How Nigeria’s Inflation Crisis Is Silently Destroying State Budgets

In a plain government office in Yola, Iliya Dan Yaro sits with a budget document and a problem that no spreadsheet can fix. The man responsible for planning Adamawa State’s entire public expenditure is trying to build roads, hospitals, and water schemes in an economy where the price of cement and diesel can change before the ink dries on a contract.

Nigeria’s inflation crisis is not just a macroeconomic headline. It is quietly dismantling how state governments plan, spend, and deliver services to millions of Nigerians, and Adamawa State offers one of the clearest windows into that breakdown. In a wide-ranging interview with The Gazette, Dan Yaro, the Director of Budgets and Economic Planning, gave an unusually candid account of how Nigeria’s inflation state budget challenge is reshaping governance in one of the country’s most vulnerable regions.

His words should concern every Nigerian, north or south.

When the Budget Can No Longer Keep Up

The core problem Dan Yaro describes is what budget experts call a moving target. By the time Adamawa’s budget is approved by the State House of Assembly and contractors are mobilised to execute projects, inflation has already eroded the purchasing power behind every line item.

“We operate on budgets, and this budget is planned in such a way that you have to consider the market value of goods that will be used in providing social well-being for the people, constructing roads and hospitals, and providing pipe-borne water,” he told The Gazette. “But as prices keep rising consistently, what has been budgeted may not be enough to carry out those projects.”

The state’s 2026 budget was built on an assumed inflation rate of 19.1 per cent, down from Nigeria’s punishing peak of 34.8 per cent in December 2023, a 28-year high driven by the removal of petrol subsidies and a sharp naira devaluation under the Tinubu administration. But food inflation, the metric that matters most to ordinary households, remained stubbornly elevated across many communities at the time of this interview.

To keep projects alive without cancelling them, Adamawa has turned to a tool called ‘contract revaluation’, the upward revision of awarded contract sums to reflect current market prices. Dan Yaro confirmed no project has been stopped outright. “There is no project that has been stopped. It is only that there is what is called revaluation; as the price of goods rises, we also revalue the contract that was awarded based on the rising prices of goods and services,” he said.

Critics of contract revaluation argue it can become a cover for cost inflation and weak oversight. Adamawa’s House of Assembly has not publicly reported any scrutiny of revaluation claims for the current fiscal year. The Gazette requested the aggregate value of revalued contracts for the 2024 to 2025 fiscal period; the Ministry of Finance and Budget did not respond.

The state’s fiscal vulnerability runs deeper still. Adamawa, like most northern states, depends heavily on monthly Federation Account Allocation Committee disbursements, the federal pool of oil royalties, taxes, and customs duties shared across the three tiers of government. Those allocations are not fixed. “There is no specific amount. It depends on revenue, which is fluctuating. Sometimes it could be higher, and sometimes it will be lower. That is how it is being operated,” Dan Yaro said.

Adamawa’s 2026 budget projects total revenue of approximately ₦289 billion, with a significant share riding on those unpredictable FAAC inflows.

The Farmer’s Impossible Arithmetic

If the budget room is where Adamawa’s inflation crisis is managed, the farm gate is where it is truly felt. Dan Yaro captured the suffering of the state’s smallholder farmers in a single, damning calculation.

A bag of fertiliser costs around ₦50,000 on the open market. A bag of harvested maize, the very crop that fertiliser was used to grow, fetches approximately ₦25,000. “You have to sell about four bags of maize before you can buy two bags of fertiliser,” he said bluntly. “This has seriously affected the farmers.”

That ratio describes a farming sector operating in structural loss. For every harvest season, many smallholders in Adamawa are, by definition, spending more to grow their crops than those crops will earn them. The rational response is to plant less or stop farming commercially altogether, and that is precisely the dynamic deepening food insecurity in a state the north-east calls its food basket.

Herbicide costs tell the same brutal story. Products that sold for between ₦1,000 and ₦1,200 per litre a few years ago now command between ₦5,000 and ₦7,000 per litre, a rise of 400 to 600 per cent that tracks almost exactly with the naira’s collapse against the dollar, since most agricultural chemicals used in Nigeria are imported. “When you use it on your farm, the output cannot cover the cost of all these inputs,” Dan Yaro acknowledged. “It is a serious problem.”

