a luxury, but a necessity for national development.

By Remi Aiyede  | For fifty years, Nigeria has wrestled with local government reforms. Some ideas held promise, others fizzled, and many never got past the drawing board. But a year ago, a glimmer of hope arrived: the Supreme Court ruled in favour of financial autonomy for Local Government Areas (LGAs). It’s a landmark decision—at least on paper. The big question now is, has anything actually change? Or have powerful state governors, long accustomed to pulling the strings, simply found new ways to keep their grip?

To understand where we are, we need to look back.

Local governance in Nigeria didn’t emerge from democratic ideals. It was born under colonial rule, where British administrators relied on traditional rulers to manage communities. After independence, regions tried elected councils, but the results were uneven. The North clung to its traditional structures, while the South began experimenting with local democracy.

Now picture Nigeria in 1976—a country just emerging from the trauma of civil war, under the firm grip of military rule, and struggling with a chaotic patchwork of local administrations. Governance at the grassroots was a mess—fragmented, inconsistent, and largely ineffective. Then came a bold intervention: the 1976 Local Government Reform, the first serious attempt to bring order to the system and create a standardised model of local governance across the country.

This reform was groundbreaking. For the first time, Nigeria clearly defined its governance architecture as a three-tier system: Federal, State, and Local governments. Local councils were no longer informal appendages; they were recognised as part of the national framework. And to empower them—at least symbolically—they were allocated 5% of federation revenue. It wasn’t much, but it signaled a move toward financial inclusion and grassroots development.

However, this ambitious reform came at a cost. In the drive for uniformity, Nigeria’s local landscape was redrawn, often with a ruler and red pen rather than with community insight. Villages were merged into awkward clusters, while some cities were arbitrarily split into multiple LGAs. The result was a patchwork of artificial boundaries—many of which lacked historical, cultural, or even logistical logic. Nearly five decades later, some of these LGAs still wrestle with fractured identities and administrative dysfunction.

Worse still, the reform imposed a one-size-fits-all model. Rural and urban areas—despite having radically different needs and realities—were treated exactly the same. A quiet fishing village and a teeming urban center were expected to operate under identical rules. It was a recipe for long-term inefficiency.

Then came 1979. Nigeria returned to democratic rule, and with it, the new constitution formally recognised LGAs as the third tier of government. Section 7 was clear: local councils were to be democratically elected and enjoy constitutional backing. On paper, it was a big win for grassroots democracy.

But in practice? Not so much.

State governments held on to real power. They dictated how LGAs were structured—how many wards, what boundaries, and who got what. And although LGAs were entitled to federation allocations, the money still passed through the state governments first. That 5% often got lost in bureaucratic bottlenecks—or political games.

So, while the constitution promised autonomy, LGAs remained tethered to state governments. They were still political tools, not truly independent institutions. The Dasuki Committee was set up in 1984 to address the shortcomings of the 1976 reforms, and it focused on autonomy, direct allocation and minimum criteria like population size.

By 1987, Nigeria was once again reimagining grassroots governance. The Political Bureau Report introduced an ambitious, three-tiered model designed to reflect the complexity of local life. At the foundation were village and neighborhood committees, intended to give everyday citizens a voice in their communities. Above them sat development areas, coordinating services across clusters of communities. At the top were the elected LGAs, tasked with making policy and driving development. It was a bold attempt to bring governance closer to the people. But it never got off the ground.

Then came the 1988 Civil Service Reform, led by the Phillips Committee, which set out to professionalise local administration. Recruitment, promotion, and discipline of local government staff were moved to state-level Local Government Service Commissions (LGSCs). A clearer divide was drawn between elected leaders (chairmen and councillors) and career civil servants, aiming to protect the system from political interference.

But military governments kept undermining progress. One minute, elected councils were dissolved and replaced by sole administrators; the next, the number of LGAs ballooned, with 282 new LGAs created under Babangida alone. This constant political flip-flopping eroded the very democratic norms these reforms aimed to build. Rather than stability, grassroots governance became a revolving door of inconsistency, making it difficult for local institutions to earn trust, deliver services, or evolve beyond political patronage.

Still, those ideas didn’t die. They lingered—passed down from one reform attempt to the next. And they’ve shaped the ongoing battle for local government autonomy, right up to the landmark Supreme Court ruling in 2024.

