Nigeria’s 36 states shared a total of N4.43 trillion from the Federation Account Allocation Committee (FAAC) between January and July 2025, according to data from the National Bureau of Statistics (NBS) and FAAC reports.
The figures reveal that Delta State received the highest net allocation N361.23 billion followed 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 total FAAC disbursements to all 36 states during the seven-month period.
At the bottom of the list were Ekiti (N70.83 billion) and Ogun (N67.20 billion), the least beneficiaries of federal allocations.
Oil Revenue Still the Lifeline
The dominance of oil-producing states in FAAC distribution underscores Nigeria’s continued dependence on petroleum as its main source of government funding. The 13% derivation principle for oil and gas-producing states ensures that states like Delta, Rivers, and Bayelsa consistently remain ahead in federal allocations.
While Delta’s N361.23 billion tops the chart, analysts note that the state’s performance is driven largely by oil derivation, not internally generated revenue (IGR). Similarly, Rivers and Akwa Ibom have benefited significantly from derivation inflows and Value Added Tax (VAT) from industrial activity within their territories.
Lagos Retains Its Edge Among Non-Oil States
Lagos State remains the highest-earning non-oil-producing state, with N279.03 billion in allocations over seven months. The bulk of this came from VAT and statutory allocations, complementing its robust IGR base of over N400 billion annually.
According to Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), Lagos’ fiscal performance shows that subnational competitiveness is possible through sound governance and smart investments.
“Fiscal independence and competitiveness are achievable through strategic investments in infrastructure, urban productivity, and governance efficiency,” Yusuf noted.
Northern States Lag Behind
Despite its large population, northern Nigeria received a smaller portion of the FAAC share. Kano, the most populous state in the region, ranked sixth with N149.81 billion, while Katsina (N109.31 billion), Borno (N110 billion), and Jigawa (N106.87 billion) trailed behind.
Most northern states remain heavily reliant on federal transfers to fund their budgets. Experts warn that this dependence could worsen fiscal imbalances across regions.
“FAAC rewards resource control rather than fiscal efficiency,” said Barrister Ralph Udo, Principal Partner of Ralph Udo Chambers. “Until states boost IGR and reduce waste, Nigeria will remain stuck in a rent-sharing economy.”
In the Middle Belt, states such as Benue (N104.58 billion), Niger (N97.38 billion), and Kogi (N95.20 billion) maintained mid-range allocations, supported by agriculture and solid mineral contributions.
Meanwhile, southeastern states including Anambra (N111.85 billion), Enugu (N92.71 billion), and Abia (N98.12 billion) recorded moderate disbursements. Analysts say the figures highlight low federal allocations to the Southeast and the urgent need for economic diversification.
The new data renew the debate around fiscal federalism and Nigeria’s over-centralized revenue model. Critics argue that the system promotes fiscal laziness, discouraging states from building sustainable economies.
“States continue to behave like administrative outposts rather than economic entities,” said Chief Blakey Ijezie, Convener of Blakey’s National Economic Conference.
Experts believe allowing states to retain more of their locally generated resources would promote competition, innovation, and accountability. According to analysts at BudgIT Foundation,
“The future of Nigeria’s fiscal stability lies not in how much FAAC distributes but in how efficiently states manage and grow their economies.”
Ultimately, achieving sustainable subnational economies will depend on how effectively each state diversifies its revenue base, strengthens governance, and reduces reliance on federal handouts.
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