FAAC Allocation Disparity: Five States Collect N317.5bn, Exceed 20 Others Combined
The five states with the highest Federation Account allocations in May 2026 collectively received N317.47 billion, more than the combined N310.13 billion shared by 20 states with the lowest allocations, underscoring the persistent and wide disparity in federally distributed revenues among Nigeria’s 36 states.
A THISDAY analysis of figures contained in the June revenue allocation report of the Office of the Accountant General of the Federation (OAGF), made public this August, showed that Rivers, Delta, Akwa Ibom, Lagos and Bayelsa were the five biggest beneficiaries of Federation Account allocations for the month of May 2026. Rivers State received the highest net allocation at N70.32 billion, followed by Delta State with N66.44 billion, Akwa Ibom with N62.09 billion, Lagos with N60.35 billion, and Bayelsa with N58.28 billion. Combined, the five states received N317.47 billion during the month.
By comparison, the 20 states occupying the bottom of the allocation table for the same month collectively received N310.13 billion, meaning the five highest-earning states alone collected roughly N7.34 billion more than 20 states put together, a gap that highlights the extent to which Nigeria’s revenue-sharing structure favours a small cluster of states over the majority of the federation.
The disparity is rooted in the structure of Nigeria’s revenue-sharing system, under which federally collected revenues are pooled into the Federation Account and distributed monthly among the federal government, state governments and local governments through the Federation Account Allocation Committee (FAAC). The distributable pool is made up of statutory revenue, Value Added Tax (VAT) receipts and other revenue streams, with deductions, interventions and other statutory obligations factored in before the final amounts are shared. Consequently, states with significant oil and gas production benefit from additional derivation revenue on top of their standard allocations, while states with larger economic activity and higher value-added contributions tend to receive a bigger share of the VAT component specifically.
This structural formula explains why oil-producing states in the Niger Delta region, particularly Rivers, Delta, Akwa Ibom and Bayelsa, consistently dominate the top of the monthly allocation table, buoyed by the 13 per cent derivation principle enshrined in the country’s revenue-sharing framework, which channels a portion of oil revenue directly back to producing states. Lagos, meanwhile, continues to benefit from its outsized share of VAT collections given its status as Nigeria’s commercial hub, allowing it to consistently rank among the top allocation recipients despite not being a major oil producer.
The persistent gap between high-earning and low-earning states has long fuelled debate among economists, fiscal federalism advocates and state governments themselves over whether Nigeria’s current revenue allocation formula adequately serves states with smaller economies or limited natural resource endowments. Critics of the existing structure argue that it entrenches regional economic inequality, leaving many states heavily dependent on monthly FAAC disbursements to meet basic obligations such as salaries and infrastructure spending, while resource-rich and commercially active states enjoy significantly larger fiscal headroom. The figures for May 2026 add fresh data to this long-running conversation, as stakeholders continue to call for a review of the revenue-sharing formula to achieve a more balanced distribution of national resources across Nigeria’s 36 states.
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