FAAC allocations after subsidy removal
Nigeria’s three tiers of government shared an extraordinary ₦47.25 trillion from the Federation Account between 2023 and 2025, intensifying scrutiny of state governors and other public officials over whether the unprecedented rise in government revenue has produced corresponding improvements in infrastructure, healthcare, education, security and living standards.
The surge in FAAC allocations after subsidy removal represents one of the most significant changes in Nigeria’s public finances since President Bola Tinubu announced the removal of petrol subsidy in May 2023.
Figures contained in a Federal Ministry of Finance document show that the Federal Government, 36 states and 774 local government areas received ₦47.25tn in net Federation Account allocations between 2023 and 2025.
Remarkably, the amount represents more than half of the approximately ₦93.13tn distributed through FAAC during the entire nine-year period from 2017 to 2025.
The numbers have renewed a fundamental question confronting Nigerian governance: If governments are receiving substantially more money, why are many citizens still struggling to see equivalent improvements in public services?
FAAC Allocations After Subsidy Removal Rise Sharply
The transformation becomes clearer when annual figures are examined.
Net FAAC distributions stood at about ₦5.64tn in 2017.
They rose to ₦7.98tn in 2018 before slipping to ₦7.85tn in 2019 and ₦7.11tn in 2020.
Allocations subsequently recovered to ₦8.12tn in 2021 and ₦9.18tn in 2022.
Then came the post-reform acceleration.
FAAC distributions climbed to ₦10.09tn in 2023, jumped to ₦15.26tn in 2024 and reached a record ₦21.90tn in 2025.
The figures mean the FAAC allocations after subsidy removal increased at a pace far beyond what Nigeria recorded in the preceding years.
The first six years between 2017 and 2022 produced approximately ₦45.88tn in distributions.
The following three years alone produced ₦47.25tn.
In other words, three post-reform years generated more distributable naira revenue than the previous six years combined.
Governors Did Not Receive the Entire ₦47.25tn
This is where the original headline requires careful treatment.
The ₦47.25tn was not paid exclusively to governors or state governments.
It was distributed among all three tiers of government.
Figures for 2023 to 2025 show that states received approximately:
2023: ₦4.179tn
2024: ₦6.533tn
2025: ₦8.934tn
That gives states roughly ₦19.65tn over those three years.
The Federal Government and local governments received their respective statutory shares.
For 2022 to 2025, for example, Federal Government allocations totalled approximately ₦17.34tn, while states received about ₦21.71tn and local governments approximately ₦13.01tn.
So while governors have legitimate questions to answer, saying they personally controlled the entire ₦47tn would be inaccurate.
Ogele News should make that distinction explicit.
States Among Biggest Beneficiaries of Revenue Surge
The qualification does not diminish the dramatic improvement in state finances.
State governments received about ₦4.18tn in 2023.
By 2025, their annual allocation had more than doubled to approximately ₦8.93tn.
That represents an enormous expansion in the resources available to governors.
The Federal Ministry of Finance estimates that compared with the monthly allocation pattern before petrol subsidy removal, states received approximately ₦9.17tn in additional allocations between June 2023 and December 2025.
Local governments received another estimated ₦6.66tn in additional allocations over the same period.
That is why scrutiny of FAAC allocations after subsidy removal cannot reasonably stop at Abuja.
State capitals and local government headquarters must also answer questions.
Why Has FAAC Revenue Increased?
Several factors explain the dramatic increase.
The first is petrol subsidy removal.
For years, the Federal Government spent enormous resources subsidising petrol prices.
Removing the subsidy reduced that burden and increased funds available for distribution.
The second major factor is Nigeria’s foreign exchange reform.
Because substantial government revenue originates from petroleum and other foreign-currency sources, naira depreciation means each dollar converted into local currency produces considerably more naira.
Improved revenue mobilisation and remittances have also contributed.
The Federal Government itself says economic reforms have substantially increased the resources available through the Federation Account.
Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele said recently that monthly Federation Account allocations, which were previously around ₦300bn to ₦600bn before 2023, have now risen beyond ₦2tn.
₦47tn Figure Does Not Tell the Whole Economic Story
The headline number is enormous.
