World Bank urges Nigeria to prioritize human capital amid revenue surge

The World Bank has advised Nigerian state governments to utilize increased fiscal revenues to improve public services, education, healthcare, and water services. According to the latest Nigeria Development Update, state revenues rose by approximately 93 percent between 2023 and 2025, while gross federation revenues increased by 69 percent in real terms.

World Bank Country Director Mathew Verghis noted that while revenues have surged, spending has focused more heavily on economic infrastructure and fiscal consolidation rather than human capital development. The report highlights that capital expenditure in state spending rose from 46 percent to 61 percent during this period, with transport infrastructure seeing the largest increase.

In response to fiscal challenges, Nigeria’s Minister of Finance Taiwo Oyedele announced structural reforms aimed at streamlining budget implementation. The government intends to move away from overlapping budgets and unrealistic projections, transitioning toward outcome-based estimates. Under this new approach, agencies will be required to justify deviations greater than 10 percent from previous actual performance rather than relying on incremental budgeting.