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FAAC bonanza: Govs face questions as payouts hit N47tn

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The 36 state governors are facing growing pressure to account for how they have spent public funds disbursed as revenue by the Federation Account Allocation Committee in the last three years, The PUNCH reports.

This scrutiny follows the revelation that the Federation Account disbursed about N47tn to the three tiers of government in the three years since the removal of petrol subsidy.

This was as the Federal Government, 36 states and 774 local governments shared a cumulative N93.216tn as revenue from the Federation Account between 2017 and 2025, with more than half of the amount distributed in the three years following the economic reforms introduced by the Federal Government in 2023.

These figures were disclosed in a document obtained by our correspondent from the Federal Ministry of Finance on Sunday.

It showed that N47.25tn, representing about 50.7 per cent of the N93.13tn shared during the period, was distributed between 2023 and 2025 alone, highlighting the sharp expansion in revenues following the removal of petrol subsidy, exchange rate reforms and increased revenue mobilisation.

But policy analysts, civil society groups and other critics say the increase in revenue has not translated into a corresponding improvement in the living conditions of Nigerians facing rising living costs, unemployment, poverty and inadequate public services.

In an interview with PUNCH, a policy analyst, Adebayo Abubakar, said the removal of subsidy had increased government revenues but argued that the additional funds had not always translated into spending that reflected the economic hardship facing Nigerians.

“Roads, bridges, drainage and other infrastructure remain important, but some governments appear to favour conspicuous projects while schools, healthcare facilities, water supply and other basic services receive inadequate attention,” he said.

The removal of petrol subsidy and other economic reforms introduced by the Federal Government in 2023 have triggered an unprecedented surge in revenue flowing into the Federation Account, with the 36 states and 774 local government areas receiving significantly higher allocations amid growing questions over how the windfall has translated into improved infrastructure, security and public services.

The sharp increase in Federation Account Allocation Committee payouts has, however, placed state governors under renewed scrutiny, as many Nigerians continue to grapple with high living costs, poor infrastructure and worsening insecurity despite the substantial growth in revenues available to subnational governments.

While some governors have linked higher FAAC receipts to road construction, bridges, healthcare, education, workers’ welfare and other projects, residents in some states said the increased revenue had not resulted in improved public services or reduced economic hardship.

Findings by The PUNCH showed that the Federal Government, states and local governments received about N47tn from the Federation Account in the three years following the reforms, exceeding the amount shared in the preceding six-year period and reigniting the debate over the benefits and consequences of the subsidy removal policy.

FAAC disbursements

The document showed that FAAC distributions rose from N5.64tn in 2017 to N21.90tn in 2025, representing an increase of about 288 per cent over the nine-year period.

Year-by-year, net FAAC stood at N5.64tn in 2017, N7.98tn in 2018, N7.85tn in 2019, N7.11tn in 2020, N8.12tn in 2021 and N9.18tn in 2022. It subsequently rose to N10.09tn in 2023, N15.26tn in 2024 and a record N21.90tn in 2025.

The development highlights the dramatic transformation in Nigeria’s federation revenue following the removal of petrol subsidy, reforms in the foreign exchange market and efforts to improve revenue mobilisation.

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It also exposes the limits of measuring Nigeria’s revenue growth in naira terms alone. While the removal of petrol subsidy, foreign exchange reforms and improved revenue mobilisation helped to push FAAC allocations sharply higher, a significant part of the increase reflects the devaluation of the naira.

For instance, Nigeria shared N7.98tn through FAAC in 2018, which, at the Central Bank of Nigeria exchange rate at the time, was equivalent to about $26bn. By 2025, the amount shared had risen almost threefold to N21.9tn. However, when converted at the CBN exchange rate for 2025, the allocation was worth only about $14.4bn.

In other words, while FAAC distribution increased by about 174 per cent in naira terms between 2018 and 2025, its dollar value fell by roughly 45 per cent, or about $11.6bn.

The comparison suggests that the apparent surge in federation revenue was driven not only by increased revenue generation and reforms, but also by the weaker naira, which translated dollar-denominated oil and other foreign currency earnings into substantially larger amounts of naira.

The document showed that net FAAC allocations stood at N5.64tn in 2017 and rose to N7.98tn in 2018, representing a 29 per cent increase. However, growth was not sustained in the following two years.

