Nigeria’s 2026 budget cycle is shaping up to be one of the most ambitious in recent years, as proposed spending by state governments surged to about N36.98 trillion, representing a 45 per cent increase from the N25.58 trillion recorded in 2025. The sharp rise reflects a more expansionary fiscal stance at the sub-national level, with 34 of the 36 State Houses of Assembly already passing their proposed budgets for the year.
Analysts attribute the swelling budgets to improved revenue expectations, driven largely by higher federal allocations and stronger internally generated revenue (IGR) in some states. On paper, the bigger spending plans signal governors’ intentions to fast-track infrastructure development, improve service delivery, and expand social and economic programmes amid population growth and ongoing federal economic reforms.
However, a closer look at the figures reveals widening fiscal disparities across the federation. Twelve states have crossed the N1 trillion budget mark, underscoring the uneven financial capacity of state governments. Lagos State remains Nigeria’s largest sub-national economy, leading with a proposed N4.44 trillion budget for 2026, while Kano State joined the trillion-naira club with N1.48 trillion. Regionally, the South West accounts for the largest share of total state spending, reflecting its stronger economic base and revenue profile.
In contrast, the North East records the lowest share, accounting for just about 12 per cent of total sub-national budgets, despite grappling with severe development challenges such as insecurity, poverty and a high number of internally displaced persons. While economists note that increased state spending could stimulate growth, create jobs and close infrastructure gaps, they also warn that overly optimistic revenue projections, weak revenue mobilisation and rising debt servicing costs could pose risks to fiscal sustainability.
Civil society group Promad Foundation has cautioned that the success of the record-breaking budgets will ultimately depend on their real impact on citizens’ lives, not their headline figures. In a statement signed by its Communications Officer, Joseph Akujuobi, the foundation stressed the need for transparency, accountability and citizen participation, warning that without effective implementation, the expanded budgets could become missed opportunities rather than drivers of development.
source: leadership