By Maryam Ibrahim and Oluchi Nkeonye | The Federation Account Allocation Committee (FAAC) has completed the distribution of revenue for January to September 2026, following its October meeting. The figures show continued nominal revenue growth, but also volatile monthly receipts and a substantial shortfall in mineral revenue against budget. This analysis examines the sources of revenue, deductions and allocations across the three tiers of government, and considers the implications for fiscal planning and public services.

Gross FAAC revenue for January to September 2026 totalled ₦31.46 trillion. Statutory revenue contributed ₦24.25 trillion, or 77.1%, while value added tax (VAT) contributed ₦7.21 trillion, or 22.9% (Figure 1). All monetary comparisons in this analysis are in nominal terms.
Of the gross revenue, ₦20.36 trillion, or 65 %, was available for distribution before augmentation. The remaining ₦11.10 trillion, or 35%, was deducted for savings, interventions, refunds, transfers and collection costs (Figure 2).

A further ₦450 billion in augmentation brought total distributions to ₦20.81 trillion. The Federal Government received ₦7.35 trillion; the states got ₦7.01 trillion; and local governments received ₦4.92 trillion. A further ₦1.53 trillion went to oil-producing states under the 13% derivation provision. Derivation is shown separately in the distribution breakdown, although it also accrues to state governments (Figure 3).
Interventions accounted for the largest deduction, at ₦4.78 trillion, followed by savings at ₦3.56 trillion. In nine months, refunds amounted to ₦1.21 trillion and collection costs to ₦1.09 trillion. Transfers, at ₦469.06 billion, were the smallest category (Figure 4).

The figures reveal several important trends in revenue growth, budget performance and the distribution of resources. Ten of these trends and patterns are discussed below. 

1.    Gross revenue is rising but growth is slowing

Gross FAAC revenue increased by ₦3.51 trillion, or 12.6%, from ₦27.95 trillion in January–September 2025 to ₦31.46 trillion in the corresponding period of 2026 (Figure 5). In nominal terms, the latest nine-month total is about 4.6 times the 2021 figure, equivalent to compound annual growth of 35.5%. However, annual growth peaked in 2024 and has roughly halved in each subsequent year. The ₦3.51 trillion increase in 2026 was less than half the ₦8.97 trillion increase recorded in the corresponding period of 2024.

The sharp rise in 2024 followed the exchange-rate and fuel-subsidy reforms introduced in 2023. These reforms provide a plausible explanation for part of the increase in naira receipts. Tax reform implementation and higher oil prices associated with the conflict in Iran may also have supported revenue in 2026. The aggregate figures alone, however, do not establish how much each factor contributed.

2.    Nine months of revenue exceeded four of the previous five annual totals

Gross FAAC revenue for the full year rose from ₦9.23 trillion in 2021 to ₦35.81 trillion in 2025 (Figure 6). The largest annual increase occurred in 2024, when revenue rose by 76.5%, from ₦16.28 trillion in 2023 to ₦28.74 trillion in 2024. By September 2026, cumulative revenue of ₦31.46 trillion had exceeded the full-year totals for 2021, 2022, 2023 and 2024, and reached approximately 88% of the 2025 total.

The 2026 nine-month figure was 240.8% above the 2021 annual total, 154.5% above 2022’s, 93.2% above 2023’s and 9.5% above 2024’s. It should be borne in mind that these changes are in nominal terms, and not like-for-like measures of annual growth or purchasing power.

Average monthly revenue in January–September 2026 was ₦3.50 trillion, compared with ₦2.98 trillion over the whole of 2025. If the nine-month pace continues, full-year gross revenue would reach approximately ₦41.95 trillion. This is a simple annualization, not a forecast, as averages do not take account of seasonal revenue peaks. Also, other factors like oil price and exchange rate may increase or reduce the revenue outturns for the remaining three months of the year.