The struggle has always been the same: not just to create local governments, but to make them truly govern.

In 1999, democracy returned, and the new constitution recognised local governments as the third tier of government. But there was a catch. State governors were given control over LGA finances. That’s where things started to unravel. Instead of serving citizens, many LGAs became piggy banks for state politicians. Governors installed loyalists, dissolved elected councils, and diverted funds—often with no consequences.

Fast forward to 2024. The Supreme Court has said, "No more." Local governments must receive funds directly. Governors can no longer sack elected councils. It sounds like progress. But in reality, some states—like Anambra—are already sidestepping the ruling with new laws that force LGAs to hand back the money.

After 50 years, we’re still asking: why can’t local government in Nigeria work? There are three roadblocks holding us back.

One, state governments are acting like overbearing parents. Picture this: a child receives an allowance, but the parent takes it and says, "I know what’s best." That’s how states treat LGAs. Governors dominate. Caretaker committees are appointed instead of elected councils. Dissenting LGA chairmen are punished. Autonomy is promised but rarely delivered. State electoral commissions (SIECs) are used to rig local elections; during 2024 and 2025 elections following the Suptemre Court’s pronoucement, ruling parties win 100% of the seats in many states.

The second roadblock is what can be called money without management. Even when LGAs get funds, things don’t always improve. Under President Olusegun Obasanjo, some chairmen used allocations to buy luxury SUVs instead of fixing schools or clinics. Today, many councils still owe months of unpaid teachers’ salaries despite receiving federation allocations. Financial mismanagement isn’t rare—it’s routine.

The third is that of democracy in name only. At the grassroots, elections are more performance than process. SIECs, under the thumb of governors, produce predictable results. Local officials serve those who appointed them, not the people. Voters are cut out of the loop, and the democratic spirit is crushed before it takes root.

What has the past taught us? Half a century of reforms has revealed a few hard truths. These include the following: Laws don’t enforce themselves—autonomy means nothing without real mechanisms to uphold it; Money doesn’t guarantee results—without skilled and accountable leadership, funds vanish into thin air; Citizens must get involved—change won’t come from above, it must be demanded from below.

How do we fix this? There are three areas of work. The first is that we must break the governors’ stranglehold on LGAs. We need to strengthen SIECs and make them independent, capable and effective. Then government must comply with the Supreme Court ruling. Prevent states that try to outsmart it by negotiation and dialogue. No more creative accounting or legal loopholes.

The second is to make LGAs work like they are supposed to. We need to invest in training council staff in budgeting, planning, and execution. Governance is a skill. Then it is important to make LGA budgets public and accessible. If your chairman buys an SUV instead of fixing your primary school, you should know—and be able to act.

The third area of intervention is to rebuild grassroots democracy. Local elections must be fair and open. No more 100% "wins" for ruling parties. It is also necessary to revisit ideas like the 1987 Political Bureau’s tiered representation system—where governance begins at the neighbourhoods, to village level and rises upward to the local government.

On the whole, what Nigeria truly needs isn’t just stronger local governments—it needs more responsive local governance. Governance that’s accountable to citizens, not to state governors or party godfathers or to the federal government. Governance that begins with community voices, not Abuja directives.

The Supreme Court ruling is a milestone, but it’s only a start. Real reform will only happen when Nigerians demand it—not just in courts, but in town halls, on social media, and at the ballot box. Because democracy—real democracy—isn’t something you watch. It’s something you do.

*Prof Aiyede is a professor of political science at the University of Ibadan. This is an adaptation of his presentation at the public conversation on local governance reforms in Nigeria, organised by Agora Policy and partners on 22 July 2025.

By Ayobami Ayorinde | On 17th April 2025, Agora Policy hosted the inaugural session of the Agora Policy Forum, which attracted the crème of the academia, civil society and diplomatic corps in Abuja and was headlined by Ambassador Yusuf Maitama Tuggar, Nigeria’s Minister of Foreign Affairs.

By Yusuf Tuggar | The international order is undergoing significant transformation. Geopolitical tensions, economic realignments, tariffs and trade wars, security threats, climate change, and technological disruptions are reshaping the global landscape in ways that demand strategic recalibration from all nations. Traditional assumptions about democracy and markets are being questioned by state and non-state actors. As Africa’s most populous country and a key economic and diplomatic actor,