Lagos State has emerged as the country’s biggest sub-national spender, with a 2026 budget of N4.44 trillion, as total state budgets across Nigeria rose by 45 per cent.
Proposed spending by state governments climbed to about N36.98 trillion for 2026, up from N25.58 trillion recorded in 2025, reflecting an expansionary fiscal posture at the sub-national level.
The increase follows the passage of proposed 2026 budgets by 34 of Nigeria’s 36 State Houses of Assembly, signalling higher spending plans across the federation.
At the centre of the surge is Lagos State, which maintains its position as Nigeria’s largest sub-national economy with a record N4.44 trillion budget for 2026. The figure places Lagos far ahead of other states in terms of fiscal size and economic capacity.
Kano State also joined the trillion-naira budget category with a proposed N1.48 trillion, but still trails Lagos significantly.
Analysts say the rise in state budgets reflects growing confidence among governments, supported by improved federal allocations and stronger internally generated revenue, particularly in economically vibrant states like Lagos.
Many governors have described the increased spending as necessary to boost infrastructure, improve service delivery, and stimulate local economies amid population growth and federal economic reforms.
By geopolitical zones, the South West, led by Lagos, accounts for the largest share of total sub-national spending, underscoring its stronger economic base and higher internally generated revenue.
However, experts warn that large budgets come with risks. Overly optimistic revenue projections, weak revenue mobilisation, and rising debt servicing costs could put pressure on state finances.
Promad Foundation has also raised concerns about whether the record budgets truly reflect the needs of citizens.
In a statement signed by its Communications Officer, Joseph Akujuobi, the foundation said the real measure of success would be the impact of the budgets on everyday life.
The group stressed that allocations must translate into better roads, functional hospitals, quality schools, improved transport, and real economic opportunities for residents.
Promad also called for greater transparency, citizen participation, and accountability, warning that weak oversight could turn the increased budgets into missed opportunities.
As states move into the implementation phase, observers say Lagos’ large budget will be closely watched as a benchmark for how expanded spending can translate into tangible development outcomes.
