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Big money, small impact: Governors face fire over N9tn FAAC windfall

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Despite receiving an estimated N9tn in Federation Account Allocation Committee inflows in 2025, state governors are facing mounting criticism from labour unions, civil society groups and opposition parties over what many describe as a widening gap between soaring revenues and limited improvements in citizens’ welfare.

FAAC allocations to states surged by over N2tn in one year, according to an analysis of Federation Account disbursement data published by the National Bureau of Statistics and collated by The PUNCH, highlighting the scale of the revenue windfall that flowed to subnational governments in 2025 amid higher federation inflows.

The sharp rise has triggered criticism from organised labour and opposition political parties, with the Nigeria Labour Congress warning that higher allocations have failed to deliver meaningful improvements in citizens’ welfare due to weak governance, misplaced priorities, and corruption at the state level.

Civil society organisations have also faulted state governments, accusing them of mismanaging the inflows and failing to translate increased revenues into visible development outcomes, while calling for stronger accountability and oversight.

Economists, meanwhile, say the surge has expanded states’ fiscal space but caution that heavy dependence on federally shared revenue and poor revenue management continue to undermine sustainable development at the subnational level.

The Federation Account disbursement data show that state governments received a total of N7.315tn from the Federation Account Allocation Committee in 2025, compared with N5.186tn in 2024. The year-on-year increase of roughly N2.13tn represents a jump of about 41 per cent in direct FAAC allocations to states.

When the constitutionally mandated 13 per cent derivation revenue is added, total inflows attributable to states climbed to N8.934tn (about N9tn) in 2025, up from N6.533tn in 2024, a rise of N2.4tn or 36.74 per cent.

This surge came against the backdrop of a sharp expansion in total FAAC distributions. Aggregate allocations to the three tiers of government, including derivation, rose from N15.259tn in 2024 to N21.897tn in 2025.

States therefore captured a substantial share of the overall increase, both in absolute terms and as a proportion of total federation revenues. Without the 13 per cent derivation component, states’ N7.315tn allocation in 2025 accounted for about 33.4 per cent of the N21.897tn total FAAC disbursement for the year, compared with roughly 34.0 per cent in 2024.

When derivation revenue is included, total state-linked receipts of N8.934tn represented about 40.8 per cent of total FAAC disbursements in 2025, down from around 42.8 per cent in 2024, indicating that while inflows grew in nominal terms, their relative share declined as allocations to all tiers expanded.

A closer look at monthly disbursements shows that state allocations improved steadily throughout 2025. States received N498.50bn in January, well above the N396.69bn recorded in January 2024.

Monthly allocations continued to trend higher, peaking at N727.17bn in October before easing to N601.73bn in December. By contrast, only two months in 2024 recorded allocations above N500bn, with the highest monthly figure being N549.79bn in December.

By the end of June 2025, states had already received over N3.32tn, compared with about N2.33tn in the first half of 2024, easing short-term liquidity pressures, particularly for states with heavy wage bills and debt service obligations.

Derivation revenue also played a critical role. In 2025, derivation payments rose to N1.619tn from N1.347tn in 2024, an increase of about N272bn or just over 20 per cent. Monthly derivation inflows were especially strong in September 2025, when oil-producing states shared N183.01bn, compared with N99.47bn in September 2024.

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Despite the surge, states did not disproportionately outpace other tiers. Federal Government allocations rose from N4.951tn in 2024 to N7.613tn in 2025, while local government allocations increased from N3.774tn to N5.351tn.

Nevertheless, the impact on states is particularly significant given their responsibility for delivering education, healthcare, and infrastructure. The additional N2.4tn received in 2025 alone is equivalent to nearly half of what states received from FAAC in total in 2024.

The 10th edition of the BudgIT State of States Report, titled ‘A Decade of Subnational Fiscal Analysis: Growth, Decline and Middling Performance’, revealed that over 30 states rely heavily on FAAC allocations.

An executive of BudgIT said on Channels Television’s Politics Today programme, “At least thirty states, excluding Lagos, Ogun, and Enugu, relied on FAAC for more than sixty per cent of their recurrent revenue. Lagos remains an outlier, but Ogun and Enugu also seem to be performing quite well.

“In total, 31 states depended on FAAC for at least 80 per cent of their current revenue, which shows just how challenging the fiscal situation has become for many of them.

“For example, Lagos’s FAAC allocation rose from N4.24bn to N11.38bn, a massive increase that highlights how significant federation account transfers have become within a single fiscal year. Still, credit should go to the states that recorded strong year-on-year growth, as well as those that grew consistently over the ten-year period we reviewed.”

