State revenues surge, driving infrastructure boom and economic growth in Nigeria
Federation revenues grew by 69% in real terms between 2023 and 2025, with state governments as the primary beneficiaries.
In Brief
- •Federation revenues grew by 69% in real terms between 2023 and 2025, with state governments as the primary beneficiaries.
- •State capital expenditure increased by 151% in real terms over the same period, focusing on roads, transportation, agriculture, energy, and housing.
- •Nigeria's economy grew by 4.2% in the first half of 2026, with poverty stabilising for the first time since 2019.
- •Inflation dropped from 27.6% in January 2025 to 15.2% in December 2025, though Middle East tensions have slowed the pace of decline.
- •Nigeria's current account surplus rose to $12 billion in the first half of 2026, up from $8.6 billion a year earlier.
Why It Matters
The significant increase in state revenues and infrastructure spending has the potential to improve living conditions for Nigerians. However, further efforts are needed to translate these fiscal gains into lower living costs and higher standards of living. The economic growth and stabilization of poverty rates indicate a positive trend for Nigeria's economy, but challenges such as food affordability and job creation remain.
Key Details
- Revenue Growth
- 69% in real terms (2023-2025)
- Capital Expenditure Growth
- 151% in real terms (2023-2025)
- Economic Growth (H1 2026)
- 4.2%
- Inflation Rate (Dec 2025)
- 15.2%
- Current Account Surplus (H1 2026)
- $12 billion
Context & Background
The economic reforms introduced by the Nigerian government, including the removal of the petrol subsidy and the unification of the foreign exchange market, have expanded subnational fiscal capacity.
Original Reporting & Sources
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