Amid Deepening Poverty, FG, States’ Revenue Surges 14.2% in 2026

Emmanuel Addeh in Abuja 

The federal, state and local governments recorded a 14.2 per cent increase in revenue from the Federation Account Allocation Committee (FAAC) in the first two months of 2026 compared to the same period in 2025, even as poverty indicators continue to point to worsening economic conditions for households across the country.

Official data from FAAC seen by THISDAY showed that while disbursements for January and February 2025 stood at N1.703 trillion and N1.678 trillion respectively, bringing total allocations for the first two months of 2025 to N3.381 trillion, in contrast allocations rose to N1.969 trillion for January and N1.894 trillion for February 2026, resulting in a combined total of N3.863 trillion.

This represented an increase of N482 billion, or about 14.3 per cent year-on-year (YoY) growth in net distributable revenue to the three tiers of government.

In January 2026, the federal government received N653.5 billion, states received N706.4 billion, and local government councils got N513.2 billion, reflecting stronger statutory revenue performance and improved federally collected revenue streams.

Besides, January 2025 saw total FAAC allocation of N1.703 trillion, while January 2026 rose to N1.969 trillion. February 2025 stood at N1.678 trillion, compared to N1.894 trillion in February 2026, showing consistent expansion in nominal allocations across all tiers of government.

For context, since 2022, revenue accruals to the three tiers have more than doubled. From N9.18 trillion shared among them in 2022, the figure rose to N10.9 trillion in 2023, jumped to N15.26 trillion in 2024, and hit N18.54 trillion between January and October 2025.

However, this upward trajectory in government revenue has continued to exist alongside persistent and deepening economic hardship among Nigerian households. According to the World Bank’s Nigeria Development Update, recent macroeconomic reforms, including the removal of fuel subsidies and exchange rate unification, have contributed to significant inflationary pressures and income shocks.

The report estimated that approximately 15 million Nigerians were pushed into poverty between 2023 and 2024 alone, reflecting the immediate welfare cost of adjustment policies despite long-term reform objectives.

Besides, the National Bureau of Statistics (NBS) before it stopped publishing its Multidimensional Poverty Index,  the most comprehensive national poverty assessment available in the country, estimated that about 133 million Nigerians, or roughly 63 per cent of the population, lived in multidimensional poverty.

This means they face overlapping deprivations in education, healthcare, housing, sanitation, and access to basic infrastructure. While a more recent full national update has not yet been released, subsequent inflation trends and cost-of-living pressures strongly suggest that conditions have not improved materially.

Globally, the World Bank continues to classify Nigeria among countries with the largest populations of extremely poor people in the world. Its poverty and inequality assessments point to structural weaknesses in productivity, heavy reliance on informal employment, and persistent inflation as key drivers sustaining poverty levels despite fiscal expansion and rising government revenues.

The contrast between rising FAAC allocations and worsening poverty conditions underscores a structural imbalance in Nigeria’s economic system. Between January and February 2025 and the same period in 2026, total net disbursements to all tiers of government increased by over 14 per cent. Yet during the same period, inflation remained elevated, food prices rose sharply, and real household incomes continued to decline, eroding purchasing power across large segments of the population.

Therefore, while higher FAAC inflows have provided increased fiscal space for federal, state, and local governments, the translation of these resources into improved welfare outcomes remains limited.

This structural constraint has widened the gap between macro-fiscal performance and lived economic reality. On one hand, government revenue distribution is improving in nominal terms, supported by stronger statutory inflows and other federally collected revenues. On the other hand, poverty levels and living standards continue to deteriorate, reflecting weak transmission from public finance gains to household welfare, the review indicated.