But comparing nominal naira figures across years can also be misleading.
Nigeria’s currency has depreciated significantly.
PUNCH’s analysis illustrates the problem.
Nigeria distributed ₦7.98tn through FAAC in 2018, equivalent to approximately $26bn using the Central Bank exchange rate at the time.
By 2025, annual distribution had risen dramatically to ₦21.9tn.
Yet converted at the 2025 exchange rate, that amount was worth only around $14.4bn.
That means the spectacular rise in naira-denominated FAAC allocations after subsidy removal does not translate directly into an equivalent increase in real purchasing power.
Inflation also matters.
A road that cost ₦10bn several years ago could cost considerably more today.
Medical equipment, construction materials, vehicles, imported machinery and other government purchases have all become more expensive.
That context should be acknowledged.
But it does not eliminate the need for accountability.
Nigerians Ask: Where Is the Money?
This is where the story moves from accounting into governance.
Nigerians have endured significant economic pain since 2023.
Petrol prices rose sharply after subsidy removal.
Transportation costs increased.
Food inflation squeezed household budgets.
Electricity costs rose for some consumers.
Businesses confronted higher energy and financing costs.
The naira lost considerable value.
Government’s argument has consistently been that difficult reforms would eventually create a stronger fiscal foundation for development.
With FAAC allocations after subsidy removal now substantially higher, citizens have every right to ask what those reforms have delivered.
If governments have more resources, citizens should eventually see more results.
Roads and Flyovers Are Not Enough
State governments frequently point to infrastructure as evidence of improved finances.
Across Nigeria, governors have announced road projects, bridges, flyovers, urban renewal schemes and government buildings.
Infrastructure matters.
Good roads reduce transportation costs.
Bridges can unlock economic activity.
Drainage systems can protect communities from flooding.
But development cannot be measured by concrete alone.
Public primary schools matter.
Primary healthcare centres matter.
Clean water matters.
Agricultural extension matters.
Waste management matters.
Rural roads matter.
Maternal healthcare matters.
Jobs and productive private investment matter.
The real test of higher FAAC allocations after subsidy removal is whether citizens experience measurable improvements across these areas.
Analysts Question State Spending Priorities
Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, has raised concerns about how some state governments prioritise spending.
He questioned decisions by states to establish airlines when communities continue to struggle with inadequate roads, water and other basic infrastructure.
His argument is that governments should prioritise investments capable of producing stronger economic and social returns.
That criticism deserves serious consideration.
A prestigious project may generate headlines.
A functional rural road can transform agricultural productivity.
A new government complex may look impressive.
A properly equipped primary healthcare centre may save hundreds of lives.
Public spending should ultimately be assessed by impact rather than visibility.
Accountability Must Extend to Local Governments
Governors should not be the only focus.
Nigeria has 774 local government areas, and they have also benefited from increased Federation Account revenue.
The Finance Ministry estimates that local governments received about ₦6.66tn more between June 2023 and December 2025 than they would have received under the previous monthly allocation pattern.
That money should also produce visible results.
Local governments have responsibilities directly affecting ordinary communities.
Primary healthcare, sanitation, local roads, markets and other grassroots services all depend partly on functioning local administration.
If allocations are increasing but communities cannot identify improvements, council administrations should face the same scrutiny directed at governors.
https://ogelenews.ng/faac-payouts-hit-₦47-25tn-in-three-years-as-governo…
Latest FAAC Figures Show Revenue Boom Continuing
The expansion did not end in 2025.
Official figures show that FAAC shared ₦2.551tn among the Federal Government, states and local governments from June 2026 revenue.
The distribution included ₦1.810tn in statutory revenue and ₦740.724bn from Value Added Tax.
From statutory revenue alone, the Federal Government received ₦849.366bn, state governments ₦430.810bn and local governments ₦332.136bn.
Oil-producing states additionally received ₦197.610bn as 13 per cent derivation.
These numbers demonstrate that FAAC allocations after subsidy removal remain at historically high nominal levels.
The accountability debate is therefore becoming more urgent, not less.
Government Also Warns That More Money Is Not Enough
Interestingly, the Federal Government itself acknowledges the problem.
