Nigeria’s 36 state governors are facing renewed pressure to account for how increased Federation Account revenues have been spent, following the distribution of about N47.25tn to the three tiers of government between 2023 and 2025.
The figure represents about half of the N93.13tn distributed from the Federation Account between 2017 and 2025, according to data from the Federal Ministry of Finance.
The sharp increase followed major economic reforms introduced in 2023, particularly the removal of petrol subsidy, foreign exchange reforms, and efforts to improve revenue collection.
FAAC distributions rose from N9.18tn in 2022 to N10.09tn in 2023 before jumping to N15.26tn in 2024 and N21.90tn in 2025. This means the three years after the reforms generated more distributable revenue than the preceding six years combined.
The states were among the biggest beneficiaries. Their allocation rose from about N4.18tn in 2023 to N6.53tn in 2024 and N8.93tn in 2025, according to the Finance Ministry figures.
The Federal Ministry of Finance said the higher allocations had increased the resources available to states and local governments for salaries, pensions, infrastructure, and other responsibilities. It estimated that states received about N9.17tn in additional allocations between June 2023 and December 2025, while local governments received an additional N6.66tn.
The revenue surge has, however, triggered questions over whether the increased funds have translated into better public services.
Policy analysts and civil society groups have pointed to persistent challenges, including high living costs, poor infrastructure, unemployment, inadequate healthcare, weak water supply, and insecurity.
A policy analyst, Adebayo Abubakar, said governments should prioritize basic services and infrastructure rather than projects with limited impact on citizens.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, also called for greater transparency, arguing that citizens should be able to monitor how state and local governments spend public funds.
He said increased revenue should be directed towards productive investments such as roads, water supply, and other infrastructure capable of improving economic activity and living standards.
Development economist Aliyu Ilias similarly urged states to disclose how additional funds were being spent and called on civil society organizations and citizens to monitor their utilization.
The surge in FAAC revenue has also been linked to the weaker naira, meaning that part of the increase in naira-denominated allocations reflects the conversion of foreign-currency earnings at higher exchange rates. NEITI has separately attributed the rise in FAAC distributions to subsidy removal and foreign exchange reforms, which improved naira-denominated oil revenues.
With states receiving substantially more from the Federation Account, the focus is increasingly shifting from how much governments receive to how effectively the money is spent and whether Nigerians can see tangible improvements in their daily lives.
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