States, LGs enjoy N7.1trn surplus under Tinubu administration — Edun

The Federal Government has said states and local governments have received significantly higher funding under the current administration, leading to a combined surplus of about ₦7.1 trillion.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this known at a press briefing in Abuja on Thursday, noting that the funds included both statutory allocations and refunds for earlier deductions. He explained that the increased inflow was a direct result of proceeds from the removal of fuel subsidies being passed down to Nigerians through the sub-national governments.

“We are increasing resources available to the sub-nationals, to the states, for educational, health and infrastructure,” Edun said. “We are making repayments of past deductions to the federation account, funds which are legitimately owed to the sub-national levels of government. Those payments are being made on a regular basis.”

According to him, since the first half of 2023, the combined fiscal balance of the states has improved from 1.8% of GDP — about ₦2.8 trillion — to 3.1% of GDP, translating into a ₦7.1 trillion surplus. “That means that the states have been provided funding that has now allowed them to be in surplus. And of course, that gives them the greater capacity to invest in, and from an economic classification standpoint, it must be said that the increase in spending of the states has in fact mainly gone to capital expenditure,” he noted.

Edun also disclosed that in the last quarter alone, the Federal Government settled over ₦2 trillion in outstanding capital budget obligations from 2024. He said focus would now shift to 2025 capital releases.

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Reviewing the nation’s fiscal position, the minister reported that the Federal Government achieved 37.4% of its revenue target in the first half of 2025. “Gross revenues are of 37.4% government revenues target in the first half of 2025,” he stressed. Following GDP rebasing, he added, Nigeria’s debt-to-GDP ratio has dropped from 52.1% to 38.8%.

On fiscal discipline, Edun said: “When we look at the fiscal position of government and public finances, under the leadership of the president, bold steps have been taken to restore fiscal discipline and balance. We have ended the unauthorised and above limits funding by Ways and Means, which was a natural default when looking for funds to fund anything.”

He further revealed plans to review the cost of revenue collection deducted by agencies such as the Nigeria Customs Service, Federal Inland Revenue Service (FIRS), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), as well as management fees levied by NNPC Ltd for managing both the Frontier Exploration Fund and its general operations.

“We will look to review deductions from the federation account that come from things like the collections charges of various agencies…,” he said, adding that the government will prioritise spending and explore more ways of generating revenue from existing national assets.

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