The 36 states of the federation shared a total of N4.1 trillion from the Federation Account Allocation Committee (FAAC) in the first half of 2025, even as questions persist over the lack of tangible development across many of them despite the increased inflow of funds since the removal of petrol subsidy.
This is as Labour groups and finance experts faulted state governments on low development projects, despite increased FAAC, especially, in the last two years.
Experts who spoke to LEADERSHIP Weekend yesterday pointed to low or lack of monitoring mechanism to actually know what states do with the money they receive from the federal government.
A detailed analysis of official documents obtained by LEADERSHIP revealed that the South-South geopolitical zone emerged the top recipient, receiving N1.04 trillion from January to June 2025. It was followed by the South West, which received N772.3 billion, while the North West came third with N563.6 billion.
On the lower end, the North Central zone, comprising six states and the Federal Capital Territory (FCT), received N484.4 billion; the North East took N480.7 billion, while the South East collected N427.7 billion in the same six-month period.
The allocations, which are disbursed monthly, represent 26.72 per cent of the total distributable revenue from the federation account to state governments.
Despite the volume of funds, many states are still struggling with outstanding salaries and pensions, massive infrastructure gaps, heavy debt profiles and increasing poverty levels, raising concerns over fiscal responsibility and impact at the grassroots.
In January 2025, the states shared a total of N611.97 billion, followed by N718.98 billion in February. The distribution dropped slightly in March to N698.24 billion, before slowing again to N663.06 billion in April, partly due to a brief shock in global oil prices due to crisis in the Middle East. In May, the amount surged to N709.29 billion, before sliding slightly to N701.92 billion in June.
The Federal Capital Territory Administration (FCTA), though not a state, received N222.37 billion in March alone as its allocation from the federation account.
A closer look at state-by-state breakdown shows that Lagos State was the highest individual recipient during the six-month period, collecting N334.35 billion from the federation account. It was trailed by Delta State with N316.26 billion, while Rivers State got N301.17 billion. Other top beneficiaries include Bayelsa with N240.44 billion and Akwa Ibom, which received N240.35 billion.
Kano State led the North with a gross allocation of N130.56 billion, while Oyo State received N113.74 billion. Kaduna State followed with N102.31 billion, Edo got N102.20 billion, Imo received N99.57 billion, and Katsina took N98 billion. Others include Ondo with N96.74 billion, Anambra with N94.07 billion, and Borno, which received N90.75 billion.
In the middle range, Bauchi State received N91.30 billion, Jigawa got N88.13 billion, Niger took N89.67 billion, Abia had N85.21 billion, Sokoto received N84.61 billion, Plateau got N80.14 billion, Kogi received N82.80 billion, Benue got N88.26 billion, and Kebbi received N79.95 billion in the first half of the year.
Other notable allocations include: Ogun State: N79.49 billion, Adamawa: N79.14 billion, Enugu: N78.39 billion, Zamfara: N77.99 billion, Osun: N76.35 billion, Cross River: N76.31 billion, Yobe: N74.54 billion, Kwara: N73.33 billion, Gombe: N72.42 billion, Taraba: N72.54 billion, Ekiti: N71.62 billion, Ebonyi: N70.50 billion, and Nasarawa: N70.02 billion.
While states continue to draw from the federation account, their internally generated revenues (IGRs) remain highly uneven. According to projections, Lagos State is expected to generate N1.97 trillion in IGR alone for the year, significantly dwarfing other states. Rivers State and the FCT also rank high in IGR expectations.
Conversely, states such as Kebbi, Taraba, and Yobe are projected to record the lowest IGRs, placing greater dependence on federal allocations to fund their budgets.
Despite these inflows from FAAC and other sources such as donor support, loans, and internally generated revenues, the realities on the ground across many states remain stark. Reports of unpaid public worker salaries, poorly funded infrastructure, and rising poverty suggest a disconnect between allocation and actual service delivery.
With rising oil prices contributing to federation revenues and allocation levels, fiscal observers say it is critical for states to improve transparency and accountability in the management of public funds to ensure meaningful development reaches the grassroots.
Reacting to the development, economic policy analyst, Dr. Justine Amase, said the federal allocation to the sub-nationals” has not impacted” on Nigerians in their respective states pointing to the high poverty and unemployment and infrastructure deficit.
The former commissioner in Benue State said finances of the state were mostly poorly deployed, stating what he described as a culture of lack of accountability across the states.
He opined that the fragile framework of accountability, weak accountability and poor oversight of the states’ assembly legislatures had made matters worse for Nigerians, especially those in the local areas.
“You need an actual independence of the state assemblies with a constitutional guarantee to free them away from the manipulations of the state governors for democracy and accountability to be seen at that level,” Dr Amase stated in an interview with this reporter.
The experts who spoke with this newspaper on the issue generally agreed that accountability, transparency and oversight were virtually non-existent in the states.” There is no optimal utilization of those resources,” economic analyst, Staphen Kanabe, stated.
However, the failure is not state wide. A few of the states have done well to create definite landmark through projects and programmes that can be pointed to as outcome of the revenues from the national government.
An analysis of the operationality of the states showed that most times, most of the states don’t have budget for windfall or how to utilise such higher allocations that come with occasional increase in the prices of oil at the international market.
“There should be a plan on ground to monitor the use of state resources,” says Kanabe who suggested that the federation should find a way to entrench transparency and accountability in public finance management at the sun-nationals.
Some of the experts say there is a need to amend with the federal constitution to ensure proper monitoring of states on the deployment of resources.
Not a few people agreed that the structure of the state assemblies are not working. “A proper framework must be developed in conjunction with the national government for the state assemblies to work for Nigerians,” Dr. Amase stated.
Financial economist at Rivers State University, and member of the Board of Economists, NATIONAL ECONOMY, Dr. Nenye Kocha, cited that there are fundamental issues with Nigeria’s fiscal policies that do not put a lid on the expenditure spree practiced by most state governors. He also stated that the naira is less powerful now due to inflationary pressures. “This affects the purchasing power of individuals as well as the costs of infrastructural development considering the fact that most of the building inputs are imported. It is expensive to buy forex, the currencies that most of the building inputs are bought in. Know that many of the contractors doing these projects are also paid in foreign currencies,” he said.
The president, National Union of Food, Beverage and Tobacco Employees (NUFBTE), Comrade Garba Ibrahim, identified lack of accountability by EFCC, ICPC on state governments as reason why most state governments are not utilising the federal allocation judiciously.
“The lack of enforcement and monitoring which includes icpc efcc and so on make some states allocation being diverted by the governor of the affected states.”
Ibrahim however said states like Kano were utilising the allocation as appropriate while some are not.
Also the president of National Union of Market Traders Employers of Nigeria (NUMTEN) Comrade James Ogu agreed that after the removal of fuel subsidy, federal allocation going to respective states had tremendously increased, but some of the state had been using the allocation judiciously for public good, which had translated to even development across the strata of the state, but many of the state governments had gone to sleep, without translating the huge allocations to meaningful development.
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