Meet 10 Nigerian States With Highest FAAC Allocation in 2026, Lagos Leads
- Nigeria's FAAC disbursed N703.26 billion to states in January 2026, marking a significant 7.18% increase from December 2025
- Top states like Lagos and Kano harness VAT inflows, while oil revenue volatility persists for others
- The widening concentration gap reveals that 44.76% of total allocations go to just ten states, raising equity concerns
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria’s Federation Account Allocation Committee (FAAC) disbursed a total net sum of N703.26 billion to states in January 2026, reflecting a 7.18% increase compared to December 2025.
Data from the Office of the Accountant-General of the Federation, as reported by the National Bureau of Statistics, shows that total gross distributable revenue stood at N2.59 trillion.
Source: Getty Images
Out of this, the Federal Government received N546.14 billion, while Local Government Councils got N511.17 billion, leaving states as the largest beneficiaries.
The increase in allocations was driven by stronger statutory revenues, improved Value Added Tax (VAT) collections, and higher Electronic Money Transfer Levy (EMTL) inflows.
Strong growth signals expanding revenue pool
The latest figures indicate sustained fiscal expansion across Nigeria’s states. On a year-on-year basis, allocations rose sharply by 32.06%, up from N532.34 billion in January 2025.
Month-on-month, the increase from N656.12 billion in December 2025 to N703.26 billion underscores continued growth momentum.
However, the data also reveals a widening concentration gap, as the top 10 states alone accounted for N314.78 billion, representing 44.76% of total allocations.
While some states benefited from oil-derived revenues, others leveraged strong consumption-driven VAT inflows.
Top 10 States with highest FAAC allocation
10. Borno State – N19.06 billion
Borno recorded strong growth, supported by increased VAT receipts and federal transfers. The state saw a 46.14% year-on-year rise, reflecting ongoing reconstruction and economic recovery.
9. Katsina State – N19.19 billion
Katsina maintained steady growth with improved statutory inflows and VAT performance, recording a 48.22% increase compared to January 2025.
8. Jigawa State – N19.58 billion
Jigawa posted the highest year-on-year growth rate of 54.43%, highlighting a significant improvement in federal revenue inflows.
7. Oyo State – N21.17 billion
Oyo emerged as one of the fastest-growing states, driven by rising consumption and VAT receipts, with a 54.71% increase year-on-year.
Oil and commerce drive top allocations
6. Kano State – N26.59 billion
Kano led among non-oil states, benefiting from strong trade activity and VAT inflows. Its commercial strength continues to boost revenue.
5. Rivers State – N35.08 billion
Rivers recorded a 21.06% year-on-year decline, largely due to reduced oil derivation inflows, despite remaining among the top earners.
4. Bayelsa State – N35.24 billion
Bayelsa’s allocation remained relatively stable, supported by consistent oil derivation revenue, though growth was marginal.
3. Akwa Ibom State – N35.89 billion
Akwa Ibom benefited from oil revenues, posting modest growth despite a decline in monthly inflows.
Delta and Lagos dominate the rankings
2. Delta State – N47.15 billion
Delta’s allocation was heavily driven by derivation revenue, accounting for a significant portion of its earnings. The state recorded strong annual growth despite a monthly dip.
1. Lagos State – N55.83 billion
Lagos retained its position as the highest recipient, underpinned by massive VAT contributions of N50.12 billion and strong EMTL inflows.
The state recorded a 65.24% month-on-month increase and a 43.58% year-on-year growth, reflecting its dominance as Nigeria’s commercial hub. High levels of business activity, digital payments, and consumption continue to drive its revenue strength.
What this means for Nigeria’s fiscal landscape
The FAAC data highlights a dual reality in Nigeria’s revenue structure. While overall allocations are rising, a small group of states continues to capture a large share of the funds.
Oil-producing states still rely heavily on derivation revenues, making them vulnerable to fluctuations in production and global prices.
On the other hand, economically active states like Lagos and Kano are increasingly benefiting from VAT and digital transaction growth.
Source: Getty Images
The trend suggests that diversification, improved tax systems, and increased economic activity will play a crucial role in determining future allocation patterns across Nigeria.
10 Nigerian states with highest foreign debt repayments
Meanwhile, Legit.ng earlier reported that Nigeria’s 36 states paid a combined N455.38bn in foreign debt service deductions in 2025, according to Federation Accounts Allocation Committee figures released by the National Bureau of Statistics.
The amount marks a sharp rise from the N362.08bn deducted in 2024, representing an increase of N93.30bn or 25.77 per cent year-on-year.
In practical terms, a bigger share of states’ FAAC allocations was automatically deducted to service loans owed to external creditors, including the World Bank, IMF, China and other multilateral and bilateral lenders.
Source: Legit.ng