3.    Third quarter revenue was highest but quarterly growth slowed

Monthly gross revenue ranged from ₦2.23 trillion in February to ₦5.15 trillion in July, a ratio of about 2.3 to one (Figure 7). Quarterly receipts rose from approximately ₦7.63 trillion in the first quarter to ₦11.08 trillion in the second and ₦12.75 trillion in the third. Growth slowed from about 45% between the first and second quarters to 15% between the second and third. September receipts of ₦3.91 trillion were 24% below the July peak. The revenue surge in June and July can be attributed to seasonality, as most companies pay their corporate income tax (CIT) in the middle of the year. 
This volatility makes any single month a weak basis for recurring expenditure commitments. Governments should plan against a cautious revenue baseline and distinguish sustained gains from temporary increases.

4. Mineral and non-mineral statutory receipts were nearly equal

Statutory revenue contributed 77.1% of gross FAAC receipts, with VAT accounting for the remaining 22.9%. The statutory component comprised approximately ₦12.35 trillion in mineral revenue and ₦11.91 trillion in non-mineral revenue (Figure 8).

Mineral revenue accounted for about 39.2% of gross receipts, non-mineral statutory revenue for 37.9%, and VAT for 22.9%. Within statutory revenue, the mineral and non-mineral shares were approximately 50.9% and 49.1%, respectively. The near-even split within statutory revenue suggests a broader revenue base than one dominated by mineral receipts. This is a notable departure from the past when mineral revenue dominated not just statutory revenue but also gross FAAC revenue.  

5. Mineral revenue accounted for most of the budget shortfall

Mineral revenue reached ₦12.35 trillion against the ₦27.98 trillion budget as shown in Figure 9. This represents 44.1% of the target and a shortfall of approximately ₦15.63 trillion. Non-mineral revenue performed better, reaching ₦11.91 trillion against ₦14.21 trillion budget, or 83.8% of the target.

The mineral revenue shortfall is largely explained by the production assumption in the budget. The 2026 budget used an oil-price benchmark of US$64.85 per barrel and a production assumption of 1.84 million barrels per day. The reported monthly production range of 1.48–1.77 million barrels per day falls below that assumption. Brent crude has sold for an average of $91 a barrel in 2026, which is $26.15 above the budget benchmark price. The shortfall in mineral revenue indicates that higher oil prices have not offset continued production weakness and/or optimistic production forecast.

Combined mineral and non-mineral receipts amounted to ₦24.26 trillion, or 57.5% of the combined ₦42.19 trillion budget, leaving a gap of ₦17.93 trillion. This shows that mineral revenue accounted for 87.17% of that gap. The comparison points to a substantial risk to spending plans. 

6. Deductions fell modestly but their composition changed sharply

Deductions fell from ₦11.50 trillion in January–September 2025 to ₦11.10 trillion in the corresponding period of 2026, a decline of approximately 3.5%. Deductions’ share of gross revenue also fell from 41.1% in nine months of 2025 to 35.3% in the corresponding period in 2026. Consequently, distributable revenue before augmentation rose from ₦16.45 trillion to ₦20.36 trillion, an increase of 23.8%, compared with gross revenue growth of 12.6% (Figure 10).
The ₦3.91 trillion rise in distributable revenue exceeded the ₦3.51 trillion increase in gross receipts because deductions fell by approximately ₦400 billion. Lower deductions therefore contributed to the increase in resources available to the three tiers of government.

 
The modest fall in total deductions conceals a substantial change in their composition (Figure 11). Refunds fell by approximately ₦3.99 trillion, moving from the largest deduction category to the third-largest. Meanwhile, interventions and savings increased by approximately ₦3.75 trillion, from ₦4.59 trillion to ₦8.34 trillion. Together, interventions and savings accounted for 75.1% of deductions in nine months in 2026, compared with 39.9% in the corresponding period in 2025.

7. Federal receipts grew fastest while local governments lost share

Total distributions, including augmentation and the separately reported derivation allocation, rose from ₦16.45 trillion in January–September 2025 to ₦20.81 trillion in the same period of 2026. This was an increase of ₦4.36 trillion, or 26.5%. The 2026 figure includes ₦20.36 trillion in distributable revenue and ₦450 billion in augmentation.

