Nigeria’s states have received significantly higher allocations from the Federation Account since the removal of the petrol subsidy, but concerns remain over whether the increased revenue is translating into improved living conditions for citizens.
FAAC distributions rose from N10.09 trillion in 2023 to N15.26 trillion in 2024 and N21.90 trillion in 2025. The 36 states also received N4.54 trillion in the first six months of 2026, according to figures cited by The PUNCH.
However, the increase in revenue has been accompanied by high inflation and a sharp depreciation of the naira, which have raised the cost of government projects, salaries, imported equipment and debt servicing.
Data from BudgIT showed that total subnational expenditure increased from N9.49 trillion in 2023 to N15.63 trillion in 2024, while capital expenditure rose from N4.06 trillion to N7.63 trillion.
Despite the increase in capital spending, several states recorded low levels of budget implementation in the second quarter of 2026.
The figures have raised questions about how effectively states are converting increased FAAC allocations into infrastructure and essential services such as healthcare, education, water supply and rural roads.
Experts and civil society groups have therefore called for greater transparency and accountability in the management of state revenues.
They urged governors to publish details of monthly FAAC receipts, expenditure and major contracts, while ensuring that capital projects are independently monitored and delivered as planned.
The increased allocations, analysts say, should translate into measurable improvements in citizens’ welfare rather than simply higher government spending.
With states now receiving substantially more revenue than before the subsidy removal, the key question is whether the additional funds are being converted into better services and tangible development for Nigerians.
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