Key Points

• Government allocations doubled within four years while poverty levels continued to rise nationwide.
• States and councils received record funds but delivered limited relief at the grassroots.
• Inflation and naira weakness eroded the real value of higher revenues.

In less than four years, allocations to Nigeria’s three tiers of government have more than doubled. Yet daily life for millions of citizens has grown harder.

The contrast has become sharper with every FAAC publication. More money flows into government accounts, while poverty spreads across homes and markets.

Since June 2023, federal, state and local governments have received higher monthly allocations.

States and councils, in particular, now control far more cash than they did before the removal of fuel subsidies and the floating of the naira.

FAAC Allocations Rise Sharply

Published figures from the Federation Account Allocation Committee show a steep climb in shared revenue. In 2022, the three tiers shared N9.18 trillion.

That figure rose to N10.9 trillion in 2023, jumped to N15.26 trillion in 2024, and reached N18.54 trillion between January and October 2025.

Over 34 months, from January 2023 to October 2025, governments at all levels shared N44.03 trillion.

State governments benefited the most from the surge. Their share climbed from N3.58 trillion in 2023 to N5.81 trillion in 2024.

Between January and October 2025 alone, states received N7.54 trillion. Over the same period, the Federal Government collected N6.414 trillion, while local governments received N4.547 trillion.

A FAAC Quarterly Review by the Nigeria Extractive Industries Transparency Initiative recorded a 62 percent rise in allocations to states in 2024 compared with 2023.

Local councils recorded a 47 percent increase. The Federal Government’s share rose by 24 percent.

Reforms Drive Revenue Growth

Officials link the revenue jump to recent fiscal and monetary reforms. The removal of petrol subsidies, the liberalisation of the exchange rate, and stronger oil receipts expanded government earnings.

Budget and Economic Planning Minister Abubakar Bagudu recently disclosed that monthly allocations to states and local councils rose from N458.81 billion in May 2023 to N991.81 billion by June 2025.

The increase stood at N533 billion, or 116.17 percent. He spoke during a policy session organised by the Sir Ahmadu Bello Memorial Foundation in Kaduna.

The figures excluded EMT levies, foreign exchange gains and special augmentations.

Rising Revenue, Rising Hardship

The revenue surge arrived with sharp economic pain. President Bola Tinubu announced the end of fuel subsidies and the floating of the naira on May 29, 2023.

The impact was immediate. Petrol prices jumped from about N197 per litre to between N1,000 and N1,200 in many cities. At one point, the naira traded close to N1,900 to the dollar.

Inflation climbed steadily. It rose from 22.41 percent to 34.80 percent by December 2024, squeezing household incomes and eroding purchasing power.

More than two years later, the hardship persists. Despite the unprecedented inflow to states and councils, visible improvement remains limited.

Poverty Numbers Keep Growing

In 2023, an estimated 93.8 million Nigerians, about 43 percent of the population, lived below the poverty line. That number has since risen sharply.

Recent estimates put the figure at 139 million people, or 61 percent of the population.

In its 2022 Multidimensional Poverty Index, the National Bureau of Statistics reported that 133 million Nigerians were multidimensionally poor. The National Population Commission placed Nigeria’s population at 216 million in 2023.

While the NBS has yet to release updated poverty figures for 2025, the World Bank reported in October that 139 million Nigerians lived below the national poverty line of N376.50 per person per day.

Worldometer data showed Nigeria’s population at 239.719 million as of December 11, 2025. That leaves just over 100 million people living above the daily poverty threshold.

Inflation Rebased, Pressures Remain

Annual inflation peaked at 34.80 percent in December 2024. In January 2025, the NBS rebased its Consumer Price Index, shifting the base year from 2009 to 2024.

The adjustment lowered the headline rate to 24.48 percent. Inflation later eased to 18.02 percent in September and 16.05 percent in October 2025.

Even with the moderation, prices remain high relative to incomes. Food, transport and energy costs continue to strain households.

Tinubu Presses Governors for Results

Concerned about growing public frustration, President Tinubu recently urged state governors to convert higher allocations into visible development.

At a National Executive Committee meeting of the All Progressives Congress, he told party governors to intensify grassroots delivery and ensure citizens feel the impact of governance.

He stressed that complaints of hardship remained widespread and urged leaders to spread development more evenly across communities.

FG Earns N31.26tn in Ten Months

An analysis of FAAC records from January to October 2025 shows that the Federal Government earned N31.265 trillion in gross revenue.

The figure fell N3.555 trillion short of the projected N34.82 trillion for the year.

After deductions for revenue collection, interventions, transfers and refunds, the distributable amount stood at N18.54 trillion.

States received N7.54 trillion, the Federal Government collected N6.414 trillion, and local governments received N4.547 trillion.

In percentage terms, states received 40.67 percent, the Federal Government 34.59 percent, and local councils 25.74 percent.

Transfers, interventions, refunds and savings accounted for N11.17 trillion, or 35.73 percent of gross revenue. Revenue collection costs totaled N1.167 trillion.

Monthly Breakdown of 2025 Revenue

Gross revenue peaked in June at N4.232 trillion. Monthly earnings fluctuated, reflecting oil output, prices and exchange rate movements.

Revenue shared followed a similar pattern, with August recording the highest distribution at N2.225 trillion.

Economists Warn Against Illusions

Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise, cautioned that nominal revenue growth can mislead.

He noted that inflation and currency depreciation reduce real value, limiting what states can achieve with larger figures.

He argued that states still have room to improve infrastructure, pay salaries and clear pensions, but questioned how efficiently funds reach projects that affect daily life.

Transparency, he added, remains uneven, with not all states publishing full budget implementation reports.

States Defend Spending Choices

Ekiti State Governor Biodun Oyebanji credited higher allocations for enabling his administration to fund projects without borrowing.

During the commissioning of the Ekiti Revenue House in Ado Ekiti, he listed roads, hospitals, electricity and water schemes completed over three years.

He maintained that stronger revenue flows allowed the state to pursue development goals while avoiding new loans. He also praised the current revenue sharing system, describing it as more favourable to states than in the past.