Nigeria: 26 states unable to cover personnel costs with internal revenue

A report by BudgIT reveals that at least 26 Nigerian states are unable to generate sufficient Internally Generated Revenue (IGR) to cover their personnel costs for 2025. These states remain heavily dependent on allocations from the Federation Account Allocation Committee (FAAC) to meet wage obligations.

Out of 34 states analyzed, only eight—Lagos, Enugu, Ogun, Delta, Kaduna, Kwara, Abia, and Anambra—produced IGR exceeding their personnel expenditures. The remaining 26 states faced a combined shortfall of ₦747bn, with total personnel spending reaching ₦1.91tn against ₦1.16tn in internal revenue. Some states, including Yobe, Taraba, and Sokoto, reported personnel bills up to five times their IGR.

While aggregate FAAC allocations rose by 232% between 2022 and 2025, the share of state revenue derived from these federal transfers also increased from 68.7% to 73.3%. Finance Minister Taiwo Oyedele has called for improved revenue mobilization and stronger fiscal federalism, noting that the current level of dependence on oil and federal transfers is unsustainable.