Oyedele has warned that increased allocations alone will not automatically produce development.
He has urged states to channel additional revenues into infrastructure, human capital, productivity and better public services.
He has also encouraged states to expand internally generated revenue, attract investment and create jobs rather than becoming excessively dependent on Federation Account transfers.
That is an important admission.
Revenue is only an input.
Development is the outcome.
A government can receive twice as much money and still deliver poor results if procurement is wasteful, projects are badly selected, corruption consumes resources or expenditure is concentrated on politically attractive but economically weak projects.
Citizens Need Better Access to State Finances
Transparency therefore becomes essential.
Every state publishes a budget.
Citizens should be able to compare that budget against actual revenue and expenditure.
How much did the state expect from FAAC?
How much did it actually receive?
What additional revenue arrived?
Where was it spent?
Which projects received the money?
Who received the contracts?
What percentage of projects has been completed?
How much went into healthcare and education?
Those questions should become routine.
The increase in FAAC allocations after subsidy removal provides civil society organisations, journalists and state legislatures with an opportunity to strengthen public expenditure tracking.
State Assemblies Must Do More
State Houses of Assembly have constitutional oversight responsibilities.
They should not simply approve budgets and disappear from the conversation.
When actual revenue significantly exceeds projections, lawmakers should determine how additional resources are being managed.
Auditors-General also have critical responsibilities.
Their reports should be timely, accessible and subjected to serious legislative scrutiny.
A functioning accountability system requires more than governors announcing projects on television.
It requires documentation showing how public money moved from revenue receipt through appropriation, procurement and expenditure to completed outcomes.
Nigeria Must Move From Allocation Politics to Results
For decades, Nigerian economic reporting has focused heavily on what governments receive from Abuja.
Every month, attention turns to the FAAC meeting.
How much was shared?
How much did states receive?
How much went to local governments?
But the more useful question comes afterwards.
What did the money accomplish?
Nigeria needs to move from allocation journalism towards results journalism.
If a state receives an additional ₦100bn, journalists should eventually ask what measurable difference that ₦100bn made.
How many kilometres of road?
How many functioning health centres?
How many classrooms?
How many communities received water?
How many jobs were created?
How much agricultural output increased?
That is how FAAC allocations after subsidy removal should ultimately be evaluated.
Ogele News Analysis: ₦47tn Is Huge, But Don’t Misrepresent It
The original headline, “FAAC bonanza: Govs face questions as payouts hit N47tn,” has considerable impact.
But there are two problems.
First is the word “bonanza.”
It is colourful, but it introduces judgement into what should initially be presented as a fiscal fact.
The increase is enormous, but part of that increase reflects naira depreciation and inflation.
The stronger approach is to present the numbers first and interrogate their meaning afterwards.
Second, and more importantly, governors did not receive ₦47tn.
The ₦47.25tn represents total net FAAC distributions to the Federal Government, states and local governments between 2023 and 2025.
States nevertheless received approximately ₦19.65tn during those three years, based on the figures contained in the Finance Ministry document.
That is still an extraordinary amount.
And it justifies scrutiny.
But accountability journalism becomes weaker, not stronger, when a dramatic headline blurs the underlying numbers.
The most important finding is actually more powerful when accurately stated:
Nigeria’s three tiers of government received more through FAAC in the three years from 2023 to 2025 than they received during the preceding six years combined.
Meanwhile, states’ annual allocation more than doubled from approximately ₦4.18tn in 2023 to ₦8.93tn in 2025.
Those are remarkable numbers.
Now Nigerians need remarkable results.
The Tinubu administration has repeatedly argued that subsidy removal and other reforms freed resources for development.
The fiscal numbers increasingly support the first half of that argument: more naira is reaching governments.
The second half requires much greater scrutiny.
Are schools better?
Are hospitals functioning?
Are roads improving?
Is water more accessible?
Are communities safer?
Are states attracting investment?
Are young Nigerians finding productive employment?
That is where the FAAC allocations after subsidy removal story ultimately leads.
The real scandal would not be that Nigerian governments suddenly have more money.
It would be that they have more money and citizens still cannot see where it went.
