State of States 2025: Enugu likeliest to survive independent of FAAC allocations
Enugu State has emerged as Nigeria’s most fiscally viable subnational government. According to BudgIT’s 2025 State of States ranking, Enugu State ranks as the state most likely to fund its operating expenses exclusively from internally generated revenue (IGR).
According to the report, Enugu, Lagos, Abia, Anambra, and Kwara are the five states most capable of surviving independently of allocations from the Federation Account Allocation Committee (FAAC). Conversely, Yobe, Benue, Jigawa, Kogi, and Imo were ranked as the least viable states.
The findings are based on Index A, which measures states’ ability to meet recurrent expenditure obligations using only IGR. The research methodology for Index A was the ratio of operating expenses to the state’s IGR. According to BudgIT, states that rank higher on this index exhibit greater financial autonomy and long-term viability.
“States that perform strongly on Index A have comparatively limited dependence on FAAC allocations and thus possess greater viability if they were to theoretically exist as independent entities,” the report stated.
According to the rankings, Enugu State had a score of 0.68, implying that 68 percent of its IGR would have catered to its operating expenses. Lagos State had a score of 0.83, with Abia garnering 1.56, and Anambra generating 1.66. Kwara had a score of 1.73 to wrap up the top five.
2025’s ranking is in contrast to 2024, when Rivers, Lagos, Ogun, Anambra, and Cross River led the rankings. Enugu’s performance marks a notable leap, underscoring improved revenue collection and expenditure management within the state.
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IGR performance: Enugu and Lagos lead, fewer states meet 50% threshold
In terms of IGR performance, the report shows that the number of states generating enough revenue to cover their operating expenses has shrunk.
Unlike in 2024, when Rivers (121.26 percent) and Lagos (118.39 percent) were the only two states that generated more than enough IGR to cover their recurrent expenditure, Rivers was excluded from this year’s analysis. In 2025, this coveted group now includes Lagos (120.87 percent) and Enugu (146.68 percent), with Enugu taking the top spot.
BudgIT noted that, unlike the previous year’s report, where six states generated enough IGR to cover at least 50 percent of their operating expenses, only five states achieved that feat in 2025, namely Abia, Anambra, Kwara, Ogun, and Edo. This means that 28 states still depend significantly on federal transfers and other external inflows to fund their operations.
IGR growth improves, but gaps persist
On Index A1, which measures IGR growth, Enugu again leads the ranking, followed by Bayelsa, Abia, Osun, and Kano. These states recorded the strongest momentum in boosting internally generated revenues during the 2024 fiscal year.
At the bottom, Kebbi and Yobe recorded negative IGR growth, while Ebonyi, Bauchi, and Benue also posted weak performances. This represents a notable improvement from 2023, when seven states recorded negative growth.
“While it may be too early to celebrate, as the uptick could partly reflect increased inflows from federation transfers. It is a much better performance than the previous year,” BudgIT observed.
In 2024, Zamfara, Ekiti, Niger, Katsina, and Plateau had topped the IGR growth chart, indicating that fiscal leadership among Nigerian states remains fluid and highly responsive to political and policy shifts.
The 2025 report indicates that fiscal sustainability among Nigerian states remains uneven but is gradually improving. More states are investing in IGR reforms, but structural weaknesses, such as overdependence on FAAC and high administrative costs, continue to hinder progress.
