Nigeria’s 36 States Budget ₦40tn as Capital Spending Falls

Nigeria’s 36 states have collectively pushed their 2026 budgets to about ₦40 trillion, representing a sharp increase from the previous year.

But beneath the impressive headline figure lies a more uncomfortable question; are larger state budgets producing proportionately larger public investment?

Fresh analysis published Wednesday indicates that state budgets have jumped by about 47 per cent, while the share allocated to capital spending has fallen.

That distinction matters.

A larger budget does not automatically mean better roads, hospitals, schools or water systems.

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Why the increase is happening

State governments now have access to substantially larger revenues than they did during periods when allocations from the federation account were weaker. The removal of the petrol subsidy and changes in the federation revenue environment have significantly altered public finances.

On Tuesday, the Federation Account Allocation Committee shared about ₦3 trillion among the Federal Government, states and local governments from July revenue.

This creates a paradox. Governments have more money available, but citizens still complain about poor infrastructure, weak public services and rising living costs.

The quality of spending therefore becomes more important than the size of the appropriation.

The capital spending question

Capital expenditure is the part of a budget that generally finances infrastructure and other long-term investments. When recurrent expenditure consumes a growing share of government resources, more money can disappear into salaries, administration and routine operations without creating enough new productive assets.

This does not mean recurrent spending is automatically wasteful. Teachers, doctors, civil servants and security personnel must be paid.

The problem begins when recurrent expenditure expands while roads deteriorate, classrooms remain overcrowded and healthcare infrastructure struggles.

The 2026 figures should therefore force state governments to explain not merely how much they plan to spend, but what Nigerians will actually see at the end of the financial year.