Nigeria’s 36 state governors are coming under increasing pressure to explain how the substantial rise in Federation Account Allocation Committee (FAAC) revenue has been utilised, amid growing concerns that the increase in government receipts has not translated into a corresponding improvement in the lives of citizens.
Data from the Federal Ministry of Finance show that the Federal Government, the 36 states and 774 local government areas shared approximately ₦93.13tn from the Federation Account between 2017 and 2025. Remarkably, more than half of that amount—about ₦47.25tn—was distributed in just three years, from 2023 to 2025.
The sharp increase followed major economic reforms introduced by the Federal Government in 2023, particularly the removal of the petrol subsidy and changes to the foreign exchange regime. Efforts to improve revenue collection and remittances also contributed to the rise in distributable revenue.
However, the surge in government revenue has generated a fresh debate about accountability and public spending. Critics argue that Nigerians continue to experience high living costs, unemployment, insecurity and inadequate public services despite the substantially larger amounts available to governments.
FAAC distributions increased from ₦5.64tn in 2017 to a record ₦21.90tn in 2025, representing an increase of about 288 per cent over the period. Revenue growth was relatively modest before 2023, but accelerated considerably after the reforms.
Between 2017 and 2022, total FAAC distributions amounted to approximately ₦45.88tn. By comparison, the three years from 2023 to 2025 generated ₦47.25tn. In other words, the country distributed more federation revenue in three years than it did in the preceding six years combined.
The annual figures illustrate the scale of the increase. FAAC distributions stood at ₦5.64tn in 2017, rising to ₦7.98tn in 2018. The amount then declined to ₦7.85tn in 2019 and ₦7.11tn in 2020, largely reflecting economic and oil-market disruptions. Revenue recovered to ₦8.12tn in 2021 and ₦9.18tn in 2022.
Following the reforms, allocations rose to ₦10.09tn in 2023, ₦15.26tn in 2024 and ₦21.90tn in 2025. The average annual growth rate consequently accelerated significantly compared with the pre-reform period.
States have been among the biggest beneficiaries of the increase. Their FAAC allocation rose from ₦4.18tn in 2023 to ₦6.53tn in 2024 and then to ₦8.93tn in 2025. Over the same period, local governments also experienced substantial increases in their allocations.
The Federal Ministry of Finance said the higher receipts had provided states and local governments with additional resources to meet obligations such as salaries, pensions, infrastructure and other responsibilities.
According to the ministry, states received approximately ₦9.17tn in additional allocations between June 2023 and December 2025 when compared with the monthly revenue run rate before the removal of the petrol subsidy. Local governments received an estimated additional ₦6.66tn during the same period.
Despite the increase, analysts argue that the real impact of the additional funds remains questionable.
Policy analysts have called on state governments to demonstrate how the additional resources have improved healthcare, education, water supply, roads, transportation, agriculture, employment and other essential services.
They also warned against excessive spending on projects that offer limited economic or social returns. Some analysts specifically questioned the decision by certain states to invest in ventures such as airlines, arguing that such businesses could become a continuing drain on public finances.
The concern is particularly significant because the increase in FAAC receipts should not be interpreted entirely as an increase in real purchasing power. The depreciation of the naira has played an important role in inflating the naira value of government revenues.
For example, FAAC distributions amounted to approximately ₦7.98tn in 2018. At the exchange rate applicable at the time, this represented roughly $26bn. By 2025, FAAC had risen to ₦21.90tn, but its dollar equivalent was estimated at only about $14.4bn.
This means that although the nominal naira value of FAAC increased dramatically, its dollar value actually declined. The figures therefore demonstrate the combined effect of higher revenue flows, economic reforms and significant currency depreciation.
Nevertheless, the additional resources available to subnational governments remain substantial, and the increased allocations have intensified demands for greater transparency.
Analysts say governors should provide clearer information about how the funds are being spent and what measurable benefits their investments are producing. Citizens, civil society organisations and other stakeholders have also been urged to strengthen monitoring of state and local government finances.
The debate is ultimately shifting from the size of FAAC allocations to the quality of public expenditure. Higher revenue, by itself, does not guarantee better living standards. What matters is whether the additional funds are converted into productive investments and reliable public services.
For many Nigerians, the key question is therefore no longer simply how much money governments receive each month. It is whether the billions of naira being distributed are improving roads, hospitals, schools, water systems, security, employment opportunities and economic conditions across the country.
The post-subsidy period has undoubtedly transformed the revenue position of Nigeria’s three tiers of government. But the sustainability and success of the reforms will increasingly be judged by their tangible impact on ordinary citizens.
As allocations continue to rise, governors will face greater pressure to demonstrate that the additional public resources are being used responsibly, transparently and in ways that deliver measurable improvements in the lives of the people they govern.