Nigeria’s states have never had it this good financially. But for millions of Nigerians, the story is markedly different.
As state revenues surged to an unprecedented N15.53 trillion in 2025, more citizens were battling rising food prices, shrinking purchasing power, insecurity and worsening living conditions. The widening gap between government finances and household welfare has become one of the most striking contradictions in Nigeria’s post-subsidy era.
According to BudgIT, revenue accruing to the 36 states jumped from N4.84 trillion in 2022 to N15.53 trillion in 2025—an increase of more than threefold in just three years.
State expenditure also rose sharply, from N6.22 trillion in 2022 to N17.88 trillion in 2025, while capital expenditure reached N10.85 trillion in 2025.
The figures suggest that state governments have gained enormous fiscal space following the removal of the petrol subsidy in May 2023. But the central question confronting Nigerians is increasingly difficult to ignore: where is the dividend of the additional revenue?
For the average citizen, the answer appears far less impressive than the revenue figures suggest.
Despite the surge in public resources, Nigeria continues to grapple with widespread poverty and deprivation. The National Bureau of Statistics has reported that about 63 per cent of Nigerians experience multidimensional poverty, meaning millions lack adequate access to essential necessities such as healthcare, education, clean water and sanitation.
The income-poverty picture is equally troubling, with millions struggling to survive amid high inflation, escalating food and energy costs and weak real wage growth.
The paradox is particularly glaring because state governments are now receiving substantially more resources than they did before the subsidy removal. Yet, for many households, the period has been characterised not by improved prosperity but by declining purchasing power.
BudgIT’s analysis further raises questions about spending priorities. Although states increased expenditure on education and health, both sectors represented a smaller share of total state spending in 2025.
This suggests that increased revenue does not automatically translate into increased priority for the services most directly connected to citizens’ welfare.
Inflation has compounded the problem, with food, transport, electricity and other essential costs rising faster than household incomes. Workers in the informal economy are particularly vulnerable. More than 70 per cent of Nigerians are estimated to work in the informal sector, where earnings are often low, unstable and largely unprotected.
Security challenges have added another layer of hardship. In several farming communities, persistent attacks by bandits and terrorists have forced farmers away from their land, disrupting agricultural production and contributing to food shortages and higher prices.
Thus, while government balance sheets have improved dramatically, household balance sheets remain under severe pressure.
The post-subsidy era has therefore produced a troubling fiscal paradox: states are receiving more money, spending more money and recording higher capital expenditure, yet millions of Nigerians are still struggling to afford food and meet basic needs.
The real test of the revenue windfall is not how much states collect or spend, but whether ordinary Nigerians can actually feel the difference in their daily lives. Until that happens, the spectacular rise in state revenues will remain, for many citizens, little more than impressive numbers on government financial statements.
SOURCE: Independent
