October 14, 2025
A total of N4.43 trillion from the Federation Account Allocation Committee, FAAC, between January and July 2025 was shared amongst Nigeria’s 36 states, with receipts of oil-rich states accounting for about 35% of total disbursements.
According to data from the National Bureau of Statistics, NBS, and FAAC reports showed that Delta State received the highest net allocation during the period with N361.23 billion followed closely by Rivers N301.18 billion, Lagos N279.03 billion, Akwa Ibom N278.11 billion, and Bayelsa N274.81 billion.
These top five states alone accounted for nearly 35% of the total FAAC disbursement to all states within the seven-month period.
On the other hand,
Ekiti received N70.83 billion and
Ogun N67.20 billion to be at bottom of the distribution table.
The dominance of the oil-producing states in FAAC allocation reflects Nigeria’s continued dependence on petroleum revenue as the main source of government revenue.
READ MORE; FAAC Shares N1.818tr Allocation In June.
The derivation principle, which grants 13% of oil and gas revenue to producing states, has kept states like Delta, Rivers, and Bayelsa consistently ahead of others in monthly allocations.
While Delta’s N361.23 billion leads the pack, analysts note that the state’s high receipts are largely tied to oil derivation payments, not internally generated revenue (IGR).
Similarly, Rivers and Akwa Ibom, both key crude-producing states, benefited heavily from derivation inflows and value-added tax (VAT) returns from industrial activities within their jurisdictions.
With bulk of its FAAC receipts coming from VAT and statutory allocations, in addition to its own robust IGR base estimated at over N400 billion annually, Lagos State, Nigeria’s commercial nerve centre, stood out as the highest-earning non-oil-producing state, received N279.03 billion in seven months.
Economists say Lagos’ performance reinforces the importance of economic diversification at the subnational level.
According to the CEO of the Centre for the Promotion of Private Enterprise, CPPE, Dr. Muda Yusuf, Lagos demonstrates that
“Fiscal independence and competitiveness are achievable through strategic investments in infrastructure, urban productivity, and governance efficiency.”
READ MORE; Three Tiers Of Govt. Share N1.678tr For The Month Of February
Despite their huge population, northern states collectively received smaller shares of the FAAC allocation.
The most populous northern state, being Kano, ranked sixth overall allocation with N149.81 billion, while Katsina (N109.31 billion, Borno, N110.00 billion, and Jigawa, N106.87 billion, trailed far behind the oil-rich southern states.
Most northern states rely almost entirely on federal transfers to fund their budgets.
Analysts are of the views that the gap between resource-rich and resource-poor regions could adversely affect the implementation of government new fiscal reforms.
Lagos-based legal practitioner, Barrister Ralph Udo, noted that “FAAC formula, to a great extent, rewards resource control, rather than fiscal efficiency,” he said, “For me, that should serve as a sufficient incentive for states to explore strategies to boost their IGR. Until states embrace the intelligence of fiscal independence, boost IGR, and reduce waste, Nigeria will remain stuck in a rent-sharing economy,” said Barrister Udo, the Principal Partner of Ralp Udo Chambers.
Middle-Belt and Southeastern States show modest gains. The states maintained mid-range allocations, driven by their contributions from solid minerals and agriculture.
The Middle Belt, are;
Benue, N104.58 billion.
Niger, N97.38 billion.
Kogi, N95.20 billion,
READ MORE; FG, States, LGCs Share N1.4Trillion From N2.6Trillion For October 2024.
Meanwhile, southeastern states such as Anambra, N111.85 billion, Enugu, N92.71 billion, and Abia, N98.12 billion, received moderate disbursements.
The Southeast’s relatively lower allocations highlight low federal allocation and the need to increase IGR
The NBS data bring renewed attention to Nigeria’s long-standing debate over fiscal federalism.
Critics argue that the current model promotes fiscal laziness, as most states rely on Abuja for monthly disbursements rather than building sustainable local economies.
The distribution of FAAC funds has rekindled the argument for economic restructuring and resource control.
Allowing states to retain a higher share of revenues from local resources could spur competition, innovation, and accountability.
