State Governors, Local Government Chairmen Emerge as Nigeria’s New Financial Powerhouses

President Bola Tinubu’s economic reforms have dramatically reshaped Nigeria’s financial landscape, shifting the balance of wealth from the federal level to the states and local governments. For the first time in decades, subnational governments appear richer and more financially independent than ever before.

Once struggling to pay salaries and complete projects, states and local councils are now enjoying record allocations. Contractors working with state governments are reportedly being paid faster and in larger sums than their counterparts at the federal level.

This transformation stems largely from Tinubu’s bold policy decisions, most notably the removal of fuel subsidies, which tripled allocations to local governments and significantly increased state revenues. Many states have cleared long-standing debts, revived abandoned projects, and embarked on new ones with renewed financial confidence.

Observers note that governors now command greater liquidity, approving contracts and releasing funds more swiftly than in the past. The days of delayed allocations and borrowing to pay salaries appear to be over.

As a result, governors and local government chairmen have become the new “money bags” in Nigeria’s economy, driving spending and investments at the grassroots. Political analysts describe this as “leadership through strategic redistribution,” where resources once concentrated at the centre are now flowing downward to stimulate local development.

Governor Hope Uzodinma of Imo State praised the policy shift, noting that Tinubu’s reforms have empowered states more than at any point since independence. Increased allocations and tax inflows have allowed state and local governments to breathe new life into critical infrastructure and social services.

At the local government level, the change is particularly visible. With larger budgets and greater autonomy, council chairmen are funding projects that were once impossible, constructing schools, hospitals, and rural roads, as well as improving waste management and health facilities.

These developments also reflect a broader economic rebalancing. With states now less reliant on bank loans, many financial institutions are experiencing excess liquidity, forcing them to return funds to the Central Bank, a stark contrast to the past. The stability is largely credited to CBN Governor Olayemi Cardoso’s prudent monetary management.

Critics argue that the naira’s recent stability only follows a steep decline earlier under Tinubu’s government, but supporters point out that the removal of subsidies and foreign exchange distortions has freed up billions once wasted on defending the currency and subsidizing fuel.

Nigeria, they say, is now on a path toward long-term financial sustainability. For the first time in many years, the nation’s wealth is filtering down to the grassroots, empowering states and local councils to drive development from the bottom up.

This, according to many analysts, is the foundation of the new Nigeria a country rediscovering balance through reform, discipline, and a bold redistribution of economic power.