The distributable revenue fell by two per cent to N7.85tn in 2019. It declined further by 10 per cent to N7.11tn in 2020, reflecting the economic disruptions associated with the COVID-19 pandemic and developments in the oil market.

The distributable revenue, however, recovered to N8.12tn in 2021 and increased to N9.18tn in 2022. The document put the average annual growth rate for the pre-reform period at eight per cent. But the sharpest increase came after the reforms introduced in 2023.

Net FAAC rose to N10.09tn in 2023, representing a nine per cent increase. It then jumped by 34 per cent to N15.26tn in 2024 and expanded by another 30 per cent to a record N21.90tn in 2025.

This means the average annual growth rate accelerated from eight per cent in the pre-reform period to 24 per cent between 2023 and 2025. In effect, the pace of growth in distributable federation revenue was three times higher in the post-reform period than the average recorded before the reforms.

The figures also showed the extraordinary weight of the last three years in Nigeria’s federation revenue history. Of the N93.13tn shared between 2017 and 2025, the N47.25tn distributed between 2023 and 2025 alone exceeded the combined allocations recorded in several earlier years, meaning that every N2 shared over the nine-year period contained more than N1 distributed after the reforms.

Finance ministry speaks

The Federal Ministry of Finance, in its assessment of the reforms, said states and local governments had received substantially higher allocations, increasing the resources available to subnational governments for salaries, pensions, infrastructure and other public responsibilities.

The ministry said, “States and local governments received significantly higher allocations through the Federation Account, increasing the resources available to meet salaries, pensions, infrastructure and other responsibilities at the subnational level that benefit the people.”

It added that, compared with the monthly run-rate before the removal of petrol subsidy, “states received about N9.17tn in additional allocations from June 2023 to December 2025,” while local governments received about N6.66tn in additional allocations during the same period.

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Further analysis of tier-by-tier annual distribution figures for 2022 to 2025 showed that the Federal Government received N1.996tn in 2022, N3.749tn in 2023, N4.570tn in 2024 and N7.024tn in 2025, bringing its four-year allocation to about N17.34tn.

The states received N2.060tn in 2022, N4.179tn in 2023, N6.533tn in 2024 and N8.934tn in 2025, totalling about N21.71tn, while local governments received N1.285tn, N2.601tn, N3.774tn and N5.351tn respectively, amounting to about N13.01tn over the four years.

The figures showed that the states emerged as the biggest beneficiaries of the post-reform expansion in FAAC receipts. Their annual allocation jumped from N4.18tn in 2023 to N8.93tn in 2025, more than doubling within two years. In 2024, states received N6.53tn, exceeding the Federal Government’s N4.57tn allocation in the figures contained in the document.

A World Bank analysis similarly identified 2024 as a turning point when state governments received more from FAAC distributable revenues than the Federal Government, reflecting a structural shift in the pattern of federation revenue distribution.

The expansion in FAAC receipts has been linked largely to the fiscal reforms introduced by President Bola Tinubu’s administration after it assumed office in May 2023.

The reforms included the removal of petrol subsidy and changes to the foreign exchange regime, alongside efforts to improve tax collection and revenue remittances.

Earlier analysis by the Nigeria Extractive Industries Transparency Initiative had attributed the increase in federation revenue in 2023 to improved remittances following the removal of the petrol subsidy and the floating of the exchange rate.

The impact became more pronounced in 2024 and 2025 as monthly allocations crossed the trillion-naira mark with increasing regularity. For instance, the Federal Ministry of Finance announced that FAAC shared N1.354tn for June 2024 and N1.818tn for June 2025, reflecting the rising scale of revenues flowing into the Federation Account.

The N93.13tn distributed over the nine-year period therefore tells two different stories. The first six years, from 2017 to 2022, produced a cumulative N45.88tn in net FAAC distributions. But the following three years generated N47.25tn.

Thus, three post-reform years produced more distributable federation revenue than the preceding six years combined. The surge has strengthened the financial capacity of the three tiers of government, particularly state and local governments, which have become major beneficiaries of the expansion in distributable revenues.

