…earn N41.85trillion in 33 months
•Nominal development in income deceptive — Economists
By Clifford Ndujihe, Nkiru Nnorom, Nnamdi Ojiego and Dickson Omobola
ARGUABLY, the three tiers of presidency, particularly the states and native governments in Nigeria, have been seeing a quantum leap of their federal allocations since June 2023.
This however, extra Nigerians are groaning in ache inflicted on them by the hostile financial state of affairs within the nation.
With more cash obtainable for sharing, the surge in revealed month-to-month allocations from the Federation Account Allocation Committee, FAAC, displays the affect of latest fiscal and financial reforms, buoyant oil receipts propelled by the floating of the Naira and stoppage of oil subsidies.
From N8.209 trillion shared among the many three tiers of presidency in 2022, the determine rose to N10.23 trillion in 2023, jumped to N15.26 trillion in 2024, and hit N16.446 trillion between January and September 2025.
In essence, the three tiers of presidency have shared N41.848 trillion in 33 months – January 2023 to September 2025.
Certainly, from N3.58 trillion in 2023, states’ allocations jumped to N5.81 trillion in 2024.
The rising allocations have continued in 2025, with states receiving N6.709 trillion between January and September. Inside the interval, the Federal Authorities bought N5.656 trillion whereas the Native Governments acquired N4.041 trillion.
However the precise worth of the receipts is a topic of controversy amongst economists who say whereas the funds look large, there could also be nothing to have a good time as the price has dropped a number of occasions over resulting from inflation occasioned by value will increase because of the removing of petrol subsidy and the crash of the Naira because of the unification of the FX regimes.
“Authorities on the varied ranges could also be seen in some quarters as smiling to the financial institution with the rise within the funds accruing to them. However the actuality of the state of affairs is that the worth of the cash has depreciated since 2023”, one of many economists stated
A NEITI FAAC Quarterly Evaluation exhibits that distribution to state governments in 2024 recorded a share improve of 62% from N3.58 trillion in 2023, adopted by native authorities councils with a 47% improve, whereas the Federal Authorities’s share rose by 24% from N3.99 trillion in 2023 to N4.95 trillion in 2024.
The report highlights that whole FAAC allocations elevated by 66.2% from N9.18 trillion in 2022 to N10.9 trillion in 2023 and N15.26 trillion in 2024.
Amplifying the massive receipts, Minister of Price range and Financial Planning, Senator Abubakar Bagudu, just lately stated allocation to 36 states and 774 native councils elevated from N458.81 billion in Could 2023 to N991.81 billion in June 2025, a rise of N533bn or 116.17 per cent.
He spoke at a session organised by the Sir Ahmadu Bello Memorial Basis, SABMF, in Kaduna. Bagudu careworn that the determine excluded Digital Cash Switch, EMT, levy, FX positive aspects, and augmentations acquired by states.
Extra funds, extra pains
The spiked revenues got here with large pains.
President Bola Tinubu’s stoppage of gas subsidies and the floating of the naira as he was being sworn-in on Could 29, 2023 had quick socio-economic affect.
The alternate fee of the naira to greenback at a stage hit N1, 900 and gas value rose from N197 per litre to between N1, 000 and N1, 200 in varied elements of the nation. Inflation fee rose steadily from 22.41 per cent and hit 34.80 % in December 2024.
Greater than two years after, little or no enhancements have been witnessed given the massive funds accruing to the states and native councils.
In 2023, no fewer than 93.8 million Nigerians (43 per cent) had been stated to be residing beneath the poverty line, and the determine has reportedly jumped to 139 million (61 per cent).
The Nationwide Bureau of Statistics, NBS, in its November 2022 Nationwide Multidimensional Poverty Index, MPI, stated 133 million Nigerians or 83 per cent of the inhabitants had been multi-dimensionally poor.
The Nationwide Inhabitants Fee, NPC, put Nigeria’s estimated inhabitants in 2023 at 216 million.
The NBS is but to launch its knowledge for 2025 however, as of April, the World Financial institution reported that 46 per cent of Nigerians had been residing beneath the NBS nationwide poverty line of N376.50 per particular person each day.
The Worldometer, as of October 19, 2025, put Nigeria’s inhabitants at 238.9 million.
Meaning 109.89million Nigerians are presently residing on N376.50 per particular person a day.
The annual headline inflation surged to 34.80 per cent in December 2024.
In January 2025, the NBS up to date the bottom yr for its Client Worth Index from 2009 to 2024, which resulted in a recalibration of the inflation fee to 24.48 per cent.
