Nigeria’s fiscal outlook continues to evolve as new data from the National Bureau of Statistics (NBS) reveals that the thirty-six states and the Federal Capital Territory generated a total of ₦3.63 trillion as Internally Generated Revenue (IGR) in 2024, reflecting a remarkable 49.70 percent growth rate from the ₦2.43 trillion recorded in 2023. This performance highlights not only improved tax collection systems but also the growing awareness among state governments of the need for stronger financial independence and diversified revenue bases amid persistent economic challenges.
According to the NBS, Lagos, Rivers, and the FCT emerged as the highest-performing entities, recording ₦1.26 trillion, ₦317.30 billion, and ₦282.36 billion respectively over the reference period. These three subnational economies continue to serve as the country’s fiscal powerhouses, collectively contributing a significant share of the total revenue generated across the federation. Their performance underscores the ongoing concentration of industrial, commercial, and administrative activities within these regions.
Conversely, Yobe, Ebonyi, and Kebbi reported the least revenues, generating ₦11.08 billion, ₦13.18 billion, and ₦16.97 billion respectively. The disparity between the top-performing and lowest-earning states further reflects the deep structural and developmental imbalances that continue to shape Nigeria’s fiscal landscape.
The NBS report identifies two broad categories of revenue sources: Tax Revenue and Ministries, Departments, and Agencies’ (MDAs) Revenue. Tax revenue remains the dominant contributor to state income, comprising a wide range of collections such as Pay As You Earn (PAYE), direct assessment, road taxes, stamp duties, capital gains tax, withholding taxes, other miscellaneous taxes, and Local Government Area revenues.
PAYE accounted for the largest share of state-level taxation during the period, contributing approximately ₦1.86 trillion, which represents 69.84 percent of the total tax revenue collected. In contrast, capital gains tax contributed the least, amounting to ₦10.57 billion. Overall, the ratio of total taxes to total IGR stood at 73.35 percent nationally, indicating the continued dominance of tax-based revenue sources in the fiscal composition of Nigerian states.
While these numbers signal substantial progress in subnational revenue mobilization, they also reveal critical vulnerabilities. The heavy reliance on PAYE, for instance, reflects the limited reach of tax collection into the informal economy and exposes states to risks associated with fluctuations in formal employment and wage growth. States that fail to expand beyond traditional tax sources may find it increasingly difficult to sustain their revenue base in the face of macroeconomic uncertainties.
The steady rise in IGR is not just a reflection of improved figures it speaks to the maturing fiscal consciousness of subnational governments and their willingness to adopt innovative collection mechanisms. However, sustaining this growth trajectory will require a strategic balance between efficient tax systems, inclusive economic policies, and transparency in public financial management. The disparities in state performance also suggest an urgent need for knowledge sharing, inter-state collaboration, and targeted fiscal reforms that empower weaker states to strengthen their internally generated income.
The challenge going forward is not merely to raise more revenue but to ensure that every naira collected translates into tangible impact through better infrastructure, accessible public services, and enhanced citizen welfare. As Lagos, Rivers, and the FCT continue to lead the charge, their success stories can serve as models for other states seeking to reform their fiscal structures and achieve greater economic resilience.