The report added that 29 states relied on FAAC receipts for at least half of their total revenue, 28 relied on it for at least 55 per cent, and 21 relied on it for over 70 per cent.

The BudgIT executives expressed concern that rising FAAC inflows were discouraging states from expanding internally generated revenue. This is “concerning because the more FAAC money states receive, the less incentive some of them have to develop their own internal revenue sources”.

They noted that “the proportion of IGR within total recurrent revenue declined slightly from 25.27 per cent in 2023 to 20.27 per cent in 2024, indicating continued dependence on federal transfers”.

The Managing Director of Optimus by Afrinvest, Dr Ayodeji Ebo, said, “These revenues are volatile and largely outside state control, making budgets vulnerable to oil price shocks. Over time, this approach also discourages ingenuity, as states become dependent on external inflows rather than building durable local revenue sources.”

A development economist and Chief Executive Officer of CSA Advisory, Dr Aliyu Ilias, said subnational governments are creating challenges for the federation through how they manage FAAC allocations.

He suggested “counterpart funding,” where states that increase their IGR receive proportional benefits, warning that without incentives, states would continue to rely heavily on Abuja. Ilias said, “While FAAC allocations are at unprecedented levels, they are not necessarily translating into improved living standards.”

NLC speaks

The country’s biggest labour union said rising FAAC allocations have failed to deliver meaningful benefits to citizens, blaming weak governance, misplaced priorities, and persistent corruption at the state level.

“Very few states are doing well in terms of how they deploy what they receive,” Assistant Secretary-General of the NLC, Onyeka Christopher, told The PUNCH. “The idea behind federal allocations is to bring the government closer to the grassroots, but unfortunately, in many states, this has not translated into the desired results for well-known reasons.”

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The NLC added that, “Once people know there are no consequences, they will continue to steal public funds,” warning that kleptocracy continues to undermine development. “For FAAC to truly benefit the people, the issue of kleptocracy must be addressed. What are the EFCC and ICPC doing?” it asked.

CSOs react

Chairman of the Centre for Accountability and Open Leadership, Debo Adeniran, described subnational governments as “meddlesome interlopers”.

“Because we have been so complacent, we in the civil society, and maybe the media, have not been following the money from the point of release to the point of expenditure,” he said.

“The increase in allocations to states has just increased the financial opportunity for the state governors, not percolating to the level of the people that are supposed to be the final recipients of government charities,” Adeniran added.

The Executive Director of CISLAC, Auwal Musa Rafsanjani, said, “There’s no physical, verifiable, tangible evidence to show that the monies the governments are receiving are touching lives in terms of healthcare, electricity, physical infrastructure, or even agriculture.”

“What you see in the states is that these monies are collected, but it is about decamping, defections, and strategising for 2027,” he said.

Opposition parties lament

As federal allocations to states continue to rise, opposition parties, civil society actors and government officials across several states have expressed sharply differing views on whether the increased revenue has translated into tangible development and improved living conditions for citizens.

In Lagos State, the Chairman of the opposition African Democratic Congress, George Ashiru, said rising federal allocations and internally generated revenue had failed to ease hardship among residents.

According to him, inflationary pressures triggered by federal policies have outweighed gains from increased funding.

“Rents have gone up between 200 and 400 per cent in many areas. Social services have not matched inflationary trends, while infrastructure development still focuses on legacy projects instead of overcrowded inner-city areas,” Ashiru said.

He added that ongoing demolitions appeared to favour high-end housing projects, while public schools, healthcare facilities, intra-city roads and the overall cost of governance continued to suffer neglect.

The Peoples Democratic Party in Sokoto State rated the current development in the state as zero when compared to the huge allocations received from the federal government.

The spokesman of the party in the state, Hassan Sahabi Sanyinnawal, while speaking with our correspondent on the telephone, said the state government, led by Governor Ahmad Aliyu of the All Progressives Congress, only concentrates on two out of the 23 local government areas in the state.

“There is nothing on the ground to show for the huge allocation. We have 23 LGs in the state, but there is absolutely nothing going on in 21 LGs. In the two LGs within the metropolis, they are busy doing roundabouts, street fencing, and beautification.

“They did not do anything that the people of the state needed. Water is no longer running in the metropolis, the health sector is not getting attention, our education is not getting the necessary attention, among many others, but they are beautifying the metropolis.

“The beautification has no economic impact on the people of the state. They need to do better when you compare it with the money being received now,” he added.