Thereafter, the speed has been declining, in accordance with the NBS, hitting 18.02 per cent in September 2025.
Moist the grass, Tinubu duties governors
Disturbed by the persistent cries of hardship and affected by the citizenry, President Tinubu, just lately urged state governors to justify the unprecedented fiscal influx with seen growth outcomes.
The President, who spoke on the Nationwide Govt Committee, NEC, assembly of the All Progressives Congress, APC, charged the governors elected on the platform of the APC to redouble their efforts in delivering growth on the grassroots, saying many Nigerians had been nonetheless dissatisfied with the tempo of governance and the advantages of democracy.
His phrases: “We have to do extra. Nigerians are nonetheless complaining on the grassroots. You, the governors, should moist the bottom and provides extra dividends of democracy on the grassroots. “We should not relaxation. Our individuals must really feel the affect of presidency extra instantly.”
Nominal development in income deceptive —Muda Yusuf
In the meantime, a high economist, Muda Yusuf, stated though nominal development income was deceptive, states may execute extra programmes with higher deployment of funds.
“States now have extra income to execute their programmes corresponding to bettering infrastructure, paying salaries and pensioners,” the CEO of the Centre for Promotion of Personal Enterprises, CPPE, added.
Nevertheless, he raised the query of how properly the revenues are being deployed to drive significant growth, averring that states must be publishing their accounts for transparency.
Yusuf famous that poor administration of sources by the states has resulted in little or no affect on the lives of the individuals, cautioning towards overestimating the expansion of the revenues by the states.
“The truth that income has grown in nominal phrases doesn’t imply they will purchase a lot. The nominal development may be deceptive. It creates an phantasm that the states are getting richer, so we should issue this into our expectations,” he acknowledged.
‘Nothing to have a good time’
For his half, Chief Economist at ARKK Economics & Knowledge Restricted, Dr Samson Simon, stated: “Allocations to states greater than doubled in 2024 in comparison with 2023. It rose from N11.38 trillion to N5.4 trillion in 2023.
“This may appear a lot in only a yr.
“Nevertheless, it’s mere nominal improve. In actual phrases, it’s not a rise.
“If you regulate for inflation and alternate fee, you’d realise the allocation has truly diminished, therefore nothing to have a good time.
“Even authorities on the centre is gasping for breath when its personal FAAC allocation has ballooned, therefore binge borrowing. This demonstrates actual improve is what issues.
“Governors can do higher by guaranteeing allocation effectivity and getting their priorities proper as sources are nonetheless very a lot meager relative to wants. “Governors ought to put first tasks that profit the biggest elements of their inhabitants by reworking healthcare, training, infrastructure and social welfare.
“Spending and allocation to completely different finances line gadgets have to be clear, accounted for and made essentially the most of.
“States should not rely on FAAC allocation to get issues accomplished for the individuals.
“As an alternative, they need to resort to incomes their hold and impacting lives of individuals on their watch.”
‘Financial misery’
Additionally reacting, Chairman of the Alliance for Financial Analysis and Ethics Ltd/Gte, Hon. Dele Oye, cautioned towards celebrating the surge in authorities income recorded throughout the three tiers of presidency over the previous 33 months, stressing that the accompanying financial misery dealing with Nigerians requires sober reflection relatively than reward.
Oye famous that whereas Nigeria’s earnings have grown considerably resulting from reforms corresponding to gas subsidy removing and overseas alternate liberalization, the positive aspects have come at a steep social price.
He cited the World Financial institution’s knowledge indicating that over 139 million Nigerians now dwell in poverty, describing the determine as a stark reminder of the widening hole between fiscal efficiency and residents’ welfare.
He noticed that the insurance policies, although yielding extra income, triggered inflationary pressures, forex depreciation, and the exit of a number of multinational corporations, resulting in enterprise closures and job losses.
In accordance with him, “the financial context stays troubling, with inflation presently at 18.2 % and thousands and thousands of households struggling to afford primary wants.”
The previous President of the Nigerian Affiliation of Chambers of Commerce, Business, Mines and Agriculture (NACCIMA) urged the federal and state governments to concentrate on inclusive financial insurance policies that stimulate manufacturing, create jobs, and improve residing requirements relatively than relying solely on fiscal reforms.
He advisable that a part of the income windfall be used to scale back authorities borrowing and settle excellent loans and bonds, which, if correctly managed with assist from the Central Financial institution of Nigeria, may decrease rates of interest and strengthen credit score availability to companies.
