Nigeria’s three tiers of government shared N47.25tn from the Federation Account between 2023 and 2025, more than the N45.88tn distributed during the preceding six years, underscoring the dramatic expansion in public revenues following the removal of the petrol subsidy and other economic reforms.
The surge has, however, intensified scrutiny of state and local governments, with analysts and civil society groups questioning whether the additional revenue has translated into better infrastructure, public services, jobs and living standards for Nigerians.
According to a report by The Punch, Data from the Federal Ministry of Finance showed that the Federal Government, 36 states and 774 local governments shared about N93.13tn in net Federation Account Allocation Committee revenue between 2017 and 2025. Of this, N47.25tn, or about 50.7 per cent, was distributed in just three years from 2023 to 2025.
The figures highlight a fundamental shift in Nigeria’s fiscal landscape since President Bola Tinubu’s administration introduced major reforms in 2023, including the removal of petrol subsidy, changes to the foreign-exchange regime and measures aimed at improving revenue mobilisation.
Net FAAC distributions rose from N5.64tn in 2017 to a record N21.90tn in 2025, representing an increase of about 288 per cent.
The annual figures show the acceleration clearly. FAAC distributions stood at N5.64tn in 2017, N7.98tn in 2018, N7.85tn in 2019, N7.11tn in 2020, N8.12tn in 2021 and N9.18tn in 2022.
Following the reforms, the figure rose to N10.09tn in 2023, jumped to N15.26tn in 2024 and reached N21.90tn in 2025.
The pace of growth has also changed substantially. Average annual growth in FAAC distributions was about eight per cent before the reforms, compared with 24 per cent between 2023 and 2025.
In 2024 alone, distributable revenue increased by 34 per cent, while another 30 per cent increase followed in 2025.
As a result, the three years after the reforms generated more Federation Account revenue than the previous six years combined.
State governments have been among the biggest beneficiaries of the revenue expansion.
The figures show that states received about N4.18tn in 2023, N6.53tn in 2024 and N8.93tn in 2025. Their combined allocation over the three years was therefore substantially higher than before the reforms.
The Federal Government received N3.75tn in 2023, N4.57tn in 2024 and N7.02tn in 2025, while local governments received N2.60tn, N3.77tn and N5.35tn respectively.
The Federal Ministry of Finance said the increase had expanded the resources available to states and local governments for salaries, pensions, infrastructure and other responsibilities.
According to the ministry, states received about N9.17tn in additional allocations between June 2023 and December 2025 compared with the pre-subsidy-removal monthly revenue run rate. Local governments received an estimated additional N6.66tn over the same period.
Despite the striking increase in nominal FAAC receipts, the figures also point to an important caveat: the revenue boom cannot be assessed solely in naira terms.
The depreciation of the naira has significantly increased the domestic-currency value of dollar-denominated oil and other foreign-exchange earnings.
For example, the N7.98tn distributed in 2018 was equivalent to roughly $26bn at the prevailing Central Bank of Nigeria exchange rate. By 2025, N21.90tn was worth about $14.4bn when converted at the CBN exchange rate cited in the document.
This means that although FAAC distributions increased by about 174 per cent in naira terms between 2018 and 2025, their dollar value declined by roughly 45 per cent.
The distinction is important for international investors and policymakers because the nominal revenue surge partly reflects currency depreciation rather than an equivalent increase in Nigeria’s real fiscal capacity.
The sharp increase in revenue has nevertheless created a bigger fiscal opportunity for state governments—and, with it, a greater accountability burden.
Policy analysts cited in the report argued that the additional funds have not consistently produced visible improvements in the daily lives of Nigerians, many of whom continue to contend with high living costs, unemployment, inadequate infrastructure and insecurity.
Analyst Adebayo Abubakar said governments should prioritise basic services such as schools, healthcare, water supply and infrastructure rather than concentrating spending on conspicuous projects.
Other analysts similarly argued that higher revenues should translate into stronger investment in affordable transportation, healthcare, education, agriculture and employment-generating activities.
The concern is particularly significant because the expansion in FAAC receipts has occurred against a backdrop of severe economic pressure on households.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the debate should move beyond how much money governments receive to how effectively they deploy it.
He warned against spending public funds on projects that provide limited economic or social returns, citing state-backed airlines as an example of investments that could become a continuing drain on public finances.
Yusuf argued that resources should instead be channelled towards productive infrastructure such as roads and water supply, particularly in rural communities.
He also stressed that the Federal Government has limited powers to determine how states spend their Federation Account allocations, making citizen oversight and public scrutiny essential.
That places greater responsibility on residents, civil society organisations and non-governmental organisations to track state-level expenditure and demand evidence of results.
From revenue sharing to development delivery
Development economist Aliyu Ilias said the increased revenue had created a greater responsibility for governors to demonstrate measurable improvements in citizens’ welfare.
He welcomed efforts by the Federal Government to attach specific objectives to some funds released to states, but said transparency would ultimately determine whether the additional resources produce meaningful outcomes.
He urged state governments to publicly disclose how the funds are being spent and encouraged civil society organisations to monitor implementation.
The broader issue is therefore shifting from how much Nigeria shares to what Nigerians get in return.
The post-2023 FAAC figures represent a major expansion of resources available to Nigeria’s three tiers of government. But higher allocations alone do not guarantee stronger economic development.
For governors, the political and economic test is increasingly straightforward: whether the additional billions reaching state coffers can be converted into better roads, reliable water, stronger healthcare and education systems, greater security, productive jobs and improved living standards.
As FAAC distributions have reached record levels, pressure for measurable results is likely to rise with them.