The Federal Government recorded the largest increase in both absolute and percentage terms. Its receipts rose by approximately ₦1.70 trillion, or 30.0%, from ₦5.66 trillion to ₦7.36 trillion. Its share of total distributions increased from 34.4% to 35.3%. This is because deductions are made from statutory revenue where the federal government receives between 45.83% (mineral revenue after derivation) and 52.68% (non-mineral revenue). Lower deductions thus boost FG’s share of FAAC. Receipts for states rose by ₦1.48 trillion to ₦7.01 trillion, while its share increased slightly from 33.6% to 33.7% (Figure 12).

Local government receipts increased by ₦880.74 billion, or 21.8%, to ₦4.92 trillion. LGAs’ share of total distributions nevertheless declined from 24.5% to 23.6%, a fall of about 0.9%. Derivation receipts rose by 24.3% to ₦1.53 trillion, likely out of higher oil prices in most of 2026. It is worth noting that all categories received more allocations in nominal terms; the decline for LGAs was in relative share, not in the amount received. It is also worth noting that these changes do not indicate a change in the allocation formulas.

8. All states gained but larger recipients secured the biggest naira increases

The gross allocation to states was ₦8.43 trillion in January–September 2026, compared with ₦6.76 trillion a year earlier, an increase of approximately 24.7% (Figure 13). Every state recorded an increase, ranging from 16.3% in Anambra to 32.3% in Akwa Ibom (Figure 14).
Lagos and Delta recorded the largest naira gains, at ₦171.59 billion and ₦131.63 billion, respectively. Osun recorded the smallest, at ₦23.96 billion. A similar percentage increase produces a larger naira gain for a state with a larger starting allocation. Percentage growth and absolute gains therefore reveal different things.

9.    Derivation and VAT explain the leading states

For January-September 2026, Lagos received ₦708.38 billion, followed by Delta with ₦649.53 billion, Rivers with ₦576.46 billion, Akwa Ibom with ₦515.32 billion and Bayelsa with ₦501.36 billion. Together, these five states got ₦2.95 trillion, or 35% of gross state allocations, up from 33.9% for the same period in 2025. They accounted for 39.6% of the increase in state allocations between 2025 and 2026 and occupied the same positions in both years (Figures 15–17).

The leading states have different revenue profiles. Statutory allocations, which includes 13% oil derivation, accounted for approximately 82–85% of receipts in Delta, Rivers, Akwa Ibom and Bayelsa. Lagos, by contrast, received ₦588.34 billion from VAT, equivalent to 83% of its ₦708.38 billion total and approximately 16.8% of the total VAT allocations to the states. These differences imply different exposures. Oil-linked receipts are particularly important to the leading South-South recipients, while VAT is especially important to Lagos. 

10. The number of councils alone does not explain local government allocations

Local governments in four states received more than ₦200 billion in total: Lagos, ₦462.65 billion; Kano, ₦258.84 billion; Rivers, ₦230.04 billion; and Oyo, ₦213.24 billion. Together, they received approximately ₦1.16 trillion, or 23.7% of all local government allocations (Figures 18 and 19). It is important to note that these are totals for councils within each state, not allocations to the state governments.

Kano has 44 local government areas and Oyo has 33, but council numbers alone do not explain the ranking. Lagos has 20 local government areas, yet its councils received ₦13.96 billion more than the ₦448.69 billion received by the combined 78 councils in Kano (44) and Katsina (34). This is primarily because Lagos’ LGAs, like the state itself, receive the bulk of VAT revenue on account of derivation. The councils in the three highest-receiving states together received approximately ₦951.53 billion. That was ₦114.49 billion, or 13.7%, more than the ₦837.04 billion received by councils in the ten lowest-receiving states, excluding the Federal Capital Territory.

Conclusion

The first nine months of 2026 brought more nominal revenue and larger distributions to every tier of government. Lower deductions helped distributable revenue grow faster than gross receipts, while augmentation provided an additional boost. Nevertheless, monthly receipts remained volatile, mineral revenue fell well below budget, and deductions still absorbed more than a third of gross receipts.