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On his part, the Kano State Chairman of the Social Democratic Party, Ali Shettima, said the absence of clear information on state allocations made it difficult to carry out a fair assessment of the government’s performance.

“I don’t even know how much is allocated to the state. I can’t give an accurate assessment based on something I don’t know,” he said.

In Plateau State, the Chairman of the Alternative Democratic Party (ADP), Bitrus Boyi, questioned the visibility of development projects despite claims of increased federal allocation.

“If truly there has been an increment in federal allocations, it has not translated to development. Most of the projects we see are funded by development partners,” he said, urging the state government to ensure that increased revenue benefits residents.

Similarly, the Peoples Redemption Party (PRP) in Bauchi State accused the state government of prioritising “luxury and white elephant projects” over education and healthcare.

The party’s chairman, Abbas Abba, described the condition of schools and hospitals as “poor and alarming,” alleging that government spending focused more on propaganda than sustainable impact.

However, the ruling Peoples Democratic Party in Bauchi rejected the claims, insisting that development was evident in regular salary payments, road projects, healthcare revitalisation and school renovations across the state.

In Zamfara State, politicians Alhaji Musa Yankuzo and Mohammed Sani said the state had little to show despite higher federal allocations, accusing governors of mismanaging funds for selfish interests rather than development.

The ADC in Kebbi State also dismissed the achievements of Governor Nasir Idris, with the party’s chairman, Sufiyanu Bala, citing unemployment, dilapidated schools, out-of-school children and weak healthcare services as evidence that increased allocations had failed to improve living standards.

In Gombe State, the PDP said development remained “one-sided,” alleging that the ruling APC focused mainly on capital projects with little direct impact on citizens’ welfare.

“The essence of democracy is to improve education, health, water supply and security. That is not what we are seeing,” PDP spokesman Abdulkadir Ahmad said.

Contrasting views

In contrast, the Labour Party in Nasarawa State commended the Governor Abdullahi Sule-led APC government for infrastructure development, particularly the completion of the over N16bn Lafia flyover and ongoing projects in Akwanga, Keffi and Karu.

LP chairman Alexander Ombugu praised the administration’s prudence and commitment, urging the governor to do more. President Bola Tinubu had commissioned the Lafia flyover in June 2025 alongside other projects, including roads, a new secretariat complex and a solar mini-grid.

In Kwara State, the PDP and APC traded blame over the impact of rising federal revenue.

The PDP accused the state government of concentrating spending in limited areas of Ilorin, the capital city, and neglecting insecurity, workers’ welfare and rural communities.

“We have had huge allocations since 2019, yet the people have benefited close to nothing,” PDP spokesman Olusegun Adewara said, calling for improved security, better wages and investment in the informal sector.

The APC dismissed the claims, insisting that the AbdulRahman AbdulRazaq administration had deployed resources across infrastructure, education, healthcare and social investment programmes in all senatorial districts.

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Trump sends envoys to Moscow, Kyiv with new plan to ‘end war’

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US President Donald Trump said Friday he is sending envoys Steve Witkoff and Jared Kushner to Moscow and Kyiv with a plan to end more than four years of war in Ukraine.

The move marks Washington’s latest bid to break a diplomatic stalemate in Europe’s deadliest conflict since World War II, which began with Russia’s full-scale invasion of Ukraine in 2022.

A senior Ukrainian official told AFP the envoys were due in Kyiv on Sunday.

US outlet Axios reported they would meet Russian President Vladimir Putin in Moscow on Saturday, and then President Volodymyr Zelensky in Kyiv on Sunday. The Kremlin declined to comment.

Trump told reporters that the two negotiators would seek to gauge whether progress towards peace was possible.

Peace efforts have stalled due to Washington’s war with Iran, while Moscow and Kyiv have intensified long-range attacks, driving up civilian casualties to levels not seen since the start of fighting.

“I sent Steve Witkoff and Jared Kushner, two great negotiators. They’ve done a great job, and we sent them over to see whether or not we can get something done. And there may be a good chance that we’ll do it,” Trump said.

“They’re bringing with them a proposal to end the war,” he said.

The US president would not say whether the plan involved Ukraine ceding territory as he has previously suggested, but added: “We have an idea for peace.”

It will be the first time that Trump’s businessman friend Witkoff and son-in-law Kushner have visited war-torn Kyiv since Trump returned to office last year with a pledge to resolve the conflict.

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Witkoff and Kushner, who have been involved in negotiations for ceasefires in Gaza and Iran, have travelled repeatedly to Moscow in previous attempts at diplomacy.

