Anambra State has emerged as Nigeria’s best-performing state in the 2025 Fiscal Performance Ranking, according to the latest State of States Report released by BudgIT, a civic-tech organisation promoting fiscal transparency and accountability.
The report, titled “A Decade of Subnational Fiscal Analysis: Growth, Decline, and Middling Performance,” marks ten years of BudgIT’s assessment of fiscal sustainability and governance across Nigeria’s 36 states.
BudgIT revealed that Anambra rose from second position in 2024 to first place in 2025, securing the top spot as Nigeria’s most fiscally sustainable state.
Lagos, Kwara, Abia, and Edo completed the top five, while Cross River experienced a sharp drop from 5th position in 2024 to 30th in 2025.
Rivers State, a regular top performer, was excluded from this year’s ranking following a state of emergency that hindered the release of its audited financial statements.
BudgIT noted key shifts among states:
- Anambra moved from 2nd to 1st place.
- Lagos retained its 2nd position.
- Kwara climbed from 4th to 3rd.
- Abia entered the top five for the first time, ranking 4th.
- Edo rejoined the top five after several years in the top ten.
Other notable improvements included Akwa Ibom, which jumped 17 places from 27th to 10th, and Zamfara, which rose nine places from 26th to 17th.
At the bottom of the table were Imo, Kogi, Jigawa, Benue, and Yobe.
The 2025 report evaluated 35 states (excluding Rivers) using five fiscal indicators:
- Ability to meet operating expenses using only Internally Generated Revenue (IGR).
- Year-on-year IGR growth rate.
- Capacity to cover total expenses and loans without borrowing.
- Debt sustainability, measured by debt-to-revenue and debt-service ratios.
- Capital expenditure prioritisation over recurrent costs.
BudgIT observed significant changes in states’ revenue patterns.
In 2024, only Rivers (121.26%) and Lagos (118.39%) covered operating expenses with IGR.
Following Rivers’ exclusion, Enugu now leads with an impressive 146.68%, while Lagos remains a strong performer at 120.87%.
Only five states, Anambra, Abia, Kwara, Ogun, and Edo, generated enough IGR to fund at least half of their operating expenses, compared to six in 2024.
Meanwhile, 14 states now require five times their IGR to cover running costs, highlighting worsening fiscal fragility and dependence on federal allocations.
Abia State led the country in capital expenditure, devoting 77.05% of its 2024 budget to capital projects.
Anambra, Enugu, Ebonyi, and Taraba also allocated over 70% of their budgets to capital spending.
In contrast, Bauchi, Ekiti, Delta, Benue, Oyo, and Ogun spent over 60% on personnel and overheads, reflecting inefficiencies in fiscal prioritisation.
Aggregate subnational revenue increased sharply from ₦6.6 trillion in 2022 to ₦14.4 trillion in 2024, representing a 66.28% year-on-year growth, largely driven by a 110.74% surge in FAAC transfers to ₦11.38 trillion.
Lagos alone accounted for 13.42% of total subnational revenue (₦1.93 trillion).
States such as Oyo (785.79%), Delta (708.36%), and Anambra (640.98%) recorded remarkable FAAC growth over the past decade.
Despite these gains, 28 states still rely on federal transfers for more than 55% of their revenue, underscoring continued dependence on FAAC allocations.
Total subnational debt rose modestly from ₦9.89 trillion in 2023 to ₦10.57 trillion in 2024, an increase of 6.8%.
The five most indebted states, Lagos, Kaduna, Edo, Ogun, and Bauchi, accounted for over half (50.32%) of all subnational debt.
Encouragingly, 31 states reduced their domestic debt by at least ₦10 billion, while total foreign debt declined by over $200 million, showing gradual progress in debt management.
The report revealed mixed outcomes in social spending.
States collectively spent ₦1.61 trillion (66.9%) of their ₦2.41 trillion education budget, with Edo, Delta, and Katsina exceeding 100% implementation.
Per capita education spending averaged ₦6,981, with only eight states surpassing ₦10,000.
In health, states spent ₦816.64 billion (61.9%) of their ₦1.32 trillion allocation.
Yobe led the sector with 98.2% execution, followed by Gombe, Ekiti, Lagos, Edo, Delta, and Bauchi.
Average per capita health spending was ₦3,483, indicating persistent service delivery gaps.
Commenting on the findings, Vahyala Kwaga, BudgIT’s Head of Research, said the 10th edition of the State of States report underscores the urgent need for fiscal reform at the subnational level.
“Fiscal sustainability demands that states look inward, strengthening revenue systems, cutting waste, and prioritising infrastructure and human capital investments that deliver long-term value,” he said.
The 2025 report paints a mixed picture: while Anambra, Lagos, and Kwara show strong fiscal discipline and investment focus, most states remain overdependent on federal allocations, with limited progress toward self-sustaining governance.
