The “Middle Management” of Growth: Converting Nigeria’s Stabilisation Gains into Subnational Competitiveness

Abstract

Nigeria’s recent macroeconomic stabilisation, anchored in the removal of fuel subsidies, unification of the foreign exchange rate, and sustained monetary tightening, has begun to show results, with real GDP growth rising to 3.87 percent in 2025 from 3.38 percent
in 2024 (National Bureau of Statistics [NBS], 2026). Yet this paper’s central concern is not stabilisation itself but what determines whether its gains reach firms, workers, and households: subnational competitiveness. Most Nigerian states remain administrators of Federation Account Allocation Committee (FAAC) transfers, a constitutional entitlement, rather than architects of the regulatory, fiscal, and industrial conditions that convert federal-level stability into local investment and jobs. Drawing on data from the Debt Management Office, the National Bureau of Statistics, BudgIT, and Agora Policy, the paper examines internally generated revenue (IGR) concentration and the efficiency of subnational resource allocation, analyses regulatory friction between federal and state tiers, and, drawing on India’s state-level Business Reform Action Plan and Brazil’s 2023 consumption-tax reform, proposes a three-pronged competitiveness framework:
IGR diversification, regulatory harmonisation, and industrial cluster development. The paper also acknowledges that some states face structural disadvantages that competitiveness reform alone cannot resolve, and that for certain capital-intensive sectors federal industrial policy will remain more decisive than state action.