FAAC: How 6 states shared N3.79 trillion

The six states in Nigeria’s Southwest received a total of N3.79 trillion from the Federation Account Allocation Committee (FAAC) disbursements between 2023 and the first quarter of 2026. The Federation Account Allocation Committee (FAAC) distributes revenues collected by the Federal Government among the federal, state, and local governments. An analysis of FAAC allocation within the […]

The six states in Nigeria’s Southwest received a total of N3.79 trillion from the Federation Account Allocation Committee (FAAC) disbursements between 2023 and the first quarter of 2026.

The Federation Account Allocation Committee (FAAC) distributes revenues collected by the Federal Government among the federal, state, and local governments.

An analysis of FAAC allocation within the period of 39 months ( 3years and 3months) shows that Lagos, Oyo, Ondo, Osun, Ekiti, and Ogun states received significant amounts of money, respectively.

For instance, Lagos remained the highest recipient of FAAC allocations throughout the period, receiving a total of N1.44 trillion between 2023 and Q1 2026.

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Oyo State received the second-highest allocation in the region, collecting N635.62 billion; Ondo state ranked third, receiving a total of N550.08 billion; Osun state received N423.7 billion; Ekiti state received N366.92 billion, while Ogun state received N372.4billion.

However, these monthly allocations are expected to fund their constitutional responsibilities, including the payment of workers’ salaries and pensions, the construction and maintenance of roads, the provision of healthcare and education, security support, agricultural programmes, and the execution of infrastructure and other public development projects.

What is FAAC?

Every month, revenues collected by the Federal Government, including crude oil earnings, company income tax, customs duties, Value Added Tax (VAT), electronic money transfer levy and other federally generated revenues, are paid into the Federation Account.

The Federation Account Allocation Committee (FAAC), made up of representatives of the federal, state and local governments, meets monthly to distribute these revenues according to constitutional and statutory formulas.

For many states, FAAC remains the single largest source of public revenue, funding salaries, pensions, schools, hospitals, roads and other government services.

The Federal Accounts Allocation Committee (FAAC) distributes monthly national revenue using a vertical formula: the Federal government 52.68%, State governments 26.72%, and Local government receives 20.60%.

Also, the oil-producing states enjoy an additional 13 percent derivation fund from oil revenues, giving them a significant advantage in FAAC allocations.

The beneficiary states are Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers

Although an increase in FAAC allocation does not necessarily mean a state generated more revenue internally. It often reflects changes in the total amount available in the Federation Account, driven by factors such as crude oil production, international oil prices, exchange rates, and federal tax collections.

The numbers

The analysis shows Lagos received the highest FAAC allocations throughout the review period. It received N371.39 billion in 2023 and N368.93 billion in 2024, before its allocation rose sharply to N514.6 billion in 2025. In Q1 2026, Lagos had already received N184.9 billion. Oyo state ranked second, receiving N207.37 billion in 2023, then N145.25 billion in 2024 before recovering to N213.7 billion in 2025. It received N69.3 billion in the first quarter of 2026.

Ondo followed with N156.33 billion in 2023, N142.45 billion in 2024 and N198.4 billion in 2025. It received N52.9 billion in the first three months of 2026.

Osun’s allocation fell from N141.48 billion in 2023 to N97.21 billion in 2024 before increasing to N144.9 billion in 2025. The state received N40.1 billion in the first quarter of 2026.

Ekiti received N107.5 billion in 2023, N93.22 billion in 2024 and N130.3 billion in 2025, while its first-quarter 2026 allocation stood at N35.9 billion.

Ogun received N120.72 billion in 2023, N90.77 billion in 2024 and N124.2 billion in 2025. Between January and March 2026, it received N36.7 billion.

What the figures mean for Governance

According to a public finance analyst, Ms.Olubunmi Akorede, FAAC allocations play a critical role in financing state governments.

She said the monthly disbursements are expected to fund constitutional responsibilities, including the payment of salaries and pensions, the construction and maintenance of roads, investments in healthcare and education, agricultural development, security support, and other infrastructure and social services.

“FAAC allocations are critical to state governments because they provide funds for public responsibilities such as payment of salaries and pensions, healthcare delivery, education, infrastructure development, roads, and other government services.”

“The pattern in the data reflects the volatility of Nigeria’s revenue base. When federally collected revenues decline, states immediately feel the pressure because many depend on FAAC to finance a significant portion of their budgets. Conversely, when revenues improve, as seen in 2025, states have greater fiscal space to implement projects and meet their financial obligations.”

She advised that the state governments to prioritise productive investments over short-term spending, noting that channeling FAAC allocations into critical sectors would strengthen economic growth, create jobs and improve the quality of life for residents.

“State governments should use FAAC allocations as an opportunity to invest in infrastructure that supports businesses, improve public schools and hospitals, expand access to water and sanitation, and strengthen agriculture. These are investments that can generate long-term economic returns and improve living standards.”