Oye additionally emphasised the necessity for transparency in social welfare interventions, calling for impartial verification of the federal government’s declare that 8.5 million Nigerians profit from ongoing money switch packages. “Focused and verifiable social safety measures are essential to cushioning the results of those reforms on essentially the most susceptible residents,” he stated sustaining that with prudent useful resource allocation, funding in infrastructure, and efficient oversight, Nigeria may flip its present fiscal momentum into real financial progress that advantages abnormal residents relatively than deepening inequality.
Social items nonetheless elusive regardless of large allocations — Adonri
Including his voice, Mr. David Adonri, Vice Chairman, Highcap Securities, lamented that the federal government in any respect ranges have did not leverage the rise in FAAC allocations to ship social items to the individuals.
He argued that excluding Abia State authorities which had judiciously utilized the funds from income allocations for developmental functions, different states have failed on this regard.
“Sequel to the removing of gas subsidy and floating of the Naira in 2023, accretion to the consolidated income account of presidency elevated tremendously. Consequently, the statutory distribution to the assorted tiers of presidency additionally elevated”, Adonri stated.
“This enabled a number of state governments to extinguish their brief time period liabilities which strangulated them hitherto.
“The steadiness left is what has been deployed to finance recurrent and capital expenditures. Whether or not the appliance of those revenues are geared in the direction of alleviation of hardship is a query that’s begging for solutions.
“A state like Abia has confirmed to be a great instance within the environment friendly utilization of sources”.
Persevering with, he stated: “The effectivity within the administration of the allocations by the states and LGA is significantly doubtful because the social items they’re anticipated to offer stays largely elusive.
“The obligation of presidency is to make macroeconomic insurance policies that may make the setting conducive for wealth creation and era of productive employment. “Additionally they present the mandatory social items from software of their monetary sources to reinforce the well-being of their residents.
“Nevertheless, the state of affairs on floor doesn’t present that these governments are successfully discharging these tasks.”
There’s want for improved fiscal self-discipline — Chiazor
In his submission, Victor Chiazor, Head of Reseach at FSL Securities, stated that the truth that financial hardship remained prevalent regardless of the massive receipt from allocations was regarding and highlights the necessity for improved fiscal self-discipline by all tiers of presidency.
He stated: “Since President Tinubu assumed workplace, vital coverage reforms have been designed and carried out, together with the removing of gas subsidies, alternate fee changes and the brand new tax coverage anticipated to quickly go dwell.
“These reforms, coupled with elevated VAT income assortment efforts, have elevated authorities income additionally pushed by the devaluation of the naira.
“In accordance with the August 2025 FAAC communiqué, the income contribution was Statutory Income (80%), Worth Added Tax (17.96%), Alternate Achieve (1.04%), and Digital Cash Switch Levy (1.02%).
“Regardless of the rise in income, financial hardship persists, as inflation and devaluation has weakened the buying energy of the naira.
“This now raises considerations over the actual worth of the naira and lack of efficient fund utilization and prudent monetary administration amongst all tiers of presidency.
“Along with this, some states are confronted with excessive debt burdens, underscoring the necessity for improved fiscal self-discipline, channeling funds to productive sectors, and adopting a clear and accountable course of to construct belief and environment friendly fund utilization.”
States extra financially buoyant now – Oyebanji
Talking on the elevated allocation to states, Governor Biodun Oyebanji of Ekiti State thanked Tinubu for releasing extra sources to the states, particularly Ekiti, to hold out people-oriented and legacy tasks within the final three years of his administration.
Oyebanji, who spoke in the course of the commissioning of the ultra-modern Ekiti Income Home in Ado Ekiti, penultimate Wednesday, disclosed that his administration had been commissioning a variety of tasks together with roads, electrical energy, hospitals and water to commemorate his third anniversary in workplace.
Oyebanji disclosed that his authorities has not taken any mortgage to finance the assorted tasks embarked upon by his authorities within the final three years, stated that his administration is dedicated to sustaining the state’s growth targets stressing that IRS performs pivotal position in propelling the state’s financial development and contributing massively to the well-being of its residents.
His phrases: “I can stand right here to boast and beat my chest that each undertaking we’ve accomplished in Ekiti state to this point, we’ve not taken a mortgage to do any considered one of them. And that speaks to the truth that we’ve a president who’s clear, who permits the sources to be shared the best way it ought to be shared.
“One factor is so that you can have the cash on the centre, one other factor is for the centre to offer it to you, however for as soon as, in our historical past, Mr. President has given to us greater than our justifiable share of the federation allocation.”
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