The past year has handed Nigeria’s state and local governments a fiscal windfall unmatched in recent history. The removal of the petrol subsidy, coupled with the floating of the naira, has sharply increased the naira value of monthly allocations from the Federation Account Allocation Committee (FAAC). For many states, receipts have doubled; for oil-producing states, they have swelled even further through derivation payments.
Yet for most citizens, the windfall has not translated into better roads, functioning clinics, reliable water supply, or schools that can prepare children for the modern economy. Instead, the rising tide of federal transfers appears to have lifted only the political class, not the public. This disconnect demands scrutiny, and accountability, at the subnational level.
To be clear, governors and council chairmen face genuine fiscal pressures. The same reforms that have swelled nominal allocations have also triggered inflation, pushing up the cost of cement, diesel, imported medicines, and other essentials for public works. Wage bills and pension liabilities consume large portions of state budgets. Debt service, both domestic and external, eats further into fiscal space.
Read also: Media expert urges South-East Governors to diversify, reduce dependency on taxation
But these pressures cannot fully explain the absence of visible transformation in most states. Lagos has made headway on rail infrastructure and revenue mobilisation. Borno, under extreme security constraints, has rebuilt schools and clinics in war-torn areas. Yet for every such example, there are multiple states where the extra funds have been absorbed by opaque procurement, inflated contracts, and politically connected “consultancies” that deliver little.
The structural argument, that federal dominance over ports, highways, security, and macroeconomic policy constrains state capacity, is valid, but it is not an alibi for inertia. State governments have constitutional responsibility for primary education, basic healthcare, local roads, and rural water supply. These are sectors where impact is visible, measurable, and largely within governors’ discretion. The political will to prioritise them remains scarce.
“Many governors still view federal allocations as political spoils, not as public investment capital. The result is a recurring cycle: rising revenues are followed by rising political patronage, not rising living standards.”
Indeed, the bigger obstacle is not fiscal capacity but political incentives. In too many states, legislatures function as extensions of the governor’s office, approving budgets without rigorous scrutiny. Local government autonomy is a constitutional principle in theory but a hollow practice in reality, as governors retain firm control over disbursements to councils. Without independent oversight or citizen pressure, windfalls will continue to disappear into a fog of “capacity building” retreats and administrative overheads.
This is not simply a matter of corruption; it is a crisis of governance culture. Many governors still view federal allocations as political spoils, not as public investment capital. The result is a recurring cycle: rising revenues are followed by rising political patronage, not rising living standards.
Breaking this cycle requires reforms on three fronts. First, fiscal transparency must be enforced with real consequences. The publication of FAAC receipts should be matched by open access to detailed state and local expenditure data, project by project, contract by contract. Civil society and the media can only hold leaders to account if the numbers are available and verifiable.
Second, state-level revenue generation must be more than tokenistic. The over-reliance on Abuja’s allocations leaves states vulnerable to oil price swings and currency shocks. Lagos, Rivers, and Ogun have demonstrated that internally generated revenue can be mobilised without overburdening citizens if linked to visible service delivery. Other states must follow suit or remain trapped in fiscal dependency.
Third, citizens must reframe their political expectations. Too often, voters focus on federal elections while treating state and local polls as secondary contests. In reality, the quality of a community’s school, health centre, or road is determined not by the president but by the governor and council chairman. A citizen movement to demand results from subnational leaders is not idealism; it is a democratic necessity.
Read also: Can State governors turn VAT gains into tangible results
Nigeria’s fiscal federalism is imperfect, but it does not absolve governors and local officials of their duties. The post-subsidy, post-naira-float environment has altered the arithmetic of state finance. For once, revenue is not the central constraint; political will is.
If this rare fiscal moment is squandered, the indictment will not be written solely in Abuja, it will be carved into the legacy of governors and council chairmen who presided over the largest allocations in decades yet delivered little more than recycled rhetoric.
Unprecedented revenues are not an achievement; they are a test of leadership. If these resources are allowed to vanish into patronage networks and white-elephant projects instead of classrooms, clinics, and clean streets, history will remember not the scale of the windfall, but the scale of the betrayal.
The question will echo for years: when the means to change the future finally arrived, who chose to waste it?