Fiscal planning should therefore rest on realistic revenue assumptions. There is need for greater transparency and accountability on the reasons for and utilisation of some of the deductions, especially interventions and refunds. Governments across the board also need to show how larger allocations translate into better services and development outcomes. 

By Ayobami Ayorinde, Maryam Ibrahim and Oluchi Nkeonye | Around the middle of July, the Federation Account Allocation Committee (FAAC) shared the revenue generated for the month of June 2026 among the three tiers of government and other statutory recipients. This allocation marks the end of the first half of the 2026 fiscal year, providing an opportunity to examine how FAAC disbursements have evolved over the past six months. In this analysis, we review allocation trends from January to June of 2026 and highlight the implications for fiscal management across the three tiers of government.

The total gross FAAC revenue in the first half of 2026 was ₦18.72 trillion. Statutory revenue remained the dominant source of FAAC receipts, contributing ₦13.95 trillion, which is equivalent to 75% of the total gross revenue, while VAT accounted for ₦4.77 trillion (25%) as shown in Fig 1.

Of the total gross revenue generated during the period, ₦12.59 trillion (67%) was available for distribution to the three tiers of government, while the remaining ₦6.13 trillion (33%) was deducted for savings, interventions, refunds, transfers, and the cost of collection, as seen in Fig 2.

The total distributable revenue and augmentation for the first half of 2026 was shared across the three tiers of government. The Federal Government received ₦4.57 trillion while the 36 states shared ₦4.47 trillion. The 774 Local Government Areas received ₦3.13 trillion while the 13% derivation allocation to oil-producing states amounted to ₦864.89 billion, as shown in Fig 3.

An analysis of the deductions shows that Savings and Interventions accounted for the largest share, amounting to ₦2.30 trillion and ₦2.14 trillion, respectively. These two represented the bulk of all deductions made during the period. Refunds followed at ₦714.51 billion while the Cost of Collection stood at ₦665.48 billion. Transfers, at ₦311.84 billion, were the smallest deduction in the first half of the year, as shown in Fig 4.

Below are some insights from FAAC Disbursements in the first half of 2026.

Half-Year Gross FAAC Revenue Increased by over 300% in Six Years

Between the first half of 2021 and the first half of 2026, gross FAAC revenue increased significantly by 323% from ₦4.43 trillion to ₦18.72 trillion as seen in Fig 5. More interesting is that the ₦18.72 trillion generated in just the first six months of 2026 exceeded the entire gross FAAC revenue recorded in each of 2021, 2022, and 2023 in nominal terms as shown in Fig 6.

The ₦18.72 trillion generated between January and June 2026 represents 52% of the ₦35.81 trillion gross FAAC revenue recorded for the whole of 2025. If this trend of revenue performance continues in the second half of the year, the gross FAAC revenue for 2026 may exceed that of 2025.

Increase in Distributable Revenue, Decrease in Deductions

Distributable revenue in the first half of 2026 rose by 24.4% from ₦10.12 trillion in H1 2025 to ₦12.59 trillion in H1 2026 as seen in Fig. 7 below. Over the same period, FAAC deductions declined by 16%, falling from ₦7.30 trillion in the first half of 2025 to ₦6.13 trillion in the corresponding period of 2026 as shown in Fig. 8.

As a result, a larger share of Gross FAAC revenue was available for distribution, with distributable revenue accounting for 67% of Gross FAAC in H1 2026, up from 57% in the same period of 2025.

Less Refunds, More Savings

A notable highlight in FAAC revenue during the first half of 2026 was the sharp decline in refunds as seen in Fig 9. Refunds fell by 80% compared to the corresponding period in 2025, significantly reducing its share of FAAC deductions. In H1 2025, refunds, largely comprising payments to states and local governments, accounted for 47% of total FAAC deductions. By H1 2026, that share had dropped to just 12%.

On the other hand, savings from Gross FAAC revenue increased substantially by 151% and became the largest component of FAAC deductions in H1 2026, accounting for 37% of total deductions from 15% in the corresponding period of 2025. Despite this, more money was allocated to Interventions between April to June 2026, particularly for national and state security, and state infrastructure. The breakdown of allocations to Interventions in the first half of 2026 is as follows: National Security Fund (₦ 1 trillion), Infrastructure Development Fund for States (₦777 billion), Military Intervention Fund (₦250 billion) and Intervention for State Security (₦108 billion).

