Despite a sharp increase in revenues driven by higher federal allocations and tax collections, Nigeria’s State Governments have not matched the growth with commensurate increases in spending on salaries, pensions and civil service overheads, according to BudgIT’s Nigeria Economic Reforms Report.
Aggregate state revenue rose 220.76 percent from N4.840 trillion in 2022 to N15.526 trillion in 2025, reflecting a significant expansion in the fiscal resources available to state governments.
But BusinessDay’s analysis of the report showed a widening gap between the growth in state revenues and personnel expenditure, with spending on workers taking a smaller share of total state expenditure despite the substantial increase in fiscal resources available to states.
Aggregate personnel expenditure increased from N1.55 trillion in 2022 to N2.89 trillion in 2025. However, because total state spending grew much faster, personnel expenditure declined as a share of aggregate expenditure from 24.99% in 2022 to 16.16% in 2025.
“The adjustment of the national minimum wage from N30,000 to N70,000 in 2024 further reshaped personnel spending priorities across the country.