However, the sharp rise in public revenues has also intensified scrutiny of how the additional funds are being deployed, especially as many Nigerians continue to face rising living costs and infrastructure and security challenges.

Analysts react

Commenting, Abubakar further criticised the concentration of development projects in major urban and political centres, saying public revenue should benefit communities across the states rather than selected constituencies.

Similarly, an Abuja-based analyst, Olayemi Adebanjo, said the increased revenue should have led to stronger interventions in affordable transportation, healthcare, education, agriculture and job creation.

Another analyst, Festus Oyabambi, said rising government revenues alongside worsening hardship would raise questions about how public funds were being deployed.

“The real test of the post-subsidy era should be whether Nigerians can feel a tangible improvement in their lives,” he said.

Also speaking, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said transparency remained a major concern, warning that some state governments could channel public funds towards projects that do not deliver sufficient economic or social benefits.

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“Transparency is also a big issue because sometimes monies are spent on unnecessary things. Of recent, states are concerned about setting up airlines. That is not even profitable and you end up subsidising the airlines instead of spending the money on water, roads and other necessary economy growth-tied infrastructure, while neglecting citizens in the rural areas,” Yusuf said.

He argued that the conversation about the benefits of the reforms should move beyond the amount of money being shared among the three tiers of government to how the funds are eventually deployed.

According to him, the Federal Government has limited powers to determine how state governments spend funds that accrue to them from the Federation Account, making citizen participation and public scrutiny crucial.

Yusuf said, “We need a framework for the citizens themselves to be able to engage with subnationals. There is a limit to how the Federal Government can dictate to them how they should spend their money, and citizens should be given that power.

“If we want to get the dividends of these reforms, we must be able to focus on state and local governments.”

The economist said the increased revenues flowing to subnational governments should be directed towards projects capable of improving productivity and living standards, particularly in rural communities where access to basic infrastructure remains inadequate.

He maintained that investments in roads, water supply and other critical infrastructure would have a more direct impact on economic activities and the welfare of citizens than projects that could require continuous government subsidies to survive.

Similarly, a development economist, Aliyu Ilias, said it was encouraging that the government had begun attaching specific objectives to some funds released to states.

He, however, said the effectiveness of such funding would depend largely on transparency and the willingness of citizens and civil society organisations to monitor how the money was utilised.

“First and foremost, it is a good one that the government has started attaching money given to states for something specific, and that is why the funding is okay. But citizens must monitor them to see what they are actually doing,” Ilias said.

He added, “The states also need to be more transparent. In as much as the government has stated what the money should be for, they should, in turn, tell the people what they are doing, state by state.

“Non-governmental organisations should also start looking at this area to track how they have actually utilised the money.”

Ilias said the increase in revenue accruing to the states following the removal of petrol subsidy had created a greater responsibility for governors to demonstrate the impact of the additional resources on the lives of citizens.

“The Finance Minister said states have collected from subsidy savings, so it has to show,” he said.

He also recalled that President Bola Tinubu had cautioned state governments against focusing solely on physical projects such as bridges, urging them to pursue broader development initiatives capable of improving the welfare of Nigerians.

Source: punchng.com

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DisCos earn N603bn as power offtake drops

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Electricity distribution companies collected N603.64bn from customers in the second quarter of 2026, despite a decline in the volume of electricity they received from the power market.

The figure was contained in the Nigerian Electricity Regulatory Commission’s second-quarter 2026 report, which showed that the average energy offtake by the DisCos at their trading points fell to 3,197.03 megawatt-hours per hour in the quarter.

The Q2 figure represented a 112.45MWh/h, or 3.40 per cent, decline from the 3,309.48MWh/h average recorded in the first quarter. Despite the decline in offtake, the DisCos recorded an overall offtake performance of 94.07 per cent during the quarter, against available partially contracted capacity of 3,398.41MWh/h.

According to the report, the DisCos received a total of 6,982.32 gigawatt-hours of electricity during the quarter but billed customers for only 5,812.31GWh. It stated, “This translates to an overall energy accounting efficiency of 83.24 per cent and represents a 0.24pp decrease compared to 2026/Q1 (83.48 per cent).”

The report further revealed that the naira value of electricity off-taken by the DisCos stood at N946.57bn, while the total value of energy billed to customers was N744.67bn.

