BudgIT ranks Lagos as top spot in 2026 State of States fiscal performance
BudgIT said it has launched the 11th edition of its flagship State of States Report, themed “From Allocation to Impact: Rethinking State Spending Priorities”.
The BudgIT report examines the 2025 fiscal performance of Nigerian states, assessing their revenue mobilisation capacity, expenditure efficiency, fiscal viability, debt sustainability and spending priorities across critical development sectors, including health, education, agriculture and water, sanitation and hygiene (WASH).
Nigeria’s leading civic-tech organisation promoting fiscal transparency, accountability and effective public resource management, said the 11th edition adopts a substantially revised assessment methodology, moving beyond conventional measures of revenue growth and expenditure volumes to place greater emphasis on the quality of public spending and its potential developmental impact.
The revised framework evaluates states across four pillars: Pillar A (Revenue Performance, 40per cent) evaluates states’ Internally Generated Revenue (IGR) as a proportion of total revenue, year-on-year IGR growth, tax revenue as a share of total IGR, and recurrent revenue growth.
Pillar B (Fiscal Viability, 30per cent) examines states; ability to finance operating expenses using IGR and meet recurrent expenditure, debt servicing and loan repayment obligations from total revenue.
Pillar C (Debt Sustainability, 15per cent) assesses foreign debt exposure, outstanding payment arrears and liabilities, debt servicing burden and total debt relative to government receipts.
Finally, Pillar D (Selected Critical Sectors Spending, 15per cent) evaluates capital expenditure on agriculture, health, education, and WASH relative to total receipts, actual spending on these sectors and the implementation performance of their budgeted projects.
Like last year, Rivers State was excluded from our analysis because the state is yet to publish its audited financial statements and budget implementation reports. The latter, following the declaration of a state of emergency in 2025, has made the state’s data inaccessible. Hence, the 2026 State of States edition assessed 35 states.
In the 2026 fiscal performance ranking, Lagos State secured the position of the best-performing state in the federation, ranking first nationally, supported by its diversified revenue base and IGR of N1.71trillion. Kebbi State also emerged as a notable performer, ranking fifth nationally, following a 59.54per cent increase in total revenue to N228billion.
These performances demonstrate different pathways towards improved fiscal sustainability, although the report emphasises that stronger revenue mobilisation does not automatically translate into better public service delivery. Other states recorded mixed fiscal outcomes. Zamfara, ranked 19th, recorded improvements in IGR
and substantial capital expenditure, but declining aggregate revenue and increasing foreign debt exposure weakened its fiscal position. Ondo and Oyo ranked 21st and 22nd, respectively, highlighting the challenges of balancing revenue mobilisation, expenditure commitments and fiscal sustainability.
At the lower end of the ranking, Yobe (25th), Ekiti (26th), Sokoto (27th), Kaduna (29th), Adamawa (30th) and Osun (32nd) recorded varying combinations of weak domestic revenue mobilisation, expenditure pressures and debt-related vulnerabilities. Kaduna’s rising debt burden and Sokoto’s weak performance in revenue mobilisation and critical-sector spending are particularly concerning.
On revenue mobilisation, the 2025 fiscal year recorded significant improvements in IGR across several states, although considerable disparities remain in their revenue-generating capacities. Lagos maintained its dominance, generating N1.71trillion, representing a 35.67per cent increase from N1.26trillion recorded in 2024. Enugu recorded one of the most remarkable performances, with IGR increasing by 125.91per cent, from N180.5billion to N407.76billion, placing it second nationally.
Oyo and Gombe also recorded significant growth of 112.79per cent and 111.28per cent respectively. Abia’ s IGR increased by 64.48per cent, while Akwa Ibom recorded 45.11per cent growth. Kano, the leading IGR-generating state in the North West, raised N102.6bn, representing a 35.78per cent increase.
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