Federal Government Regains Largest Share of Distributable FAAC Revenue

The distribution of Gross FAAC revenue shifted in favour of the Federal Government in the first half of 2026. Unlike the corresponding period of 2025, when the 36 states collectively received a slightly larger share of distributable FAAC allocations than the federal government, the federal government regained the top spot in H1 2026. In H1 2025, the states received a combined ₦3.43 trillion, marginally exceeding the Federal Government's ₦3.39 trillion as shown in Fig 10 below.

However, in H1 2026, the Federal Government's allocation increased to ₦4.57 trillion, surpassing the ₦4.47 trillion allocated to the states combined. However, a reallocation of the deductions (which go mostly to states) combined with derivation (which goes only to states), shows that the states get a higher portion of FAAC revenue than the FG.

June Remains the Month with the Highest Gross FAAC Revenue in the First Half of the Year

Just as it was in the first half of 2025, June recorded the highest Gross FAAC revenue in H1 2026 at ₦4.50 trillion as seen in Fig 11. This was likely driven by higher Company Income Tax (CIT) collections and other annual tax remittances typically due in June. In contrast, February recorded the lowest Gross FAAC revenue at ₦2.23 trillion, mirroring the trend observed in the corresponding period of 2025.

Lagos and Oyo Record the Highest Gross FAAC Increases

In terms of year-on-year growth, Lagos and Oyo states recorded the largest increases in Gross FAAC allocations by 41.5% and 36.4% respectively. By contrast, Edo and Delta posted the lowest increase with their allocations rising by 16.4% and 16.8%, respectively as shown in Fig 12.

Meanwhile, Lagos remained the largest recipient of Gross FAAC allocations in the first half of 2026, receiving ₦477.05 billion, while Nasarawa received the least at ₦72.78 billion. The composition of the top and bottom recipients changed slightly compared to H1 2025. Ondo entered the top 10 states by Gross FAAC allocation, replacing Edo, which dropped out of the top 10. At the lower end of the ranking, Ogun joined the bottom 10 states, while Zamfara moved out of the group as seen in figures 13 and 14.

Twenty of the 36 states received between ₦100bn to ₦300bn in gross FAAC allocation. Nine states received less than ₦100bn while Lagos, Delta, Rivers and Akwa Ibom each received over ₦300bn as shown in Fig 15.

Having More LGAs Does Not Necessarily Mean Higher FAAC Revenue

Although Kano has the highest number of LGAs (44), its combined gross FAAC allocation of ₦163.5 billion to its LGAs was only the second highest and was nearly half of the ₦310.85 billion received by the 20 LGAs of Lagos. Similarly, Rivers, with 23 LGAs, received a higher gross FAAC allocation to its LGAs than Oyo and Katsina, despite having 33 and 34 LGAs, respectively, as seen in Fig 16. This pattern appears recent, and is likely on account of the growing prominence of Value Added Tax (VAT) as a source of FAAC revenue. LGAs receive 35% of VAT revenue, and states with urban and commercial LGAs with a high level of consumption, like Lagos and Rivers, stand at an advantage, even with fewer number of LGAs.

Conclusion

The first half of 2026 marked a marginally better FAAC performance than the corresponding period of 2025, with higher gross FAAC revenue, a larger distributable pool, and lower deductions. But improved allocations alone may not translate to better development outcomes unless accompanied by more efficient spending across the three tiers of government. Equally important is the need to strengthen transparency and accountability mechanisms to ensure that public resources deliver measurable value for citizens. Therefore, as revenues improve, the emphasis should increasingly shift from the size of allocations to how effectively public resources are deployed to improve infrastructure, public services and the welfare of Nigerians.

By Hafsat Abubakar Bakari | It is an honour and privilege to be here at this triple-header event: the graduation of the second cohort of the Policy Writing Fellowship, and the official unveiling of the Local Governance Accountability (LGA) Portal and the Policy Registry.

