The Federation Account Allocation Committee (FAAC) has shared a whopping sum of N15.26 Trillion to the federal, state, and Local Government Areas in 2024.
The allocation surged by 43% in 2024 according to a new report by the Nigeria Extractive Industries Transparency Initiative (NEITI).
The NEITI FAAC Quarterly Review, released on Tuesday in Abuja, attributed the revenue increase to fiscal reforms by the Federal Government, particularly the removal of fuel subsidies and exchange rate adjustments, which boosted oil revenue remittances.
The report detailed the distribution of funds as follows:
•Federal Government – N4.95 trillion
•State Governments – N5.81 trillion
•Local Governments – N3.77 trillion
Among the three tiers of government, state governments saw the highest percentage increase, with allocations rising by 62% from N3.58 trillion in 2023 to N5.81 trillion in 2024.
Local governments received 47% more than in 2023, while the federal government’s share grew by 24%, from N3.99 trillion to N4.95 trillion.
The report highlighted that total FAAC allocations grew by 66.2% over the past two years:
•N9.18 trillion in 2022
•N10.9 trillion in 2023
•N15.26 trillion in 2024
•Top and Bottom State Allocations
The report identified Lagos, Delta, and Rivers as the highest-earning states, while Nasarawa, Ebonyi, and Ekiti received the least.
•Top 3 States by FAAC Allocation in 2024:
•Lagos State – N531.1 billion
•Delta State – N450.4 billion
•Rivers State – N349.9 billion
•Lowest 3 States by FAAC Allocation in 2024:
•Nasarawa State – N108.3 billion
•Ebonyi State – N110 billion
•Ekiti State – N111.9 billion
Additionally, six states—Lagos, Rivers, Bayelsa, Akwa Ibom, Delta, and Kano—each received over N200 billion, accounting for 33% of total state allocations, while the six lowest-receiving states—Yobe, Gombe, Kwara, Ekiti, Ebonyi, and Nasarawa—received just 11.5% combined.
The report noted a significant financial divide, with the top four states (Lagos, Delta, Rivers, and Akwa Ibom) receiving N1.49 trillion, which is over three times more than the bottom four states (Kwara, Ekiti, Ebonyi, and Nasarawa), which received N442.4 billion in total.
The NEITI report raised concerns over high debt deductions, revealing that states’ foreign debts and contractual obligations led to N800 billion in deductions, accounting for 12.3% of total allocations.
Top 3 States by Debt Deductions:
See also Natasha’s husband finally speaks on rift between Akpabio, wife
•Lagos State – N164.7 billion (over 20% of total deductions)
•Kaduna State – N51.2 billion
•Rivers State – N38.6 billion
Other states with significant debt deductions included Bauchi (N37.2 billion). The report highlighted that many states with high debt burdens ranked low in FAAC allocations, raising concerns about their debt-to-revenue ratios and overall fiscal sustainability.
Speaking on the findings, NEITI Executive Secretary, Dr. Orji Ogbonnaya Orji, noted that the report reflects the impact of major fiscal reforms, particularly the subsidy removal in mid-2023 and exchange rate policies that reshaped revenue inflows to all tiers of government.
He emphasized the need to assess federal and state borrowing sustainability, especially for oil-producing states receiving 13% derivation revenue from crude oil, gas, and solid minerals.
“The analysis focused on crude oil revenue derivation states, as solid minerals remain underutilized despite their significant potential,” Orji stated.
With revenue growth fueled by policy changes, the report suggests that state governments must improve fiscal management to reduce high debt burdens and ensure long-term economic stability.
(Vanguard)
