Nigeria’s Economic Gains Face Test of Public Service Delivery

The World Bank’s latest development update highlights a critical juncture for the nation. Although external reserves have surpassed $54 billion and the poverty rate has finally stabilized after years of decline, the benefits of this recovery are uneven. Higher oil prices have bolstered national earnings, yet fuel price hikes triggered by regional instability continue to erode the purchasing power of average families, stalling the downward trajectory of headline inflation that had dropped to 15.2% by late 2025.

State governments currently dominate the fiscal landscape, shifting their budget focus heavily toward capital projects. Infrastructure spending now accounts for 61% of total state expenditure, up from 46% just a few years ago. However, this pivot toward concrete and steel has come at a cost to human capital. The share of state budgets allocated to education has contracted from 14.9% to 12.1%, while healthcare spending has stagnated at roughly 7%. Mathew Verghis, World Bank Country Director for Nigeria, noted that while states have improved fiscal transparency, the ultimate success of these reforms hinges on whether the current revenue surge can be channeled into more efficient service delivery. Projections suggest 4.4% average growth through 2028, but sustained progress requires moving beyond infrastructure to ensure that schools, clinics, and social protection programs receive the investment necessary to lift households out of economic precarity.