Nigeria’s fertiliser supply chain has been broken for decades, plagued by subsidy diversion, distribution cartels, and a weak national database that excludes most smallholders from whatever targeted support the federal government offers. The Tinubu administration’s reforms have not yet translated into price relief for farmers in Adamawa.

The cruel irony is that Adamawa is classified as an agrarian state, home to vast plains capable of growing maize, sorghum, rice, groundnut, cassava, and cattle. Its agricultural potential is enormous. Yet many of its residents cannot afford to feed their families adequately. Dan Yaro acknowledged the contradiction without resolving it. “Yes, the reason is that, like I’ve told you, Adamawa State is an agrarian state,” he said, before pausing.

Post-harvest losses, crumbling rural roads that raise the cost of moving produce to urban markets, and a decade of disruption from Boko Haram have broken the link between what farmers grow and what consumers can buy. Natural endowment, without infrastructure and institutional support, delivers very little to the rural poor.

The North Is Suffering More, and the Data Backs It Up

Dan Yaro’s most striking observation was not about Nigeria versus the world. It was about Nigeria versus itself. When asked to compare Adamawa’s cost of living in Nigeria with conditions in southern states, his answer was unsparing.

“When you go to the southern part, their own is not like ours here. The prices of their goods there are better. They are not suffering the problems we are suffering here,” he said. “Even goods like garri and palm oil that come from the south still maintain their prices down there. But up here, prices have gone up. Even if they have that relief, it is not like our own, because ours is persistent.”

The north’s compounding disadvantages are well documented: greater dependence on imported food staples; longer distances from seaports; persistent insecurity disrupting farming and supply chains; weaker banking infrastructure; and higher energy costs in areas with limited grid access. When headline inflation moderates nationally, the north typically feels it last and the least.

Dan Yaro also drew a pointed comparison with Cameroon, where the CFA franc’s peg to the euro provides a monetary discipline unavailable to Nigeria. “If you bought something three years ago in Cameroon, when you go there, the price remains decent,” he said. “But today, if you go to the market here, they will tell you ₦150,000, and after three days you go back, and they say ₦180,000. They will say the price of the dollar has gone up.”

That mechanism is textbook imported inflation; merchants purchasing goods in foreign currency pass the full weight of naira depreciation onto consumers, compounding domestic price pressures that are already extreme. In Adamawa’s border communities, where cross-trade with Cameroon and Chad is part of daily life, residents feel the exchange rate math in their pockets every single week.

On the global comparison, the director was even more direct. Asked how Nigeria’s food inflation ranks against other economies, he did not hesitate. “Nigeria is the worst. Our own is the worst.”

The Ministry of Finance and Budget did not respond to The Gazette’s requests for comment as of press time.

The governor’s flagship response to the cost-of-living crisis is the Fintiri Business Wallet Programme, a cash-transfer scheme that distributes ₦50,000 to qualifying residents across the state. Official figures confirm 60,000 beneficiaries so far, with a target of 140,000 total, potentially reaching an estimated 700,000 people when household units are counted.

Dan Yaro defended the programme with visible pride. “It is only the Adamawa State Government that gives out the Business Wallet to its citizens among the 36 states, so they can alleviate their sufferings,” he said. The state also became the first of Nigeria’s 36 states to implement the ₦70,000 federal minimum wage.

But ₦50,000, once enough to seed a small trade, now barely covers two bags of fertiliser. For the farmers watching their harvests fail to pay for their inputs, the market women doing daily inflation maths in their heads, and the civil servants whose salaries buy less every month, the arithmetic of survival in Adamawa has become as punishing as the state itself is fertile.

Dan Yaro ended the interview with a quiet admission that carried more weight than any budget figure. He confirmed that the north was feeling food inflation in Nigeria more acutely and more persistently than anywhere else in the country and that the relief visible in national statistics had not yet arrived in Adamawa’s villages and open markets.

“It is a serious problem,” he said, for the third time in an hour.

In a state where the soil can grow enough to feed the whole Northeast, that line should haunt every policymaker in Abuja.