Key points
- Finance Minister Taiwo Oyedele says monthly FAAC allocations have risen above N2tn.
- He attributed the increase to fuel subsidy removal and FX unification.
- FAAC disbursement reached a record N2.8tn in June 2026.
- Oyedele urged states to invest revenues in productivity, infrastructure and human capital.
- He called for a review of allocation formulas covering the 774 LGAs.
- The 2026 National Council on Finance and Economic Development retreat is expected to propose reforms on revenue mobilisation, debt sustainability and resource allocation.
Main Story
The Federal Government’s economic reforms have increased monthly allocations from the Federation Account to more than N2tn, up from an average of about N300bn under previous administrations, the Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, has said.
Oyedele disclosed this on Monday in Owerri while declaring open the 2026 National Council on Finance and Economic Development retreat, themed “Strengthening Fiscal Federalism for Equity, Sustainable Development and Economic Resilience in a Volatile Global Economy.”
The minister attributed the increase in distributable revenue to key decisions by President Bola Tinubu’s administration, particularly the removal of fuel subsidy and unification of the foreign exchange market. He said the reforms contributed to a record N2.8tn FAAC disbursement in June 2026.
Oyedele said the increased revenue had improved the ability of states to meet their salary obligations, noting that many states had struggled to pay workers under previous revenue conditions. However, he cautioned that higher allocations alone would not translate into prosperity without investments in local productivity, infrastructure, human capital and essential public services.
He urged state and local governments to reduce their dependence on monthly allocations by expanding internally generated revenue and developing their economies to attract investment and create jobs.
The minister also called for an urgent review of the revenue allocation formula to promote equity across the country’s 774 local government areas, while advocating stronger fiscal responsibility and debt sustainability frameworks.
Oyedele said the Federal Government had also expanded interventions aimed at cushioning the impact of its economic reforms, including cash transfers to 15 million vulnerable households and the NG-CARES programme.
The Issues
The rise in FAAC allocations provides additional fiscal space for the three tiers of government but also raises questions about how effectively states and local governments will convert increased revenues into sustainable economic development.
The continued dependence of many states on federation allocations remains a structural concern, particularly amid volatile global economic conditions. Improving internally generated revenue, strengthening accountability and ensuring productive use of public funds remain critical to sustaining the gains from the reforms.
What’s Being Said
Prof. Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy
“Ultimately, the federation cannot share its way into prosperity.”
Oyedele urged states to transform into economic platforms capable of attracting investment, supporting businesses and creating jobs rather than relying primarily on monthly allocations.
Gov. Hope Uzodimma, represented by Deputy Governor Chinyere Ekomaru
Uzodimma commended the Federal Government’s fiscal reforms but stressed the need for stronger revenue mobilisation and equitable resource allocation.
“Allocations must be equitable and must be built with resilience through diversification and prudent management of available resources.”
What’s Next
The three-day retreat is expected to generate recommendations on revenue mobilisation, fiscal responsibility, debt sustainability, economic diversification and improved resource allocation.
Stakeholders from the Revenue Mobilisation Allocation and Fiscal Commission, Office of the Accountant-General of the Federation, state Ministries of Finance, Central Bank of Nigeria and NNPC Ltd. are expected to contribute to the discussions.
Bottom Line
The sharp increase in FAAC distributions gives Nigeria’s states and local governments more resources to fund public services and development. But the Federal Government is warning that sustained prosperity will depend not on sharing more revenue, but on using the additional funds to expand productivity, strengthen local economies, attract investment and build long-term fiscal resilience.
