₦airaland Forum

…Akwa Ibom, Lagos, and Edo top FAAC recipients

Nigeria’s sub-nationals are yet to break free from federal lifelines as new data show that Jigawa, Taraba and Sokoto are states that are overwhelmingly dependent on the Federation Account Allocation Committee (FAAC).

An Agora Policy report reviewed by BusinessDay shows that FAAC disbursements accounted for 73.8 percent of total revenues of 30 states in the first half (H1) of 2025, highlighting the structural weakness of states’ finances two years after fuel subsidies were scrapped and oil receipts swelled their purse.

Of the N6.05 trillion realised in H1 2025, N4.46 trillion came from FAAC allocations, while merely N1.59 trillion was from the internally generated revenue (IGR). The IGR revenue was just 26.2 percent of the total.

Only Lagos broke the trend, with federal transfers representing less than a third of its N1.28 trillion total revenue.

“Akwa Ibom, Lagos, and Edo topped the list of states that received more FAAC revenue than projected, while Osun, Zamfara, and Kaduna recorded the highest shortfalls compared to their FAAC projections,” the policy think-tank said.

A total of 11 states, including Ekiti and Cross River, beat their IGR targets, but 19 fell behind. Jigawa, Taraba, and Sokoto were among the weakest performers, reflecting weak tax compliance systems and limited economic activity outside federal transfers.

Ayo Teriba, CEO of Economics Associates (EA), attributed the weakness in IGR to the inability of states to “exploit the opportunities they have within,” stressing that investment is key to unlocking revenue.

“How many of them have an intrastate metro service, a rail line that unlocks internally generated revenue. Lagos is the exception,” Teriba said. ”Having this will create employment and generate revenue.”

The economist noted that while not all the states have the resources to exploit, maximising the little could be enough to attract investors.

Samuel Sule, CEO of Renaissance Capital Africa, said: “More compliance and higher state taxes and duties will reverse this trend.”

Tax structure entrenches dependence

Analysts say the root of the problem is Nigeria’s fiscal architecture.

“Maybe the states are not doing enough to generate IGR, but it’s because of the nature and structure of our tax system,” said Muda Yusuf, director-general of the Centre for the Promotion of Private Enterprise.

Corporate income tax, petroleum royalties, and value-added tax flow into the central pool before redistribution, leaving states reliant on pay-as-you-earn (PAYE) tax as their main lever.

“And some of those revenues that normally should have come directly to them are also paid to the central pool,” Yusuf added.

To plug leakages and broaden the tax base, Nigeria passed four new revenue laws scheduled to take effect in January 2026.

While the reforms are designed to protect low-income earners and strengthen collection, most revenues will still accrue to the centre, limiting the fiscal autonomy of states.

“Without reforming the tax assignment system, states will remain locked into a dependency cycle where FAAC allocations dictate fiscal outcomes,” warned a Lagos-based economist.

Infrastructure deficit

Beyond weak structural tax systems, infrastructure deficits deepen the challenge.

States without seaports, airports, or robust industrial clusters face narrower tax bases, leaving them unable to mimic Lagos, which generated more than N890 billion in IGR in the first half of 2025, more than the combined IGR of 25 states.

Source: https://businessday.ng/business-economy/article/jigawa-taraba-sokoto-top-faac-lifeline-dependent-states/#google_vignette

if if i suggest for the pourpose of efficiency these states Jigawa, Taraba and Sokoto should be merge to form one state

This is why our brothers from the north will do anything to stop any resource control bill. But then, Nigeria cannot continue like this. Everyone has to find a creative way to sustain itself. Nigeria has millions of arable lands and most of them are in the north. They are not putting this land into good use because of petrodollars.

My Northern brethren, is high time we embark on aggressive internal revenue generation.

raise your children well!!!

raise your children well!!!

raise your children well!!!

raise your children well!!!

raise your children well!!!


SO that Nigeria can have PEACE and move FORWARD

And na their politicians marry women pass with their useless bug tummy

Banditry has affect those state badly or let me say insecurity in the north has affect them more

After 65 years of independence. Rankadede is the order of the day.

The productive and parasites are well known. Let go together on agreement basis or divide

NewDigitalWorld:
Source: https://businessday.ng/business-economy/article/jigawa-taraba-sokoto-top-faac-lifeline-dependent-states/#google_vignette

Lagos is a blessed land with visionary leaders……thanks to Tinubu who laid the foundation for modern Lagos. Lagos is now the envy of all, even those that are not Yorubas with no ancestral root to Lagos want to always identify with the city of progressives……eko oni baje oo btw proudly Lagos

Redoil:
if if i suggest for the pourpose of efficiency these states Jigawa, Taraba and Sokoto should be merge to form one state

There are sovereign countries in this world that are poorer than this states, states do not exist for the sake of revenue generation alone what about political and social cultural preservation, sincrerly there is no state in Nigeria that is poor in the real sense of it, those state governments are only intellectually lazy to figure out how to generate wealth.

Pogba12:
My Northern brethren, is high time we work on embark on aggressive internal revenue generation.

Not until all these sharia law behaviors are eliminated.

Eliminate Sharia law and watch religious extremism and terrorism plummet, talents blossom, state revenues skyrockets , businesses flourish, new investments in currently dormant industries such as hospitality,tourism,lifestyle and culture come to life like a colossus.
The Arabs from Saudi and Qatar have understood this already and have taken advantage of it. The difference is clear. You the enlightened guys from the North needs to speak up boldly for the region.

Nothing new here. It's what we all know. Some states should not have been created , and to add salt to injury, some have been blessed with bad administrators from time immemorial.

SmartPolician:
This is why our brothers from the north will do anything to stop any resource control bill. But then, Nigeria cannot continue like this. Everyone has to find a creative way to sustain itself. Nigeria has millions of arable lands and most of them are in the north. They are not putting this land into good use because of petrodollars.

Resource control will not improve the lives of those in the SS, look at the conditions in places like Delta and Rivers, these states should be mini Dubai's by now. It is true however that the current system is not working, there is simply no incentive for the northern states to look inwards and start to use their huge land assets to produce products, when the governors are getting monthly allocations. The north should have no business at all with poverty, but their leaders are greedy and wicked

It is quite unfortunate that the mentioned states do not harness their potentials. 80,%of what the major cities are consuming comes from these states. Instate of the FG to channel enough resources to these farmers and to make these state secured from bandits and terrorists, the government is busy using the insecurity for their personal gain.
If you stop farm products from these states into the major cities , there will be great hunger in the country.

Jigawa state where I'm resident is a Sharia state where they don't sell alcohol only in military or police Baracks...

They don't allow non indigenous business to strive the next thing they try to frustrate you out of their land...

Lands are not sold to Churches... You have to fight before you can have a small place to build...

Until they start welcoming visitors to develop the state for them, they will totally depend on FAAC to survive

Pogba12 post= :
My Northern brethren, is high time we embark on aggressive internal revenue generation.

The irony is that the north is the richest part of Nigeria. The only thing they lack is infrastucture and good leadership. We are seeing encouraging changes though in Niger, kaduna and Nassarawa.


I can’t believe many people put Borno governor on a pedestal!

Redoil:
if if i suggest for the pourpose of efficiency these states Jigawa, Taraba and Sokoto should be merge to form one state

The federal government is trying to create additional states...

If the old ones are these weak financially, how will the new ones be? Though, I support the creation of the new states...

Toluwanise247:
Banditry has affect those state badly or let me say insecurity in the north has affect them more

or lack of birth control because they are just full of lazy youths that only depends on banditry but those people sponsoring them like El rufai won't say this.