– Grinding war –

The renewed push for diplomacy comes as Russia and Ukraine pummel each other with long-range missile and drone attacks.

Just hours before Trump’s announcement, a Russian drone struck the headquarters of Ukraine’s SBU security service in central Kyiv, according to Zelensky.

The strike, which Zelensky said was aimed at the office of the agency’s acting chief, was the first on its headquarters since the start of the invasion.

Despite the unprecedented nature of the strike, the Ukrainian president proposed observing a ceasefire with Russia for the duration of the US envoys’ trip.

“There will be no airstrikes on our part, and Russia must reciprocally ensure a ceasefire — without its own airstrikes — for the duration needed to conduct these talks,” he said in his evening address.

Russia did not immediately comment on the proposal.

Hours later, Oleksandr Ganzha, head of the Dnipropetrovsk regional military administration, said a Russian strike killed four people and wounded five in the southeastern city of Kamianske.

Zelensky had said on Wednesday that Russian airspace would be “completely unsafe” and filled with Ukrainian drones as long as Moscow continued its war.

Witkoff and Kusher’s trip comes more than week after a rare visit to Moscow by CIA director John Ratcliffe, who warned Russia against any attack on NATO member states, according to US media.

Earlier this week, the United States welcomed the Russian finance minister at a G20 gathering in North Carolina.

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AFP

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Hamilton seeks to become first black driver to win for Ferrari in Italy

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Lewis Hamilton says he has been reflecting on the significance of potentially becoming the first black Formula 1 driver to win for Ferrari at the Italian Grand Prix as he targets his maiden victory for the team at Monza this weekend.

The seven-time world champion, in his second season with Ferrari, said the possibility of breaking new ground at the team’s home race had been among his thoughts ahead of the Italian Grand Prix.

According to Sky Sports News on Thursday, Hamilton had already won at Monza five times in his career, but none of those victories came in Ferrari colours.

“Winning in Monza for the first time with Ferrari is something I’ve witnessed Charles [Leclerc] win in 2019, when I was on the podium with him. But to do it while I’m here would be phenomenal.

“And the thought of if I did do that, probably I would be the only black driver to ever do that for Ferrari in Italy probably in history, maybe, and so just like a lot of those thoughts have been through my mind,” Hamilton said.

Hamilton’s first Ferrari Grand Prix victory came in Barcelona in June, boosting his hopes of challenging for the championship in his second campaign with the Italian team.

He currently trails Mercedes’ Kimi Antonelli by 59 points with 11 rounds remaining, while his prospects at Monza have been further strengthened by Antonelli’s grid penalty for exceeding his permitted engine-part allocation.

Reflecting on the significance of another potential victory at the circuit, Hamilton said: “I’ve really thought coming into this weekend, as I pondered, just thinking of the sheer magnitude of the concept that I’m coming to this Grand Prix, I didn’t even know that I had I was equal with Michael [Schumacher] on [five Monza] wins, for example.”

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“But the thought that there’s a first ahead of me, in the sense that potentially, if I was to win, you go into new territory.

Hamilton also acknowledged the pressure that comes with racing Ferrari at its home event, where thousands of passionate supporters known as the Tifosi are expected to attend.

“The pressure is high. You also want to deliver for the team. There’s all those people at the factory, many of them will get to come to this race, the Tifosi, who come in huge numbers and the passion is unmatched, and you want to deliver for them as well,” he said.

Hamilton will also have his mother at Monza, adding another personal dimension to the weekend.

The F1 hero said, “And my mum’s here this weekend because I don’t think she’s been to Monza, but also particularly on a Ferrari weekend. I wanted her to experience that and you know bring any of the lucky dust she can bring.”

Engine upgrade won’t recover ‘whole gap’

Hamilton’s chances of challenging for victory have also been boosted by Ferrari’s latest engine upgrade, with the team confirming it had used its second permitted opportunity of the season to improve its power unit.

Ferrari’s engine deficit to Mercedes has been one of its weaknesses this season, and Hamilton said the upgrade could help narrow the gap, although he did not expect it to eliminate the deficit entirely.

“Every little helps, and I think up until this point of the year we’ve been losing, even in the last race on such a short circuit we were losing four tenths a lap through the race. That’s a huge deficit and we’ve carried that through the year to this point.

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He praised the work being done by Ferrari’s staff, saying he had noticed a greater sense of direction within the team compared with his first season.

“What I can say is I’m really proud when I go back to the factory and see how hard everyone is working. They’re really just heads down, and everyone’s so enthusiastic.

