State governors across Nigeria are under growing pressure from labour unions, civil society groups and opposition parties following revelations that states received nearly ₦9tn in Federation Account Allocation Committee (FAAC) inflows in 2025, with little visible improvement in citizens’ welfare.
An analysis of Federation Account disbursement data compiled from National Bureau of Statistics figures shows that direct FAAC allocations to states rose by over ₦2tn year-on-year, highlighting one of the largest revenue windfalls to subnational governments in recent history.
Despite the surge, critics argue that increased inflows have not translated into better education, healthcare, infrastructure or living standards.
States’ FAAC Inflows Jump Sharply
Data show that state governments received ₦7.315tn from FAAC in 2025, compared to ₦5.186tn in 2024, representing a 41% increase.
When the constitutionally mandated 13% derivation revenue is included, total inflows attributable to states rose to ₦8.934tn (about ₦9tn) in 2025, up from ₦6.533tn the previous year.
Overall FAAC distributions to all three tiers of government climbed from ₦15.259tn in 2024 to ₦21.897tn in 2025, with states capturing a significant share of the increase.
Monthly Allocations Hit Record Levels
Monthly FAAC disbursements to states remained consistently higher throughout 2025, peaking at ₦727.17bn in October, compared to a 2024 peak of ₦549.79bn.
By mid-year, states had already received ₦3.32tn, easing liquidity pressures for wage payments and debt servicing, especially in fiscally stressed states.
Derivation payments also rose sharply, climbing to ₦1.619tn in 2025, up from ₦1.347tn in 2024.
Labour, CSOs Slam Poor Impact
The Nigeria Labour Congress (NLC) warned that higher FAAC inflows have failed to improve welfare due to weak governance and corruption.
“Very few states are doing well in terms of how they deploy what they receive,” said NLC Assistant Secretary-General Onyeka Christopher.
“For FAAC to truly benefit the people, the issue of kleptocracy must be addressed.”
Civil society groups echoed similar concerns.
Chairman of the Centre for Accountability and Open Leadership, Debo Adeniran, said rising allocations have merely expanded governors’ financial latitude without benefiting citizens.
“The increase in allocations has not percolated to the people who are supposed to be the final beneficiaries,” he said.
CISLAC Executive Director Auwal Musa Rafsanjani added that there was little verifiable evidence of improved outcomes in healthcare, electricity or agriculture.
Economists Warn of FAAC Dependency
Economists caution that rising FAAC inflows are deepening states’ dependence on volatile federal revenue.
According to the BudgIT State of States Report, over 30 states rely on FAAC for more than 60% of their recurrent revenue, with 31 states depending on it for at least 80%.
Dr Ayodeji Ebo of Optimus by Afrinvest warned that reliance on FAAC discourages innovation and fiscal discipline.
“These revenues are volatile and largely outside state control, making budgets vulnerable to oil price shocks,” he said.
Opposition Parties Raise Alarm
Opposition parties across several states accused governors of prioritising politics, beautification projects and white-elephant spending over social services.
In states including Lagos, Sokoto, Plateau, Bauchi, Zamfara and Kebbi, opposition leaders said rising allocations had failed to curb inflation, unemployment, poor healthcare and decaying schools.
However, ruling parties in some states pushed back, citing infrastructure projects, salary payments and social investment programmes as evidence of progress.
Calls for Accountability Grow
Analysts and civil society actors are now calling for stronger transparency, incentive-based fiscal reforms and closer monitoring of FAAC utilisation.
Development economist Dr Aliyu Ilias suggested introducing counterpart funding mechanisms to reward states that grow internally generated revenue.
“While FAAC allocations are at unprecedented levels, they are not necessarily translating into improved living standards,” he said.
