Weak State Finances Threaten Nigeria’s Development Goals, Presidency Warns

The Presidency has warned that Nigeria’s ability to achieve the Sustainable Development Goals (SDGs) will depend largely on whether states and the Federal Capital Territory can strengthen their fiscal systems, arguing that weak revenue generation and institutional capacity at the sub-national level pose a direct threat to the welfare of millions of Nigerians.

The warning was issued at the opening of a High-Level Workshop on Strengthening Fiscal Capacity at the Sub-National Level in Nigeria, held in Abuja under the framework of Nigeria’s Integrated National Financing Framework (INFF).

The workshop was organised in partnership with the United Nations Development Programme and supported financially by the European Union.

Speaking at the event, Senior Special Assistant to the President on Sustainable Development Goals, Princess Adejoke Orelope-Adefulire, said state governments carry primary responsibility for delivering critical services such as healthcare, education, water supply, sanitation, agriculture, infrastructure and local economic development, yet many lack the fiscal capacity required to fulfil those obligations.

“The capacity of states to effectively mobilise, manage, and deploy financial resources directly influences the quality of life of millions of Nigerians,” Orelope-Adefulire said.

She identified mounting expenditure pressures, weak internally generated revenue, widening infrastructure deficits, climate-related vulnerabilities and global economic uncertainties as major challenges confronting state finances.

According to her, overcoming these challenges requires more than incremental policy adjustments.

“Addressing these challenges requires innovative thinking, bold reforms, and stronger collaboration among all key stakeholders,” she said.

Orelope-Adefulire explained that the Integrated National Financing Framework was designed to align public, private, domestic and international financing with Nigeria’s development priorities and SDG targets.

She noted that the framework extends beyond revenue mobilisation to include reforms in public financial management, improved expenditure efficiency, private-sector participation and the adoption of innovative financing mechanisms.

“Strengthening fiscal capacity at the sub-national level is not merely a technical exercise; it is a strategic imperative,” she stated.

She urged state governments to broaden their revenue bases, modernise tax administration systems, improve budget implementation and create business-friendly environments capable of attracting sustainable investments.

The presidential aide reaffirmed her office’s commitment to supporting initiatives that enhance development financing across all levels of government.

She also pledged continued collaboration with development partners to ensure financing reforms translate into measurable improvements in the lives of Nigerians.

The UNDP Resident Representative in Nigeria, Elsie Attafuah, reinforced the Presidency’s position, describing weak fiscal systems at the sub-national level as a development challenge with far-reaching implications.

According to Attafuah, the achievement of the SDGs depends largely on the effectiveness of state and local institutions.

“The SDGs are ultimately delivered in states, provinces, cities, and communities. Schools are built at the sub-national level. Healthcare services are delivered at the sub-national level. Infrastructure investments, local economic development, enterprise support, and job creation increasingly depend on the capacity of sub-national institutions to mobilise resources, manage them effectively, and direct them toward development priorities,” she said.

Attafuah commended ongoing fiscal reforms being driven by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, saying Nigeria’s efforts to strengthen domestic financing systems demonstrate the importance of building resilient institutions capable of supporting long-term economic growth.

She observed that with global fiscal resources becoming increasingly constrained, African countries must strengthen domestic resource mobilisation and institutional capacity.

A major highlight of the workshop was the participation of a delegation from Ethiopia, underscoring growing South-South cooperation among African countries.

Attafuah said greater collaboration and knowledge sharing among African nations could accelerate development across the continent.

“No single country has all the answers. Yet every country has lessons that can help others move further and faster,” she said.

Describing knowledge as one of Africa’s most valuable development assets, she urged participants to focus not only on increasing revenue but also on how stronger fiscal institutions can create jobs, attract investments, empower women and youths and accelerate progress toward the SDGs.

“The future of development financing in Africa will not be shaped by external resources alone. It will increasingly be shaped by the ability of countries and sub-national governments to mobilise domestic resources, strengthen institutions, unlock investment, and learn from one another,” Attafuah added.

The workshop attracted executive chairmen of state internal revenue services from the 36 states and the FCT, members of the INFF Core Working Group, representatives of the European Union delegation to Nigeria and other development partners.

Participants are expected to explore strategies for strengthening revenue mobilisation, enhancing public financial management and improving the fiscal sustainability of sub-national governments as Nigeria seeks to accelerate progress toward its development and economic transformation goals.