By Ola Olukoyede | I am honoured by the invitation as Special Guest and the opportunity to give a goodwill message at this memorable occasion. It was not difficult putting aside my other engagements to be here, as I have come to appreciate Agora Policy as an extremely innovative and resourceful think tank committed to leaving a mark in our policymaking environment.

By Ayobami Ayorinde and Seyi Akinbodewa | Almost all the states in Nigeria have published their four quarterly budget implementation reports for the year 2025. This is commendable and needed, especially in a country where many citizens and civic groups clamour for fiscal transparency and accountability. The Federal Government, on the other hand, has lagged behind in meeting the same standard. The most recent quarterly budget implementation report released by the Federal Government covers Q2 2025. Yet, the Fiscal Responsibility Act (2007) requires all governments to publish a summary report of budget execution within 30 days of the end of each quarter. 

The State Fiscal Transparency, Accountability and Sustainability (SFTAS) programme (2018-2022), a performance-for-results programme initiated by the Federal Government but implemented by the World Bank, contributed to improving fiscal openness at the subnational level. Although the SFTAS programme ended four years ago, the continued release of quarterly budget implementation reports shows that the initiative has been largely sustained across states. This regular disclosure opens room for accountability and allows for residents and citizens to ask crucial and informed questions about how states generate and spend their revenues. 

The budget implementation reports of states for 2025 provide comprehensive information on the fiscal performance of 35 states in the course of the year. The report excludes Rivers State because the state did not publish any BIR for the year, possibly on account of the state of emergency in the state for six months in 2025. In this analysis, we examine revenue generation and expenditure patterns and assess their performance relative to final budget estimates.

Expenditure and Revenue of States

In 2025, 35 out of 36 states recorded a combined expenditure of ₦19.21 trillion. This is a 37% increase from the ₦14.05 trillion recorded in 2024. On the other hand, their total revenue amounted to ₦16.64 trillion in 2025, a 24% increase from ₦13.39 trillion in 2024, as seen in Fig 1. As a result, the budget deficit as a percentage of revenue increased from 4.9% in 2024 to 15.4% in 2025. This shows that even when revenue increased, the deficit also increased because states’ expenditure outpaced their income. 

As shown in Fig 2 below, Lagos generated the highest revenue in 2025 at ₦2.63 trillion, followed by Delta (₦1.45 trillion) and Akwa Ibom (₦1.11 trillion). At the lower end in terms of revenue were: Zamfara (₦204.9 billion), Kebbi (₦191.2 billion) and Nasarawa (₦188.6 billion). Notably, Lagos (₦2.84 trillion), Akwa Ibom (₦1.33 trillion), and Delta (₦1.15 trillion) also recorded the highest expenditure in 2025, as seen in Fig 3 below. On the other hand, Zamfara (₦254.4 billion), Kebbi (₦239.8 billion), and Taraba (₦195.5 billion) had the least spending for the year.

States' Budget Expenditure Performance

In 2025, 35 out of the 36 states combined achieved a budget implementation rate of 68.2%, just 1.8% lower than the rate achieved by all 36 states in 2024, as seen in Fig 4. Of the ₦19.21 trillion spent, a total of ₦11.87 trillion (62%) went to capital projects while ₦7.34 trillion (38%) went to recurrent costs as seen in Fig 5 below. When compared with the 58% and 42% that went to capital and recurrent expenditure, respectively in 2024, it shows that states are directing a larger share of their expenditure toward capital projects. This pattern is also reflected in the 2026 budget proposals, where 33 states allocated more than 50% of their budgets to capital spending.

For the 35 states reviewed, recurrent expenditure achieved an implementation rate of 79%, while capital expenditure was 62.9%, as shown in Fig 6. Anambra (80%), Enugu (79%), Abia (79%), Imo (78%), Akwa Ibom (77%) and Bayelsa (77%) recorded the highest capital spending in percentage terms while Plateau (67%), Kogi (66%), Osun (62%), Ekiti (62%), Taraba (61%) and Ondo (60%) led in recurrent expenditure as seen in Fig 7 below.

