By Patrick O. Okigbo III, Founding Partner, Nextier
When Peter Mbah took office as governor of Enugu State, Nigeria, in May 2023, the state’s internally generated revenue stood at ₦26.8 billion ($58.3 million). By the end of 2025, his revenue service reported ₦406.7 billion ($280.5 million) at the respective prevailing dollar exchange rates. A fifteen-fold increase (in local currency terms) in thirty months, achieved without raising tax rates, is the kind of subnational result that ought to interest anyone working on state capacity in low-income settings. It has been celebrated accordingly across Nigerian media.
However, the celebration has obscured what the numbers actually say. Of that ₦406.7 billion, only ₦51.5 billion was tax revenue. The remaining ₦355 billion, more than 87 per cent of the total, came from what the state’s revenue chairman describes as the recovery and optimisation of moribund assets. The tax line did grow, from ₦16.2 billion to ₦51.5 billion, roughly a tripling. That is meaningful. But it is a different story from the one the headline numbers celebrate, and the difference matters for what we should infer.
As presented, the Enugu story leans on the fiscal-social contract relationship established by Charles Tilly and formalised by Tim Besley and Torsten Persson. It argues that states build legitimacy by converting collected taxes into visible public goods, securing the citizens’ willingness to comply. As told, Enugu achieved this feat through governance reforms. That claim may be premature, as the results may be much narrower; possibly, more useful.
Here is what we know—and they are not trivial. The government recovered moribund state assets, digitised revenue administration to plug leakages, and translated the resulting revenue into visible capital investment. These are not easy feats in a low-trust, low-capacity society. What is not settled is whether this is enough to trigger and sustain a tax compliance loop as predicted by the fiscal-social contract literature. At best, Enugu is at the start of that loop. However, its success presents an interesting case for scholars seeking models to spur economic growth.
Understanding how a Nigerian revenue service can help trigger growth demands a more robust framework. After a decade and a half of questioning why some institutions work, and most don’t, I have settled on a framework that asks five fundamental questions. Who actually holds the power to drive change, and who is shut out? What payoffs (or incentives) do those in power face, and in what direction? Do the rules police (or bind) even the powerful? What is the citizens’ perception (or belief) in what the state will do for them? How do past choices constrain what’s possible today (path dependency)? Applying this Five Ps framework to Enugu yields an account that is more sedate than the headlines suggest. However, the insights are more useful than sceptics allow.
Payoff—the second P—is the most legible force the governor faced. With a keenly contested election, he understood the need to win over the people with visible development. So, he set an audacious goal: a fivefold increase in the state’s GDP within eight years. This overly audacious goal stood in the face of declining revenue, a challenging macroeconomy, rising secessionist agitation, and several other challenges. Sensing the opposition’s disarray, he found the window to take administrative risks. His commercial instincts as the founder of a leading oil and gas company made him comfortable in the world of fiscal reform and asset optimisation. This point is important because it explains the preconditions for those thinking of initiating similar reforms. It also explains why other governors have not followed similar pathways. Their payoffs—incentive structures—are different.
On the question of institutional durability, path dependency—the fifth P—demands a deeper review. The administrative changes in Enugu are real; however, if history holds any merit, these wins could be unwound by a successor who prefers a fragmented tax collection for the rents it generates. For instance, it is more of Mbah’s personality than institutional architecture that is driving the reforms. What happens when his tenure ends? Furthermore, the revenue from the asset recovery cannot be repeated once the moribund assets have been recovered. Hence, the 2026 target of ₦870 billion will require either further asset monetisation, which has a ceiling, or genuine growth in the tax base, which depends on outcomes which are yet to materialise. Hence, the durability question remains unsettled.
Perception—the fourth P—is where the most interesting empirical work remains to be done. The authorities claim the 72 per cent growth in tax revenue in 2025 proves that something fundamental has shifted in the citizens’ willingness to pay. This claim is curious given the lack of taxpayer survey evidence, compliance data, or a counterfactual analysis with other subnational entities. Wilson Prichard’s work across multiple African settings shows that the link between public-goods provision and tax morale is real but conditional.
Let’s return to the main question. Can subnational progress rebuild trust in the state? We can conclude on three things.
First, Enugu presents an interesting case that should not be dismissed, given that the headline numbers have not yet been fully disaggregated. That would be a mistake. Its tax-revenue trajectory alone is striking by Nigerian standards, and the administrative architecture and political will that produced it should be studied to see how well it travels across polities.
Second, the lessons that can be drawn from Enugu, while narrower than the official narrative claims, offer compelling green shoots in a place seeking success models. The case shows what a focused executive can achieve in fiscal administration under prevailing political conditions. They do not yet evidence the reconstruction of the fractured fiscal-social contract relationship. That would require more time to be fully grounded.
Third, the deepest question is institutional. While the Enugu numbers are impressive, the bigger question is whether the reforms will survive the people who initiated them. On that test, Enugu is still a hypothesis. So is much of what passes for reform across the African continent. The recipe for building the institutions is known; the political capital and tenacity required to build them are not easy to come by.
Nigeria has a significant deficit of public trust. Personality-driven progress, while important, may not be enough to plug the hole. The resolution requires the slow accumulation of institutional changes that outlast their initiators. Enugu may yet be part of that accumulation. Time will tell, especially if Peter Mbah secures a second tenure that ends in 2031 and sustains the momentum. Those two factors could bring us closer to a scalable model.