Since President Bola Tinubu ended the petrol subsidy in May 2023 and the naira was floated, Nigerians have paid a heavy price. Petrol now sells for over N1,400 a litre, and N1,350 at NNPC stations even after last week’s “discount”. Food prices have doubled and doubled again, and the minimum wage is still N70,000.
The same reforms gave every tier of government more money than it has had in years. According to the World Bank, federation revenue rose 69 percent in real terms between 2023 and 2025. The federal government’s share grew by 41 percent and the states’ share by 130 percent. Where did the money go?
Starting today, Pluboard will run a series of reports answering that question. They draw on the World Bank’s Nigeria Development Update, released last week. Its findings are built from the budget implementation reports of 34 states for 2021 to 2025, together with federal accounts and Federation Account Allocation Committee data. It appears to be the most comprehensive record yet of how Nigeria’s governments have raised and spent public money since the subsidy ended.
Over the coming days, we will publish how the federal government spent its share, what happened to the subsidy savings, which states built roads but not schools or clinics, which spent beyond their means or borrowed more despite the windfall, and which states did best, and which did worst. We will name the states and set out the figures.
The federal government spent N0.7 trillion on capital projects in the first half of 2026. Over the same six months, it paid N7.7 trillion in interest on its debts, according to the World Bank.
The figures are in the Bank’s latest Nigeria Development Update, released last week. They show that for every naira the federal government put into roads, hospitals, schools and other projects between January and June, it paid about N11 to its lenders.
Interest alone was more than the government earned. The Bank put federal revenue for the half-year at about N6.2 trillion, up from N3.6 trillion a year earlier, helped by oil receipts and company taxes. The interest bill, up from N5.6 trillion, was N1.5 trillion bigger than that income.
Capital spending fell to 0.3 percent of GDP, from 1 percent in the first half of 2025. Salary costs rose to N4.2 trillion from N3.7 trillion after wage adjustments. Total federal spending was N16.1 trillion.
The cut in project spending made the government’s accounts look better. The federal deficit narrowed to 4 percent of GDP (N9.9 trillion) from 5 percent (N11 trillion) a year earlier. The Bank said this was partly because of “lower reported capital spending”.
“The improved early-year fiscal outturn should be interpreted cautiously given the low reported federal capital spending,” the report said. “Personnel and interest costs continue to absorb a large share of fiscal space.”
The Bank blamed long-running budget problems, including “overlapping budget cycles” and a weak link between approved budgets and what agencies can actually deliver. It said these “often leave capital spending as the main adjustment margin when recurrent obligations rise”. Put simply, when salaries and debt payments fall due, projects are cut.
This did not start this year. Between 2023 and 2025, capital spending fell from 20.9 percent to 15.8 percent of federal spending, the Bank found, “leaving federal spending predominantly recurrent”. States moved the other way, raising capital spending from 47.5 percent to 61 percent of their budgets.
Borrowing costs are a large part of the problem. Across all tiers of government, debt service took about 49.5 percent of revenue in 2025, and interest alone took 27.3 percent. Domestic debt made up 57.9 percent of the debt stock but 72.6 percent of interest payments, which reflects how expensive local borrowing has become.
The figures come as President Bola Tinubu faces growing anger over living costs ahead of the 2027 elections. Last week, the government introduced a discount at NNPC stations that caps petrol at N1,350 a litre. At that price, a worker on the N70,000 minimum wage could buy about 52 litres a month, with nothing left for food, rent or transport.
When Tinubu ended the subsidy in May 2023, he promised that the savings would go into infrastructure, education, healthcare and jobs.
The World Bank expects more pressure on the budget later in the year, from “a pickup in capital execution later in the year, alongside recurrent and pre-election spending”. It projects the combined deficit of all tiers of government to widen to 3.5 percent of GDP in 2026, from 3.1 percent in 2025.
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