Out of the 34 states, six implemented less than half of their final budgets. The affected states are: Taraba (34%), Kebbi (41.3%), Abia (45.5%), Niger (47.1%), Plateau (47.5%) and Cross River (48.9%). However, the states that surpassed 80% implementation rate are Yobe (99.8%), Delta (97.2%), Ekiti (87.9%), Bauchi (85.6%), Lagos (84.3%), Osun (82.2%), Bayelsa (82%) and Akwa Ibom (80.6%) as seen in Fig 8 and 9. 

Taraba (20.1%), Plateau (26.2%), Kebbi (34.6%), Kwara (37.7%), Cross River (38.2%), Niger (39.4%), Adamawa (39.8%), Abia (46%), Ebonyi (46.3%), Ogun (47%) and Ondo (49.3%) implemented less than half of their capital budgets. Meanwhile, Yobe (106.4%), Delta (99.9%), Lagos (85.6%), Akwa Ibom (83.9%), and Bayelsa (82.4%) each recorded over 80% in capital budget implementation as shown in Fig 10 and 11 below.

On the other hand, 18 states recorded recurrent expenditure implementation rates above 80%, while Abia was the only state that failed to reach 50% as seen in Fig 12 and 13.

States’ Budget Revenue Performance  

In 2025, 35 out of the 36 states combined achieved 88.4% of their total projected revenue as seen in Fig 14, unlike 2024 where 36 states combined recorded a 5% revenue increase above budgeted figures due to higher FAAC allocations. The shortfall in 2025 can be attributed to some states setting overly ambitious revenue projections for the year, possibly based on the 2024 outturn. Out of the ₦16.64 trillion in actual revenue in 2025, ₦12.40 trillion (75%) was from FAAC, while ₦4.24 trillion (25%) was through IGR, as shown in Fig 15.

The reviewed states received 91.6% of their total projected FAAC revenue in 2025, as seen in Fig 16 below, while their combined IGR fell short by 21% compared to projections.

Lagos (₦2.6 trillion), Delta (₦1.5 trillion), Akwa Ibom (₦1.1 trillion), Bayelsa (₦976.9 billion), Enugu (₦665.9 billion) Edo (₦511.2 billion), Kano (₦486.8 billion), Oyo (₦467.9 billion), Ogun (₦436.5 billion) and Anambra (₦390.3 billion) are the states with the highest revenue in 2025 as shown in Fig 17. The zonal distribution of the Top 10 states in terms of revenue is as follows: South South (four), South West (three), South East (two) and North West (one). Nine of these states are from the South, while only Kano is from the North. On the flip side, Nasarawa (₦188.6 billion), Kebbi (₦191.2 billion), Zamfara (₦204.9 billion), Ebonyi (₦234.9 billion), Adamawa (₦235.5 billion), Taraba (₦249.3 billion), Yobe (₦262.2 billion), Gombe (₦264.9 billion), Ekiti (₦275.6 billion) and Plateau (₦289 billion) are the states with the lowest revenue generated as shown in Fig 18. Among the 10 states at the lower end, eight are from the North, while two (Ebonyi and Ekiti) are from the South. 

IGR accounted for over half of total revenue in Lagos (70%), Enugu (61%) and Ogun (54%), while states like Bayelsa (5%), Yobe (6%), and Sokoto (7%) recorded less than 10% of their revenue from IGR, as seen in Fig 19 below.

Lagos recorded by far the highest IGR in 2025 at ₦1.85 trillion, more than the other top nine states combined. On the flip side, Yobe (₦15.4 billion), Taraba (₦17.9 billion) and Kebbi (₦18.4 billion) recorded the least, as shown in Fig 20 and 21 below.

