Experts have said that for Nigeria to achieve sustainable and inclusive development, states and local governments must play a stronger role in ensuring that national policies and investment plans translate into improved living standards for citizens.
Adetilewa Adebajo, chief executive officer of The CFG Advisory, expressed concern over policy inconsistency, that governors should be more involved in trade missions and investment negotiations because states are critical to facilitating investments and creating the conditions businesses need to operate.
“Companies such as Kimberly-Clark, Procter & Gamble and Guinness had either exited Nigeria or reduced their presence”, he said, noting that the return of JPMorgan Chase presented an opportunity Nigeria needed to sustain through stable policies.
Adebajo cited the Lekki Port project as an example of the importance of coordination between state and federal authorities. He said negotiations with China Harbour Engineering Company took two years before the company eventually built and delivered the port in less than 24 months.
He also recounted how a proposed $20 billion Dangote refinery investment, initially considered for the Olokola Free Trade Zone in Ogun State, was affected by political disagreements between the investor and the state government, resulting in the project being located elsewhere.
“I had worked on the Ogun State government’s transition committee, where we identified the Olokola Free Trade Zone as a key area for development. I later worked with the minister to explore the possibility of Dangote establishing a $20 billion refinery there. However, a political fallout between him and the governor meant Ogun lost the investment to another state”, he said, adding that Nigeria needed to move beyond personalised decision-making and establish policies that endure.
Adebajo said better coordination between federal and state governments was necessary to ensure that investment plans translated into economic activity.
He added that infrastructure around Lekki Port had also helped facilitate the movement of equipment for Dangote’s refinery.
“While the federal government creates trade policies, states are critical because they own the land required for investment”, he said, at the Nigeria-South Africa Forum in Lagos, which focused on the subnational imperative for Nigeria’s sustainable development.
The forum brought together stakeholders who highlighted how subnational governments drive quality of life through infrastructure, education, healthcare, and business permit administration.
Olufemi Awoyemi, chief executive officer of Proshare, said that understanding Nigeria’s fiscal system requires recognizing that the household is the common denominator in the economy, with local governments closest to the people.
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“Taxation will be discussed at that level. The same applies to revenue and any economic indicator, which is why data is required to assess state-level performance and bridge the gap that exists,” he said.
Awoyemi made reference to the Federal Government’s proposed $21.7 billion external borrowing plan, stating the government already had a budget deficit of about N30 trillion and this loan request was a means to accelerate it.
He said the real challenge to worry about is transparency on what specific projects the fund is meant to raise.
“There are several flaws in the way the fiscal policies are sometimes administered because, for instance, the tax-to-GDP ratio was 5 percent, then it was increased to 12.4 percent to get more from those who were paying, but that was never the problem”, he said.
Awoyemi explained that the challenge was understanding how the government could deliver value and expand the tax base, rather than simply increasing collections from existing taxpayers.
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Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), said Nigeria still operated with a unitary mindset that failed to adequately engage subnational governments in addressing poverty and the rising cost of living.
“When we talk about these issues, actually, the closest to the grassroots are the local governments. But hardly do we even engage them to find out what they do with their resources”, he said, pointing to weaknesses in accountability and checks and balances.
Yusuf mentioned that while states have seen increased resources due to economic reforms, the federal government is simultaneously burdened by rising debt service costs nearing 15 trillion naira. He highlights a “free rider” problem where states host industries and bear infrastructure costs but do not retain significant tax revenue like VAT or company tax.
Using Ogun State as an example, he noted that manufacturing firms place heavy pressure on local infrastructure and the environment, yet the states rely primarily on PAYE tax.
“There is a call for a more equitable system that provides incentives beyond PAYE to encourage states to actively seek and host industrial development”
Jigawa ranked as the top-performing state nationally, followed by Abia and Enugu, according to data from Phillips Consulting’s 2026 State Performance Index
The data also revealed Lagos State as a primary revenue engine, accounting for approximately 39 percent of Nigeria’s total Internally Generated Revenue (IGR)
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Adebajo said JPMorgan Chase’s return was a positive signal, but warned that Nigeria must avoid the policy instability that previously affected the bank’s operations.
He said the company first came to Nigeria in 1961, but had to leave after some years because the government took 60 percent of their business from them and started to impose a chairman, managing directors, and different policies on them.
“The case shouldn’t be the same this time around, as long-term retention of JP Morgan requires stable policies”, he said.
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