GOVERNORS FACE HEAT AS N9TN FAAC WINDFALL FAILS TO TRANSLATE TO GRASSROOTS IMPACT
Read Time:2 Minute, 20 Second
By: Fasasi Hammad
Despite receiving an estimated N9tn in Federation Account Allocation Committee (FAAC) inflows in 2025, state governors are coming under increasing pressure from labour unions, civil society groups, economists and opposition parties over what critics describe as a disconnect between rising revenues and limited improvements in citizens’ welfare.
Analysis of Federation Account disbursement figures published by the National Bureau of Statistics and collated by the media shows that FAAC allocations to states rose sharply by more than N2tn within one year, reflecting a major revenue windfall for subnational governments amid higher federation inflows.
According to the data, state governments received N7.315tn from FAAC in 2025, up from N5.186tn in 2024, representing a year-on-year increase of about 41 per cent. When the constitutionally mandated 13 per cent derivation revenue is included, total inflows attributable to states climbed to N8.934tn, or roughly N9tn, compared with N6.533tn the previous year.
The surge has drawn criticism from organised labour, with the Nigeria Labour Congress warning that higher allocations have failed to translate into meaningful welfare gains due to weak governance, misplaced priorities and corruption at the state level. Civil society organisations echoed similar concerns, accusing state governments of poor revenue management and calling for stronger accountability and oversight mechanisms.
Read More…
GOVERNORS FACE HEAT AS N9TN FAAC WINDFALL FAILS TO TRANSLATE TO GRASSROOTS IMPACT
Economists say the increase has expanded states’ fiscal space but caution that overreliance on federally shared revenue, coupled with weak internal revenue generation and inefficient spending, continues to undermine sustainable development. They warn that FAAC inflows remain volatile and vulnerable to oil price shocks, making long-term planning difficult.
Monthly disbursement figures show that state allocations trended upward throughout 2025, peaking at over N727bn in October, significantly higher than levels recorded in 2024. By mid-year, states had already received more than N3.32tn, easing short-term liquidity pressures, especially for those struggling with wage bills and debt servicing.
However, analysts note that while allocations increased across all tiers of government, the impact on states is particularly critical given their responsibility for education, healthcare and infrastructure delivery. The additional N2.4tn received by states in 2025 alone is nearly half of what they received from FAAC in total the previous year.
The latest BudgIT State of States Report highlights the depth of fiscal dependence, revealing that more than 30 states rely heavily on FAAC for the bulk of their recurrent revenue, a trend experts say discourages innovation and weakens incentives to grow internally generated revenue.
Despite the unprecedented inflows, labour unions and civil society groups insist that visible improvements in healthcare, education, infrastructure and living standards remain limited across many states, fuelling public discontent and renewed scrutiny of how FAAC funds are deployed.
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0