Nigeria’s three tiers of government shared a total of N10.45tn from the Federation Account Allocation Committee (FAAC) between January and May 2026, representing a 25.85 per cent increase from the N8.30tn distributed during the corresponding period in 2025.
An analysis of FAAC data showed that the allocations were drawn from a gross government revenue of N13.76tn realised in the first five months of 2026, an increase of 4.32 per cent compared to the N13.19tn recorded in the same period last year.
The rise in distributable revenue was driven by improved Value Added Tax collections, increased oil-related tax receipts and intensified efforts by the Nigeria Revenue Service (NRS) to achieve its estimated N40tn revenue target.
Of the total allocation, the Federal Government received N3.72tn, state governments got N3.56tn, while local governments received N2.51tn. The 13 oil-producing states also shared N673.17bn as derivation revenue.
Monthly allocations rose steadily from N1.96tn in January to N2.30tn in May. While the distributable pool declined by 3.37 per cent to N1.89tn in February, it rebounded to N2.04tn in March, increased further to N2.26tn in April and climbed to N2.30tn in May.
Compared with the corresponding months in 2025, January’s allocation rose by 15.09 per cent, February by 12.87 per cent, March by 28.86 per cent, April by 34.35 per cent and May by 38.55 per cent.
Despite the significant increase in allocations, the Nigeria Labour Congress (NLC) and private sector stakeholders criticised governments at all levels, saying the higher revenues had not translated into better living conditions for citizens.
Speaking in an interview, the Assistant General Secretary of the NLC, Chris Onyeka, said the impact of increased government revenue depended on the willingness of leaders to utilise resources for the benefit of citizens.
“It is not the quantum of revenue available to the government that translates to impact on the welfare of citizens and workers. It is the willingness of those in leadership positions that determines how these resources affect the lives of the people,” he said.
Onyeka accused governments of failing to invest in projects that improve citizens’ welfare, lamenting the deterioration of infrastructure and worsening insecurity across the country.
According to him, insecurity remains the biggest indicator of governance failure, as many Nigerians cannot travel safely or access their farms without fear of attacks and kidnappings.
“If I cannot go to my farm and return safely or harvest what I planted, it has multiplier effects on the welfare of the citizenry. Nigerians are scared. As you are saving money, you are also saving money for ransom payments,” he said.
The labour leader further noted that workers had not experienced any improvement in transportation, healthcare, education, food affordability or overall living standards despite the increased revenues.
“We do not feel better off. We do not use better roads. We do not pay cheaper transport fares. We do not have better access to healthcare, education or nutrition. Nigeria is not working,” Onyeka stated.
Also reacting, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said some states had utilised increased revenues to support citizens through investments in mass transit, agriculture, healthcare and rural development.
However, he noted that many governments preferred highly visible projects such as roads, flyovers and airports, which often have limited direct impact on livelihoods and living standards.
Yusuf warned against a situation where governments record improved fiscal performance while poverty continues to worsen, urging states to prioritise inclusive projects that directly improve citizens’ welfare.
He also called on state governments to strengthen support for security agencies instead of leaving the burden of tackling insecurity solely to the Federal Government.
The increase in allocations comes months after the implementation of a new VAT sharing formula under the tax reform laws signed by President Bola Tinubu. The reforms reduced the Federal Government’s share of VAT from 15 per cent to 10 per cent and increased the states’ share from 50 per cent to 55 per cent.
The reforms had earlier boosted VAT allocations to states, which received N1.18tn in the first quarter of 2026, representing an increase of N214.78bn or 22.35 per cent compared to the same period in 2025.
Despite the improved revenue profile, government earnings remain below target. The Nigeria Revenue Service generated N7.44tn in the first quarter of 2026 against a target of N9.68tn, recording a shortfall of N2.24tn and a performance rate of 76.87 per cent.
To improve compliance, the NRS has warned that unremitted taxes by ministries, departments, agencies, states and local governments could result in direct deductions from their FAAC allocations.
The agency said stronger tax compliance by public institutions is critical to achieving its N40tn revenue target for the year.
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