The World Bank and BudgIT have raised concerns over the spending priorities and budget implementation practices of Nigerian state governments, warning that increased public revenue has not translated into sufficient investment in critical sectors such as education, healthcare and social protection.

According to findings presented by BudgIT, 34 state governments spent a combined ₦8.60 trillion out of their approved budgets of ₦35.22 trillion in the first half of 2026. This represents approximately 24.4 per cent of the total approved budget, leaving ₦26.62 trillion unspent as of the end of June.

The findings were disclosed during the launch of the 11th edition of BudgIT’s State of States Report, themed “From Allocation to Impact: Rethinking State Spending Priorities.”

The report examined how state governments allocate and utilise public resources, particularly following the increase in revenues available to them since 2023.

It also raised questions about whether higher government income is producing meaningful improvements in the living conditions of Nigerians.

Higher Revenue, Slow Budget Implementation

A representative of the World Bank, Gloria Joseph-Raji, described the assessment as timely, noting that state governments had received substantially higher revenues following recent macroeconomic reforms.

She identified exchange-rate unification, the removal of the petrol subsidy and improvements in tax administration among the developments that had contributed to increased government resources.

According to her, additional funds had also become available to states through federal settlements of longstanding obligations and dedicated intervention funds for infrastructure and security.

The increase in revenue was expected to give state governments greater financial capacity to address development challenges and improve public services.

However, the World Bank’s concerns highlight the importance of ensuring that additional revenue is effectively converted into projects, programmes and services that benefit citizens.

The issue is not simply how much money governments receive, but how efficiently they plan, approve and execute their budgets.

₦26.62tn Unspent Raises Accountability Questions

One of the major findings from BudgIT’s report is the significant gap between approved budgets and actual spending during the first six months of 2026.

The 34 states covered in the assessment had combined approved budgets of ₦35.22 trillion but recorded expenditure of only ₦8.60 trillion within the period.

The remaining ₦26.62 trillion represents a substantial portion of the approved spending plans that had not been utilised by the end of June.

Although an unspent budget balance does not automatically mean that funds have been lost or mismanaged, the figures raise questions about the pace of project implementation, procurement processes, financial planning and the ability of state governments to deliver their development priorities.

Slow budget execution can affect the timing of important public projects. It may also delay the delivery of essential services, particularly in communities that depend heavily on government investment in schools, hospitals, roads and social welfare programmes.

The findings therefore place greater attention on the need for state governments to improve budget preparation and implementation.

Transport Infrastructure Takes a Larger Share

The report also highlighted a shift in state spending priorities, with transport infrastructure absorbing an increasing share of expenditure.

Investment in roads and other transport infrastructure is important for economic development. Improved transport networks can support trade, connect communities, reduce travel difficulties and make it easier for businesses to move goods and services.

However, the growing share of spending directed towards transport infrastructure has also raised concerns about the level of attention given to other important sectors.

Education, healthcare and social protection remain essential to long-term development and the improvement of living standards.

When these areas receive insufficient funding or experience delays in budget implementation, the consequences can affect millions of residents.

For instance, inadequate investment in education can limit access to quality learning facilities and teaching resources. Weak healthcare funding can affect the availability of medical services, equipment and essential facilities.

Similarly, social protection programmes are important for supporting vulnerable households and individuals facing economic difficulties.

The challenge for state governments is therefore to balance infrastructure development with investments in human capital and social welfare.

Need to Turn Revenue into Development

The World Bank and BudgIT’s concerns come at a time when state governments have access to increased financial resources following major economic policy changes.

However, the ability to generate or receive more revenue does not automatically guarantee improved development outcomes.

Effective public spending requires clear priorities, realistic budgets, transparent procurement processes and consistent monitoring of projects.

State governments also need to ensure that approved projects are implemented within reasonable timelines and that public funds are directed towards programmes that address the most pressing needs of their populations.

The State of States Report provides an opportunity to assess whether government spending is producing measurable results rather than focusing only on the size of allocations.

It also reinforces the importance of transparency and accountability in public financial management.

Public Spending and Citizens’ Expectations

For residents across the country, the most important measure of government performance is often the quality of services and infrastructure available to them.

Citizens expect increased public revenue to contribute to better roads, properly equipped schools, accessible healthcare facilities and effective social protection programmes.

When approved budgets are implemented slowly, the expected benefits of public spending may be delayed.

The ₦26.62 trillion unspent balance reported by BudgIT therefore highlights the need for state governments to examine the factors affecting their spending performance.

Going forward, stronger budget monitoring, improved project execution and greater transparency will be important in ensuring that available resources deliver meaningful results.

Ultimately, the central message from the World Bank and BudgIT is that increased revenue must be matched by responsible spending and measurable development outcomes.

Nigeria’s states face significant development needs, and the effective use of public resources will remain essential to improving living standards and strengthening economic growth.