Nigeria @ 66: Tinubu Declares "End of Pain", "Age of Prosperity"

By Ben Oye

Three years ago, from Eagle Square, President Bola Ahmed Tinubu looked Nigerians in the eye and told them the truth no leader had dared to tell: the reforms would be painful.

Three years later, on Thursday 1st October, 2026, in his 66th Independence Day broadcast to the nation, he didn't ask for more patience, rather, he declared victory over the old order. "The age of reforms has ended. The age of prosperity has begun," he announced.

It was not just a speech. It was a closure.

The Courage to Do What Others Postponed

For decades, Nigerian leaders knew what had to be done - remove the $10 billion annual fuel subsidy that enriched a cartel, unify the multiple exchange rates that fed arbitrage, and stop the Ways and Means printing that destroyed the naira. They knew, but they calculated political consequences and walked away.

Tinubu did not calculate. In his first day in office, he ended subsidy and floated the naira. Inflation spiked, the cost of living bit hard, and the opposition predicted collapse. The President never blinked. That is the definition of courageous leadership - the ability to take the necessary hard decision without looking at the next election.

Today, the data has vindicated him.

The Numbers Behind Prosperity

The President's prosperity declaration is not rhetoric, it is backed by figures that every Nigerian can now see in their state accounts:

States Are Richer Than Ever:* Because subsidy removal freed trillions, FAAC allocation to states hit N4.65 trillion in H1 2026 alone. Lagos received N365.78 billion, Delta N331.43 billion, Rivers N295.99 billion. This is why states can now pay N70,000 minimum wage, clear pension arrears and still build roads. NBS confirms states IGR jumped 40.93% to a record N5.15 trillion in 2025, led by Lagos with N1.77 trillion. The reforms made states fiscally viable.

Debt is Being Tamed:* After years of uncontrolled borrowing, DMO reports subnational debt growth has slowed to just 1.49% in the second quarter of 2026, with total at N4.59 trillion. Major states like Lagos, Rivers and FCT actually cut their domestic debt last quarter. National domestic debt service fell to N2.14 trillion in second quarter and external debt service to $870.7 million. The debt trap is breaking. 

Revenue, Not Oil:  For the first time, VAT, not oil, is driving FAAC. In February 2026, Lagos alone contributed N101.34 billion in VAT. PAYE now accounts for 51% of IGR nationally. Nigeria is finally taxing consumption and productivity, not just crude.

The Economy is Growing: From 2.5% in 2023, GDP growth hit 4.07% in fourth quarter of 2025 and has held above 3.8% for a full year. Inflation, which peaked at 34% in 2024, is now on a steady decline as food production responds to improved exchange rate competitiveness.

From Reforms to Results

The President was clear: reforms were never the destination. Prosperity is.

He listed what the age of prosperity will mean - a new push for food security that will crash food prices, CNG buses and credit schemes that have already cut transport costs by 40% on key routes, student loans that have put 500,000 students back in school, and an industrial policy that will make Nigeria manufacture what it consumes.

His core message to Nigerians who endured the pain is: you were right to trust the process.

Why He Deserves Trust for Another Term

In three years, Tinubu has done what no leader since 1960 attempted - he fixed the foundation. The subsidy regime that funded a few is gone forever. The multiple exchange rates that rewarded connection are gone forever. The era where states came to Abuja with caps in hand every month is over.

To return to the old policies now would be to return to queues, to dollar scarcity, to a central bank funding government deficits. Nigerians have tasted hardship, but they have also seen that hardship with purpose ends.

At 66, Nigeria is no longer a nation managing poverty. It is a nation positioned for wealth. The President who had the courage to start the reforms is the only one with the credibility to manage the prosperity.

The age of pain is over. The age of prosperity has just begun.

Nigeria @66; Desirability and Sustainability of Subnational Domestic Debt

Ben Oye 

As Nigeria turns 66 on October 1st 2026, All eyes and ears are tuned to Abuja in anticipation of the traditional independence broadcast of the President. Public analysts, critics and supporters of the President and the ruling party will thoroughly dissect his speech. One issue the critics are expected to focus on is the desirability and sustainability of national public debt.

The 36 states and FCT will be celebrating with a combined domestic debt of N4.59 trillion according to recently released data from the Debt Management Office, DMO for second quarter of this year. That is N67.57 billion more than they owed in March and N627.35 billion more than June last year.

Of this figure, ten states hold N3.22 trillion or 70.2% while four states - Lagos, Delta, FCT and Rivers - alone hold 49.5% of the total. Lagos: N1.195trn, Delta: N369.30bn after adding N155.45bn in one quarter, FCT: N358.79bn after cutting N31.08bn, Rivers: N354.64bn, Edo: N214.93bn, Ogun: N189.05bn, Bauchi: N157.35bn, Niger: N140bn, Cross River: N130.01bn, Benue: N112.32bn. 