Delta (₦1.24 trillion), Akwa Ibom (₦1.02 trillion) and Bayelsa (₦924.7 billion) received the highest revenue from FAAC, while Nasarawa (₦149.2 billion), Kebbi (₦172.8 billion) and Zamfara (₦174.8 billion) got the lowest, as seen in Fig 22 and 23 below

In 2025, Delta (133.3%), Ondo (119.9%), Plateau (119.1%), Imo (112.9%), Ekiti (112%), Anambra (102.8%) and Yobe (102%) recorded revenues (FAAC and IGR) exceeding their budget projections, while 27 states fell short of their targets as seen in Fig 24 and 25 below

Out of the 35 states, Plateau (135.6%), Delta (131.1%), Lagos (125%), Ondo (122%), Abia (117.6%), Imo (116.8%), Ekiti (113.1%), Enugu (112.5%), Sokoto (109%), Jigawa (108.5%), Anambra (105.1%), Osun (102.5%) and Yobe (101.7%) received more FAAC revenue than budgeted, while 22 states recorded lower-than-projected FAAC allocations as seen in Fig 26 and 27 below. 

Eight states – Delta (148.4%), Borno (118.9%), Gombe (111%), Ondo (107.8%), Ekiti (107.7%), Yobe (105.9%), Kogi (104.4%) and Kwara (103.5%) generated more IGR than projected in their budgets, while 26 fell short of their IGR targets as shown in Fig 28 and 29 below.

Conclusion and Recommendations

The figures from the report show that states’ revenue and expenditure grew in 2025 compared to 2024 by 24% and 37% respectively. The average budget implementation rate of 68% also shows that about a third of planned spending did not happen. Recurrent spending implementation across the states however, is high, with 18 states recording implementation rates above 80%. This is evidenced by the fact that only 11 states implemented less than half of their capital budgets. The stronger performance of recurrent spending relative to capital expenditure means that states still always have to pay salaries and fund operational costs as at when due. While capital projects are essential for long-term development, recurrent expenditure, which covers operational costs and workers’ salaries, particularly in critical sectors such as education and health, is equally important. If states are able to significantly expand their revenue bases in the coming years, they will have more fiscal space to invest more in capital projects. This is very relevant given that about 90% of states budgeted more for capital expenditure than for recurrent spending in their 2026 budgets. This is where realistic forecasting comes into play. States need to strengthen the basis of their budget projections to ensure that revenue and expenditure estimates are achievable. Without credible assumptions behind projections, states may continue to fall short of their budget targets. 

With states becoming more consistent in disclosing their fiscal data, this should encourage citizens, Civil Society Organisations (CSOs) and the media to ask questions and demand accountability on how money is spent and what it is spent on at the sub-national level. Beyond the size of spending, the quality of spending is equally important. High budget implementation rates are commendable, but ensuring that funds are used efficiently and deliver meaningful outcomes should remain a priority. Therefore, strengthening revenue generation and improving fiscal discipline will be essential to ensuring that public spending translates into tangible socio-economic benefits for citizens.

By Adebayo Ahmed | On the 28^th of February 2026, the war between USA/Israel and Iran broke out, with immediate devastating consequences for people living in Iran and the rest of the Middle East. But the crisis is also having rippling effects across the world, including in Nigeria. The reasons are copious. First, Iran is a significant producer of crude oil and natural gas.

Twenty-five Nigerians have been selected to participate in the second cohort of the Agora Policy Writing Fellowship, which is organised with the support of the MacArthur Foundation and designed to strengthen policy writing skills and deepen data-driven policy engagement in Nigeria.

By Samuel Ajayi | On 7^th December 2025, news broke of an attempted coup in neighbouring Republic of Benin, which President Patrice Talon later announced had been foiled. Some of the online reactions to the attempted coup highlighted a disturbing rise in sympathy for military regimes across West Africa. Though Nigeria has been a democracy since 1999, the wider Sahel is seeing a "coup contagion," fuelled by the unfounded belief that democratic governments cannot guarantee security or economic stability.^{[1] [2] [3]}

By Ayobami Ayorinde, Maryam Ibrahim and Seyi Akinbodewa  | Internally Generated Revenue (IGR) remains a critical indicator of the fiscal sustainability and economic independence for subnational governments. It shows how well each state can raise funds on its own beyond what it receives from the federation pool and how that capacity continues to change over time.