Cash-rich states struggle to turn windfall into better services

Nigerian states are struggling to translate a surge in public revenues into better living conditions for residents, even after federal allocations more than doubled in the past three years, according to a new performance assessment that questions whether the country’s fiscal windfall is reaching ordinary citizens.

The 2026 Phillips Consulting State Performance Index (pSPI) found that federal allocations to states climbed 118 percent between 2022 and 2025, driven by reforms that boosted Federation Account receipts.

Yet average citizen satisfaction with public services stood at just 2.90 out of five, with fewer than half of the country’s states scoring above the report’s benchmark of 3.0.

“Spending is a number. Progress is an outcome,” the report said, arguing that the gap between rising government receipts and citizens’ experience reflects the quality of governance rather than the size of state budgets.

The findings come as President Bola Tinubu’s economic reforms, including the removal of petrol subsidies and exchange-rate liberalisation, have lifted revenues shared among the federal, state and local governments.

State governments have also gained greater fiscal and administrative responsibilities following electricity sector reforms, tax changes and a Supreme Court ruling granting financial autonomy to local governments.

Rather than producing another league table of the country’s best-performing states, this year’s report introduces a “Momentum Index”, measuring which administrations are improving fastest based on five indicators, including citizen satisfaction, internally generated revenue relative to federal allocations, debt sustainability, revenue growth and fiscal transparency.

Enugu emerges strongest performer

Enugu emerged as Nigeria’s strongest performer on that measure with a momentum score of 1.15, buoyed by a 381 percent jump in internally generated revenue and collections amounting to more than twice its federal allocation.

Jigawa, Abia, Osun and Kano also ranked among the strongest improvers.

At the other end of the table, Edo posted the weakest momentum score after high debt levels weighed on its performance.

Imo followed as residents gave some of the country’s lowest ratings for public services, while Benue slipped amid weak revenue growth, low fiscal self-reliance and the economic impact of prolonged insecurity.

South-East outperforms the oil-rich South-South

The report also challenges long-held assumptions about the link between natural resource wealth and development.

The South-East recorded the strongest regional momentum, while the oil-producing South-South ranked last, suggesting that improvements in governance matter more than inherited revenue sources.

“Momentum flows to states that govern deliberately, not those that inherit wealth,” the report said.

Citizens rated education affordability, roads and government communication as the strongest aspects of service delivery.

Finding jobs, access to clean water and the conduct of law-enforcement agencies received the poorest scores nationwide, underscoring the pressures households continue to face despite larger public spending.

The index also highlighted wide differences in specific areas of governance. Gombe received the highest ratings for roads and healthcare quality, Abia topped security and public transport, Sokoto led in education affordability and perceptions of public sector honesty, Kano ranked highest for economic opportunity, while Kogi led on access to clean water.

Lagos remains the most fiscally self-reliant state

On fiscal metrics, Lagos remained the country’s most self-reliant state, generating internally generated revenue equivalent to 369 percent of its federal allocation and recording the highest IGR per capita.

Jigawa carried the lowest debt burden per resident, while Enugu recorded the fastest annual revenue growth.

Not all states were assessed. Rivers State and the Federal Capital Territory were excluded from the rankings because they had not published audited 2024 accounts by the report’s cut-off date, while Yobe and Zamfara were not fully ranked owing to insufficient survey responses.

The report said excluding those jurisdictions was necessary to preserve the integrity of the index, which gives greater weight to audited financial data than public perception.