2026: Lagos Leads As States’ Budgets Surge To N37trn

As Nigeria’s 2026 budget cycle advances, proposed spending by state governments has risen sharply, with total sub-national budgets climbing to about N36.98 trillion, representing a 45 per cent increase over the N25.58 trillion recorded in 2025.

The surge follows the passage of proposed 2026 budgets by 34 of the country’s 36 State Houses of Assembly, underscoring an expansionary fiscal posture at the sub-national level.

Analysts say the scale of the budgets reflects growing confidence among state governments, buoyed by improved federal allocations and stronger internally generated revenue in some states.

On paper, the larger budgets signal states’ intention to accelerate infrastructure development, improve service delivery, and expand social and economic programmes.

Many governors have framed the spending increases as necessary to stimulate local economies, close infrastructure gaps and improve the quality of life for citizens amid rising population pressures and economic reforms at the federal level.

A breakdown of the figures, however, shows widening disparities across the federation. Twelve states have now crossed the N1 trillion budget threshold, highlighting the uneven fiscal capacity of sub-national governments.

Lagos State remains Nigeria’s largest sub-national economy, leading the pack with a 2026 budget of N4.44 trillion. Kano State also joined the trillion-naira club with a proposed N1.48 trillion budget.

By geopolitical zones, the South West accounts for the largest share of total sub-national spending, reflecting its relatively stronger economic base and higher internally generated revenue.

In contrast, the North East records the lowest share, accounting for about 12 per cent of total state budgets, despite facing some of the country’s most acute development challenges, including insecurity, poverty and a high number of internally displaced persons.

While the increase in state spending suggests improved revenue expectations, it also comes with economic risks. Large budgets, if effectively deployed, can stimulate growth, create jobs and drive development.

However, economic watchers warn that overly optimistic revenue projections, weak revenue mobilisation strategies and rising debt servicing obligations could strain state finances and undermine fiscal sustainability.

Against this backdrop, Promad Foundation has raised concerns over whether the record-breaking budgets truly align with the priorities of ordinary Nigerians.

In a statement signed by its Communications Officer, Joseph Akujuobi, the foundation said the real test of the 2026 budgets would not be their size but their impact on citizens’ daily lives.

According to the foundation, Nigerians are increasingly demanding value for money in public spending, stressing that trillions of naira allocated on paper must translate into tangible outcomes, such as better roads, functional hospitals, quality schools, affordable transportation and healthcare, and real economic opportunities.

The foundation emphasised the importance of citizen participation, transparency and accountability in the budgeting and implementation process, warning that weak oversight and poor execution could turn the expanded budgets into missed opportunities.

It noted that without clear links between budget allocations and community needs, higher spending may fail to deliver the expected dividends of democracy.

As states move from budget approval to implementation, Promad Foundation said Nigerians would be watching closely, asking whether the allocations genuinely reflect community priorities and whether funds will be deployed efficiently.

Ultimately, it said, success would be judged not by headline figures but by visible and measurable improvements in the lives of citizens across the states.