Nigeria’s three tiers of government received a total of N10.45tn from the Federation Account Allocation Committee (FAAC) between January and May 2026, marking a 25.85 per cent increase compared to the N8.30tn shared in the same period of 2025.
The figures, based on an analysis of FAAC data, show that the revenue was distributed among the Federal Government, 36 state governments, the Federal Capital Territory, and 774 local government areas from a gross federation revenue of N13.76tn, which also rose slightly from N13.19tn recorded in the corresponding period of 2025.
The growth in allocations was driven by improved Value Added Tax collections, stronger oil-related tax receipts, and intensified revenue mobilisation efforts by the Nigeria Revenue Service.
A breakdown shows that the Federal Government received N3.72tn, states got N3.56tn, local governments received N2.51tn, while oil-producing states shared N673.17bn as derivation revenue during the five-month period.
Monthly allocations also increased overall, rising from N1.96tn in January to N2.30tn in May, despite minor fluctuations in February and March before stronger gains in April and May.
Compared to 2025, each month recorded significant year-on-year increases, with April and May showing the strongest growth, reflecting improved revenue performance across the period.
Gross revenue also rose steadily, peaking at N3.40tn in May after dipping in February, before recovering strongly in the following months.
Despite the increase in federal allocations, reactions from stakeholders suggest that the higher revenue has not translated into improved living conditions for many Nigerians.
The Nigeria Labour Congress said the increased inflows have had little visible impact on citizens, blaming poor leadership priorities and weak governance outcomes across all levels of government. It argued that infrastructure decay, rising insecurity, and worsening living standards remain major challenges despite higher revenues.
The NLC further stressed that insecurity continues to undermine economic activity, especially in farming and movement, while also increasing financial burdens such as ransom payments.
On his part, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, noted that while some states have used increased revenues for impactful projects like agriculture support, healthcare, and transport systems, many others still prioritise projects with limited direct benefits to citizens’ welfare.
He warned that rising revenues must translate into improved livelihoods to avoid widening inequality and persistent poverty.
The report also highlighted changes introduced by new tax reforms, including a revised VAT sharing formula that increased states’ share while reducing that of the Federal Government.
Despite higher allocations, revenue performance remains below expectations, with the Nigeria Revenue Service recording a shortfall against its first-quarter target for 2026.
Authorities have since intensified tax compliance enforcement, warning that unremitted revenues by government institutions could be deducted directly from future FAAC allocations.
