The combined budgets of Nigeria’s 36 states and the Federal Capital Territory have increased by 47.5 per cent, rising from N27.22tn in 2025 to N40.14tn in 2026.
Despite the increase, the proportion allocated to capital expenditure has declined. Capital spending now accounts for 64.34 per cent of the combined 2026 budgets, compared with 73.24 per cent in 2025.
States and the FCT allocated N25.83tn to capital projects in 2026, up from N19.94tn the previous year. However, analysts warned that the declining share could affect infrastructure development and long-term economic growth.
The Federal Capital Territory increased its capital allocation to 76.19 per cent, while the South-South and North-West also raised their capital spending shares.
Conversely, the North-Central reduced its capital allocation from 72 per cent to 59.04 per cent, while the South-West recorded a marginal decline.
Economists said states need to maintain stronger investment in roads, power, water and other infrastructure to attract investors and support productivity.
Professor Jonathan Aremu warned that declining capital spending could undermine development as infrastructure demand continues to rise.
The development comes as states face growing personnel costs, debt obligations and pressure to provide public services.