Governments, globally, borrow often for various reasons. Funding of developmental projects, development of capital market, smoothing revenue volatility, funding in times of emergencies induced by wars, natural disasters, pandemics etc, and prevention of economic disasters such as depression are some of the justifications for government borrowing.

Though many states' debt are unjustified for breaching the requirement of the Fiscal Responsibility Act, states such as Lagos, Rivers, and Ogun have demonstrated the capacity to effective manage public debt.

The debt to IGR ratio is the real fiscal independence test. According to the National Bureau of Statistics, states generated N5.15trn IGR in 2025, up 40.93% from N3.65trn in 2024. Lagos alone did N1.77trn, Rivers N428.42bn, FCT N356.34bn and Ogun N252.36bn. 

State       Debt Q2 '26       IGR 2025          Debt/IGR

Lagos 1,195bn      1,770bn            67.5%

Delta 369.3bn        110bn             335.7%

FCT           358.79bn       356.34bn           100.7%

Rivers 354.64bn     428.42bn             82.8%

Edo            214.93bn         85bn*           252.9%

Ogun 189.05bn     252.36bn             74.9%

Bauchi 157.35bn       b20bn*             786.7%

Niger 140bn        b30bn*             466.6%

C/River      130.01bn         40bn*                       325.0%

Benue 112.32bn        29.38bn                  l382.3%

*Delta, Edo, Bauchi, Niger, Cross River estimates based on NBS 2024 + 40% growth. Benue IGR 29.38bn confirmed in FAAC report. 

By the information contained in the above table, Lagos, Rivers and Ogun can clear their domestic debt with less than one year of IGR. Delta, Edo, Cross River, Benue, Niger and Bauchi need 3-7 years of total IGR to clear their debt. Bauchi is most exposed.

Most states still depend heavily on statutory allocations from the Federal Allocation Account Committee. In first half of 2026, Lagos got N365.78bn, Delta N331.43bn, Rivers N295.99bn, FCT N123.67bn. Total FAAC to states from January to June, 2026 stood at N4.65trn. 

We annualise the half year total revenue of of the following states to get their respective debt to revenue percentage:

State.   Total Revenue/yr.       Debt/Revenue %

Lagos        2,501bn                      47.8%

Rivers        1,020bn                      34.8%

Delta        772bn                      47.8%

FCT                603bn                      59.5%

Ogun        400bn                      47.2%

Edo                253bn                      84.9%

Niger         190bn                      73.7%

Cross River 175bn                      74.3%

Benue         165bn                      68.0%

Bauchi          160bn                     98.3%

When FAAC is added, sustainability improves dramatically. Only Edo and Bauchi cross 80%. This explains why FAAC reform is existential. If oil price falls or VAT is re-shared, Edo, Bauchi, Niger, Cross River and Benue will hit a wall.

Using rebased national GDP to test debt sustainability of these stars, Lagos economy is estimated at ₦86trn, Rivers ₦22trn, Delta ₦18trn,  and Ogun ₦12trn. All 10 states have debt-to-GDP under 3%, except FCT at 4.5%. By international 10% subnational threshold, debt looks small relative to GDP. Problem is not size, it is cash flow - IGR.

How Much Goes to Servicing? DMO reported national domestic debt service fell to N2.14trn in Q2 2026. For states, domestic debt service averages 18-24% of debt stock annually at current Treasury-Bill/Bond rates.

Lagos services its debt with an estimated ₦215bn/year  representing 12% of IGR and  8.5% of total revenue. Rivers: ₦64bn  translating to 14.9% of IGR or 6.2% of total revenue. The two states have a highly sustainable debt going by this.

However, Delta services its debt with ₦66bn annually. It amounts to 60% of IGR or 8.5% of total revenue. This shows a high IGR stress, It is moderate if FAAC holds.

On the other hand, Bauchi, Niger, Benue, and Cross River have debt service  profile of between 50-110% of IGR. Without FAAC, they cannot service debt and pay salaries.

Nigeria's debt problem is not federal alone. Stakeholders should pay more attention to activities of subnational governments to ensure even national development. At 66, we have two Nigerias:

Lagos, Rivers, Ogun, FCT  are VAT-driven survivors. Their debt is below 100% of IGR. Their VAT receipts in Feb 2026 alone are hefty with receiving Lagos N101.34bn, showing why VAT is now bigger than statutory allocation.

Delta, Edo, Bauchi, Niger, Cross River, Benue are FAAC addicts.  Their debt is 250-786% of IGR. Delta's 72% jump in one quarter and FCT's 405% year-on-year growth narrative shows borrowing to cover recurrent, not capital. 

Moreover, the slowdown to 1.49% quarterly growth is deceptive because Delta alone added more than the total net increase while Enugu, FCT, Rivers and Ogun cut debt. 

For true debt sustainability states must grow IGR beyond PAYE which already provides 51.3% of all IGR and 69.51% of tax revenue. Otherwise, any FAAC shock will turn domestic debt from a financing tool to a fiscal trap.