Nigeria’s fiscal distribution remained heavily concentrated among a handful of states in the first quarter of 2026, with Lagos state emerging as the highest recipient of allocations from the Federation Account Allocation Committee (FAAC).
Data compiled from official records showed that the 10 highest-earning states accounted for 40.1 per cent of the total net FAAC allocations distributed to the 36 states during the January to March period, underlining the persistent disparity in revenue receipts across the federation.
Lagos led the pack with a cumulative net allocation of about N200.21 billion during the quarter, driven largely by its sizeable share of Value Added Tax (VAT) revenues and robust economic activities. Oil-producing states, including Delta, Rivers, Akwa Ibom and Bayelsa, also featured prominently among the top recipients, benefiting significantly from the 13 per cent derivation revenue accruing to mineral-producing states.
Other states in the top 10 bracket included Oyo, Jigawa, Katsina and Borno, reflecting a mix of economic size, population and statutory allocation dynamics. Despite maintaining dominance, the combined share of the top 10 states represented a slight decline compared to previous periods, suggesting a modest spread in allocations to other states across the country.
Analysts say the concentration of FAAC receipts among a few states highlights Nigeria’s continued dependence on federally distributed revenue, particularly among sub-national governments with limited internally generated revenue (IGR) capacity. The trend also underscores the fiscal advantages enjoyed by economically vibrant and oil-producing states.
Recent FAAC distributions have been buoyed by increased statutory revenues, higher VAT collections and improved earnings from electronic transfer levies, contributing to growth in allocations across all tiers of government.
