Nigeria's States Gain Significant Fiscal Capacity After 2023 Reforms

President Bola Ahmed Tinubu's 2023 economic reforms, including the removal of the petrol subsidy, exchange‑rate adjustments and measures to boost public revenue, have markedly increased the fiscal capacity of Nigeria's state governments. The reforms raised the volume of resources flowing into the Federation Account, enabling higher allocations to states that previously struggled to meet payroll, pensions, infrastructure and service delivery needs. With greater budgetary space, many states can now fund capital projects, improve education and health services, expand rural infrastructure and strengthen social programmes, although outcomes vary depending on local governance.

The increased state funding is intended to replicate the federal government's reform agenda at sub‑national levels, offering governors the means to address long‑standing fiscal shortfalls and promote sustainable development across the country.