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Nigeria’s 36 states have never had so much money to spend, and the World Bank says they are not putting enough of it into classrooms. In its latest Nigeria Development Update, the bank reported that aggregate state revenue rose by about 93 percent in real terms between 2023 and 2025, while education’s share of total state spending fell. The report was made available to the News Agency of Nigeria in Washington, D.C., and it gives one of the clearest pictures yet of what the end of the fuel subsidy and the naira reforms have meant for state treasuries.
The scale of the increase is the first thing that stands out. According to the figures reported by Nairametrics, state revenues grew 93 percent in real terms over the two years, while expenditure rose 92 percent, which means states spent almost everything they gained. The World Bank attributed the surge partly to exchange-rate reforms, the removal of the petrol subsidy, better revenue administration and larger allocations from the Federation Account. That last point matters because many states rely heavily on monthly transfers from the federal pool, and when oil revenues and naira values change, those transfers move with them. The bank also acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue, a sign that some of the gain comes from governments collecting more of their own taxes.
The way states used the extra money tells much of the story. Capital expenditure climbed to 61 percent of state spending, up from 46 percent previously, according to the bank. Transport infrastructure saw the largest increase, followed by substantial spending on housing, agriculture and other economic investments. The World Bank said states used the additional fiscal space to expand economic infrastructure and to strengthen their fiscal positions. Roads, bridges and housing schemes are visible, politically attractive projects, and a shift toward them is not surprising in a country where infrastructure gaps are obvious. The question the bank raises is whether the people-focused sectors kept pace.
On that front, the picture is more nuanced than some headlines suggest. The bank said spending on health, education and social protection also rose substantially, but it grew more slowly than spending on economic infrastructure. That distinction is important. A falling share does not necessarily mean that the amount spent on education declined; it means that education received a smaller slice of a much larger pie. TheStar reported that education’s share of total state expenditure dropped from 14.9 percent in 2021 to 12.1 percent in 2025. With total spending growing rapidly in real terms, the absolute sum going to schools may well have risen, though the reports reviewed do not give the naira or dollar figure, and readers should not assume either direction without that data.
Still, the shrinking share is a legitimate concern. The commonly cited international benchmark, from the Education 2030 framework endorsed by UNESCO members, suggests that governments should devote 15 to 20 percent of public expenditure to education. At 12.1 percent, Nigeria’s states in aggregate sit below the bottom of that range, and the 2021 figure of 14.9 percent was close to it. The bank’s point is that a period of unusually strong revenue was an opportunity to move toward the benchmark, and the data show states moving the other way in relative terms. Much of the day-to-day delivery of primary and secondary education in Nigeria runs through state governments, so what they choose to fund shapes classroom conditions, teacher pay and school construction.
World Bank Country Director for Nigeria Mathew Verghis framed the findings as a chance, not a verdict. He said higher revenues created the opportunity to improve infrastructure, education, healthcare and water services, and he stressed that greater spending efficiency, accountability and better service delivery are essential if the additional resources are to benefit Nigerians. The bank also repeated a theme it has pressed in earlier updates: stronger investment in human capital is needed to turn economic reforms into sustainable employment and better living standards. In plain terms, macroeconomic stabilization does not by itself produce jobs unless workers have the skills to fill them.
There is a limit to what the reports reveal. They do not break out how much of the capital spending went to school buildings, health facilities or other social infrastructure, so it is possible that part of the 61 percent has gone to projects that serve education indirectly. They also do not rank states, and the average hides a wide spread. Some states, such as those with large internally generated revenue, may have increased education budgets sharply, while others with weaker finances may have cut them. The aggregate picture is useful for policy, but it cannot tell a parent in a particular state whether the local school is better funded than before.
The findings also arrive at a politically charged moment. This week, the federal government announced a 30-day petrol discount at NNPC stations, and opposition parties have criticized it as an election-season move after three years of hardship following subsidy removal. The World Bank’s analysis cuts both ways in that argument. It lists subsidy removal among the reasons states are richer, which supporters of the reform can point to, yet it also shows that the extra money has not been spent in ways that prioritize schools, which critics can cite. Households, meanwhile, experienced the same reforms through higher fuel and food prices, so a revenue windfall for governments does not automatically mean relief for citizens.
For citizens and civil society groups, the practical step is to look at their own state’s budget. State governments publish budget documents, and many now release quarterly execution reports under the transparency improvements the bank noted. Comparing the share allocated to education with the 15 to 20 percent benchmark, and checking whether the money released matches the money budgeted, can show whether the national trend applies locally. Parents’ associations, teachers’ unions and local media have often used such figures to press for change, and a World Bank report gives them a fresh reference point.
For state governments, the message is about balance. Roads and housing do create jobs and economic activity, and the bank does not argue against them. What it asks is that the gains also reach classrooms and clinics, since long-term growth depends on a healthy, educated workforce. There is also the question of sustainability. Part of the revenue jump reflects one-off effects from currency adjustment and subsidy removal, and if oil prices, exchange rates or federal allocations change, state finances could tighten again. Building education and health spending into recurring budgets now would protect those services if revenues fall later.
The full update and related country analysis are available on the World Bank website, and Nairametrics has a detailed summary of the numbers in its report on state revenues and capital spending. Readers who follow Nigeria’s economy, public finance and technology stories can find more coverage at BusinessTech Nigeria.
The headline takeaway is simple, and it is not about whether states are richer. They clearly are. The open question is whether the next two years of spending will show up in schools as visibly as it has in roads.
