The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, has urged state governors to adopt responsible borrowing practices that focus on building infrastructure rather than funding recurrent expenditure.
Speaking during the launch of the 10th edition of the BudgIT State of States Report in Abuja, Oyedele expressed concern over the rising debt levels among Nigerian states, noting that some now owe more than ₦100,000 per capita.
“Borrowing is not bad in itself. The real question is: what are we borrowing for? States should borrow less for recurrent expenses and more for infrastructure that drives productivity,” he said.
Oyedele commended Abia, Enugu, Lagos, Ebonyi, Anambra, and Taraba States for allocating over 70 percent of their budgets to capital projects. He said such commitment to infrastructure and economic development is a step in the right direction.
The tax reform chairman also disclosed that new tax laws taking effect next year will reallocate one-third of the Federation’s revenue to states, further empowering subnational governments to deliver on development goals.
Clarifying the revenue distribution structure, Oyedele explained that states collectively receive about 85 percent of national resources, while the Federal Government gets only 15 percent. He emphasized that the real issue lies in how well states utilize their allocations to improve citizens’ welfare.
He further urged governors to harmonize tax systems, digitize revenue collection, and invest in the informal economy, rather than overburdening small businesses and vulnerable citizens with multiple taxes and levies.
“We must stop taxing investment and shift focus to spending on education, healthcare, and infrastructure,” he added.
The 2025 BudgIT State of States Report, themed “A Decade of Subnational Fiscal Analysis: Growth, Decline and Middling Performance,” ranked Anambra, Lagos, Kwara, Abia, and Edo as the top five performing states. The report also showed that Ebonyi and Taraba maintained strong performances by dedicating the majority of their budgets to capital expenditure.
Oyedele concluded by calling on all states to make better use of the current revenue windfall and turn it into sustainable economic growth.
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