Anambra State has been named Nigeria’s best-performing state in the 2025 Fiscal Performance Ranking, according to BudgIT’s State of States report released on Tuesday.
The civic tech organization said Lagos, Kwara, Abia, and Edo completed the top five, while Cross River suffered a steep drop, falling from fifth position in 2024 to 30th this year. Rivers State, which had consistently ranked among the top performers, was excluded from the latest report following a state of emergency that prevented the release of its audited accounts.
In its statement, BudgIT described the 2025 edition, titled “A Decade of Subnational Fiscal Analysis: Growth, Decline and Middling Performance,” as a milestone marking 10 years of tracking fiscal sustainability and transparency across Nigeria’s 36 states.
According to the organization, Anambra climbed from second to first place to become the nation’s best-performing state, while Lagos retained its second position for the second consecutive year. Kwara moved from fourth to third, Edo entered the top five for the first time after years in the top 10, and Abia, which had never ranked among the top 10 before, now sits in fourth place.
“With its rich economic potential, Anambra State has experienced a significant increase in its Internally Generated Revenue (IGR), vis-a-vis sustained reliance on federation transfers. In 2024, the state recorded an 18.71% increase in IGR, rising from N36.20bn in 2023 to N42.97bn. However, this revenue still represented a modest 12.21% of the state’s total recurrent revenue. Ranking 16th overall in the country, Anambra holds the position of having the second highest IGR in the South East,” the report said.
Akwa Ibom recorded one of the most significant improvements, rising 17 spots from 27th to 10th. Zamfara also advanced nine places, moving from 26th to 17th. Meanwhile, Imo, Kogi, Jigawa, Benue, and Yobe were ranked as the worst-performing states in the federation.
BudgIT said the report evaluated states using indicators that measure their ability to generate and manage revenue, meet obligations without borrowing, sustain debt levels, and prioritise capital expenditure over recurrent costs.
The report noted that Lagos and Enugu remained fiscal standouts. It said that while Rivers and Lagos were the only two states that generated enough internally generated revenue to cover their operating expenses in 2024, the absence of Rivers this year reshaped the landscape.
Lagos, according to BudgIT, maintained a strong position with an IGR-to-operating-expense ratio of 120.87 percent, while Enugu now leads with an impressive 146.68 percent.
“Lagos reported an Internally Generated Revenue (IGR) of N268.22bn in 2015, marking the beginning of steady yearly growth. As at 2015 the state alone recorded more than 28 states combined IGR. By 2019, Lagos consolidated its position as the least FAAC-dependent state in the federation. Out of its N516.62bn revenue pool, N398.73bn, or 77.18%, was from IGR, while FAAC accounted for just 22.82%,” it stated.
Only five states—Abia, Anambra, Kwara, Ogun, and Edo—generated enough revenue to fund at least half of their operating expenses, down from six last year. Fourteen states now require more than five times their IGR to meet their operating costs, underscoring the growing fiscal imbalance across Nigeria.
In capital expenditure, Abia emerged as the leading state, dedicating 77.05 percent of its total spending to capital projects. Anambra, Enugu, Ebonyi, and Taraba also invested more than 70 percent of their budgets in infrastructure and development. Overall, 24 states devoted at least half of their total budgets to capital projects, while Bauchi, Ekiti, Delta, Benue, Oyo, and Ogun spent more than 60 percent of their expenditures on salaries and overhead costs.
BudgIT reported that the total recurrent revenue for 35 states increased from N6.6 trillion in 2022 to N8.66 trillion in 2023 and then surged to N14.4 trillion in 2024—a 66 percent jump, far exceeding the 29 percent rise recorded between 2022 and 2023. Lagos accounted for 13.4 percent of the total, generating N1.93 trillion in 2024.
The report also showed that gross allocations from the Federation Account grew by 110 percent to reach N11.38 trillion, with states such as Oyo, Delta, and Anambra recording over 600 percent growth between 2015 and 2024. Despite the increase, 28 states still relied on federal allocations for at least 55 percent of their total revenue.
“Ekiti State, like most other subnational governments, witnessed a substantial surge in federation transfers in 2024, recording N287.23bn, a remarkable 202.7% year-on-year increase from N94.88bn in 2023. Between 2016 and 2024, the state received a cumulative N749.32bn from the Federation Account,” the report stated.
BudgIT noted that subnational debt rose slightly from N9.89 trillion in 2023 to N10.57 trillion in 2024, representing a 6.8 percent increase. Lagos, Kaduna, Edo, Ogun, and Bauchi accounted for just over half of the total debt. However, 31 states reduced their domestic debts by at least N10 billion, while foreign debt collectively fell by more than $200 million.
Highlighting a decade of fiscal trends, BudgIT said the report reflects the story of growth, imbalance, and the urgent need for reform. The organisation’s Group Head of Research, Vahyala Kwaga, said achieving fiscal sustainability requires states to improve their internal revenue systems, cut waste, and prioritise investments in infrastructure and human capital that deliver long-term value.
The report also exposed gaps in social sector spending. It showed that only 66.9 percent of the N2.41 trillion budgeted for education was actually spent. Nine states, including Edo, Delta, Katsina, Rivers, Yobe, Ekiti, Bayelsa, Bauchi, and Osun, spent over 80 percent of their education budgets, with Edo, Delta, and Katsina surpassing 100 percent. The average per capita spending on education stood at N6,981, with no state spending more than N20,000 per person and only eight exceeding N10,000.
In the health sector, the 35 states budgeted N1.32 trillion but spent N816.64 billion, achieving 61.9 percent implementation. Seven states—Yobe, Gombe, Ekiti, Lagos, Edo, Delta, and Bauchi—spent more than 80 percent of their allocations, with Yobe leading at 98.2 percent. The report found that average per capita health spending was N3,483, with only a few states exceeding N5,000, highlighting the persistent gap between budgetary promises and service delivery.