Proposed spending by Nigeria’s state governments has surged to about ₦36.98 trillion in the 2026 budget cycle, representing a 45 per cent increase from ₦25.58 trillion in 2025. The rise follows the passage of 2026 budgets by 34 of the 36 State Houses of Assembly, signalling an expansionary fiscal stance at the sub-national level.
Analysts attribute the sharp increase to improved federal allocations and stronger internally generated revenue in some states, which have boosted confidence among governors. On paper, the larger budgets are aimed at accelerating infrastructure development, improving service delivery, and expanding social and economic programmes to stimulate local economies.
However, the figures reveal wide fiscal disparities across the federation. Twelve states have crossed the ₦1 trillion budget mark, with Lagos State leading at ₦4.44 trillion, followed by Kano State at ₦1.48 trillion. Regionally, the South West accounts for the largest share of total state spending, while the North East records the lowest share, at about 12 per cent.
Despite the potential benefits, economic observers caution that the surge in spending carries risks. Overly optimistic revenue projections, weak revenue mobilisation, and rising debt servicing obligations could strain state finances and threaten fiscal sustainability if not carefully managed.
Amid these concerns, Promad Foundation has urged state governments to focus on impact rather than size. The group stressed that the true measure of the 2026 budgets would be visible improvements in citizens’ lives, calling for transparency, accountability, and strong citizen participation to ensure that increased spending translates into tangible development outcomes.