“I see a different focus this year to last year. Last year, I felt like there wasn’t really a north star. We were doing the best we could, but not really knowing exactly what we were trying to aim for. Now we have a north star, and we know where we need to work towards,” Hamilton said.

Hamilton said the latest upgrade represented progress but acknowledged that Ferrari still had ground to make up.

“I think they’ve done a tremendous job to really pull together and deliver. This is a step forward, it’s not the whole gap that we need but we knew that would be the case.

“But to see bits coming each weekend, adding to the car, it’s exciting to see that we are pushing and I strongly still believe that we’ve got what it takes to win,” he concluded.

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Lagos denies woman’s hospital delay, POS extortion claims

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The Lagos State Ministry of Health has debunked claims that officials of Randle General Hospital delayed treatment and attempted to extort money from a vulnerable patient, saying the woman who made the allegation also gave the wrong age of her daughter.

The ministry, in a statement signed by the Commissioner for Health, Prof. Akin Abayomi, on Thursday, said its investigation established that the patient, Alimat Oshodi, is 21 years old and not 13 as claimed in a viral social media post.

According to the ministry, Alimat first presented at the hospital’s Mother and Child Centre on August 4, 2026, as an emergency case requiring immediate medical intervention.

It said she received life-saving emergency care under the Comprehensive Emergency Obstetrics and Newborn Care programme at no cost to her family and was discharged on August 11.

“The initial value of the emergency care provided was ₦75,950, free of charge,” the statement said.

The ministry said Alimat returned to the hospital on August 27 for follow-up care and investigations, after which the hospital’s Social Welfare Unit provided ₦5,000 on August 28 and another ₦13,000 on August 31 towards subsequent investigations.

It added that the patient contributed ₦10,000, while the total state assistance provided to her stood at ₦93,950.

Explaining the controversy over a Point of Sale transaction, the ministry said the patient sought a refund of the ₦13,000 already paid on her behalf by the Hospital Welfare Fund after an NGO offered to cover the cost.

“She was informed that Social Welfare payments could not be refunded at the Paypoint in accordance with established procedure,” the ministry said.

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The ministry said the case demonstrated that the state’s social health protection mechanisms had been applied to ensure that financial difficulties did not prevent the patient from receiving necessary care.

It listed the mechanisms as Ilera Eko, hospital-based Social Welfare support and the Comprehensive Emergency Obstetrics and Newborn Care programme.

“This investigation has established the facts surrounding the incident and confirms that the State’s social health protection mechanisms work seamlessly and, in this case, provide timely support at no cost to the patient when she required emergency care to the tune of ₦93,950,” Abayomi said.

He said the findings were contrary to the impression created by the social media post that a Lagos State government hospital was trying to delay access to care and extort money from a vulnerable patient.

PUNCH Online had reported that controversy followed a social media post by Mrs Oshodi, who alleged that hospital officials delayed treatment and demanded money from her daughter, whom she claimed was 13 and in need of urgent medical intervention.

The post went viral on social media, prompting the Lagos State Ministry of Health to investigate the circumstances surrounding the patient’s treatment.

The ministry said its investigation established that the patient was 21 and had received emergency treatment as well as subsequent financial assistance from the government.

It added that it was improving payment processes across public hospitals through the rollout of the Smart Health Information Platform and regular audits of fee collection practices.

The Lagos State Sports Commission also intervened in the case of her daughter, a young squash player, Mariam Oshodi, who missed a tournament after she complained that some officials of a local government allegedly locked up her shop where her daughter’s sports equipment was kept.

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The Director-General of the commission, Lekan Fatodu, on Wednesday met with Mrs Oshodi and her daughter, following the viral video in which she expressed frustration over the circumstances that prevented her daughter from participating in a regional tournament.

Mariam, who represents Lagos State in squash in the U-15 category, was reportedly unable to assess her squash racket after the shop where it was kept was locked by officials of Surulere Local Government.

According to the mother, the officials usually cite environmental concerns for such actions, despite their efforts to keep the surroundings clean.

In the viral TikTok video, Kafayat alleged that while she was out of town, her daughter took some of the medals she had won in previous competitions to the local government office in an attempt to convince the officials of the importance of the racket to her sporting career.

She alleged that the officials nevertheless refused to give the young athlete access to the shop.

Responding to the concerns, Fatodu assured the family that the commission would immediately engage the government entity involved in the incident to prevent a recurrence.

He also outlined mid- and long-term measures, including the activation of a robust policy framework to mitigate similar circumstances, improved communication channels between the commission, parents and young athletes, and increased awareness among ministries, departments and agencies on the need to protect and support emerging sporting talents.

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