In the 2025 fiscal cycle, several Nigerian states landed at the bottom of the Federation Account Allocation Committee (FAAC) distribution chart, receiving comparatively modest disbursements. Data compiled from FAAC reports reveal that states with constrained industrial activity and limited oil revenue derivation saw the lowest federal inflows.
Unlike larger, economically diverse states, these bottom-tier recipients largely depend on shared federal coffers to support government functions, finance recurrent expenditures, and fund capital projects. Their fiscal shares comprise statutory allocations, Value Added Tax (VAT) receipts, and contributions from the Electronic Money Transfer Levy (EMTL). Oil-producing states also benefit from the 13% derivation component, but most states at the lower end of this list lack this advantage.
What Determines FAAC Distribution?
FAAC allocations are calculated from four principal revenue streams:
- Net Statutory Allocation: Funds allocated per constitutional formula.
- Net VAT Receipts: Federal VAT revenue is shared among the three tiers of government.
- 13% Oil Derivation: Paid only to oil-producing states.
- Electronic Money Transfer Levy (EMTL): A growing contribution derived from electronic transactions.
For states near the bottom of the FAAC table, statutory and VAT allocations form the bulk of their federal inflows, while derivation revenue remains absent. EMTL, though smaller, is gradually increasing in share across all states.
The Bottom 10 States by FAAC Allocation in 2025
Here’s how Nigeria’s 36 states fared in FAAC receipts for 2025, ranked from 10th lowest to lowest:
- Yobe State — ₦155.20 billion
- Taraba State — ₦153.33 billion
- Nasarawa State — ₦149.67 billion
- Kwara State — ₦145.93 billion
- Osun State — ₦144.94 billion
- Ebonyi State — ₦139.10 billion
- Gombe State — ₦136.44 billion
- Cross River State — ₦130.84 billion
- Ekiti State — ₦130.30 billion
- Ogun State — ₦124.19 billion
Highlights from the Allocation Figures
- Yobe State recorded a total FAAC allocation of ₦155.20 billion in 2025, marking a notable increase from ₦96.53 billion in 2024 — a surge of nearly 61%.
- This rise was mainly driven by strengthened statutory and VAT inflows, though the state remains among the least funded nationally.
- The bulk of FAAC receipts for many of these states stems from statutory and VAT allocations, with EMTL providing supplementary support.
Fiscal Implications for Low-Revenue States
With most of these states lacking significant oil production and possessing relatively modest consumption bases, revenue generation challenges persist. This dynamic underscores wider fiscal disparities across Nigeria’s sub-national governments, as resource distribution continues to be shaped by federal revenue formulas that favour larger, more economically active states.