This translated to a billing efficiency of 78.67 per cent, representing a decline of 0.57 percentage points from the 79.24 per cent recorded in the first quarter. At the collection stage, the DisCos recovered N603.64bn from the N744.67bn billed to customers, translating to a collection efficiency of 81.06 per cent.

The report said this represented an improvement of 2.11 percentage points from the 78.95 per cent recorded in Q1. However, the difference between the amount billed and the amount collected stood at N141.03bn during the quarter.

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The report also disclosed that the weighted average Aggregate Technical, Commercial and Collection losses across the 11 DisCos stood at 36.23 per cent in Q2.

It stated, “The ATC&C loss of 36.23 per cent is 19.31pp higher than the 2026 MYTO target (16.92 per cent) and translates to a cumulative revenue loss of N129.07 billion across all DisCos.”

The 36.23 per cent loss, however, represented a 1.21 percentage-point improvement from the 37.44 per cent recorded in Q1.

The report noted that all the DisCos failed to meet their ATC&C targets during the quarter, with “Kaduna DisCo recording the worst underperformance relative to the target (Actual – 67.70 per cent vs target – 18.18 per cent),” it stated.

On market obligations, the report said the cumulative upstream invoice payable by the DisCos stood at N410.38bn in Q2.

The amount comprised N326.46bn for generation costs from the Nigerian Bulk Electricity Trading Company and N83.92bn for transmission and administrative services provided by the market operator.

The DisCos collectively remitted N385.44bn, comprising N306.62bn to NBET and N78.82bn to the market operator, leaving an outstanding balance of N24.94bn. This represented a market remittance performance of 93.92 per cent, slightly lower than the 94.08 per cent recorded in Q1.

The report added that the Federal Government had taken responsibility for about 50 per cent, or N321.26bn, of the total generation costs through subsidies arising from the freezing of end-use customer tariffs at the rates applicable in July 2024.

Meanwhile, three international bilateral customers purchasing electricity from grid-connected generating companies paid $8.67m against an $18.84m invoice issued by the market operator during the quarter.

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This represented a remittance rate of 46.02 per cent. Domestic bilateral customers, on the other hand, paid N6.91bn against an invoice of N7.55bn, representing a remittance rate of 91.54 per cent.

Source: punchng.com

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Personal loans rise to N2tn as Nigerians borrow more

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Personal loans obtained by Nigerians rose to an estimated N2.06tn in May 2026, as consumer credit continued to expand amid persistent cost pressures and weak consumer spending, according to the latest Economic Report of the Central Bank of Nigeria.

The figure, calculated from data contained in the CBN’s May 2026 Economic Report, represents about 64.78 per cent of the N3.18tn total consumer credit outstanding during the month. The report covers developments in the real, fiscal, financial and external sectors of the economy.

The apex bank said consumer credit increased by 1.60 per cent from N3.13tn in April to N3.18tn in May, indicating that Nigerians borrowed an additional N50bn within one month.

It said, “Consumer credit outstanding increased by 1.60 per cent to N3.18tn from N3.13tn in the preceding month, driven by growth in personal and retail loans, which rose by 1.98 and 0.90 per cent, respectively.”

The CBN added, “Personal loans remained the dominant component of consumer credit, accounting for 64.78 per cent, while retail loans constituted 35.22 per cent.”

Based on the proportions reported by the apex bank, personal loans stood at approximately N2.06tn at the end of May, while retail loans amounted to about N1.12tn.

The 1.98 per cent month-on-month increase in personal loans suggests that the balance rose by roughly N40bn during the period. Retail loans, which include credit tied more directly to the purchase of goods and services, recorded a slower increase of 0.90 per cent.

The figures show that personal borrowing remained the main driver of Nigeria’s consumer-credit market, accounting for nearly two-thirds of outstanding credit.

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The increase came against a challenging operating environment for households and businesses. The CBN reported that economic activity remained weak in May, with its composite Purchasing Managers’ Index at 49.60 points, slightly higher than 49.40 points in April but still below the 50-point threshold separating expansion from contraction.

According to the bank, the contraction reflected subdued demand, declining new orders and elevated production costs. It also identified weak consumer spending and higher energy-related costs as pressures on the industry and services sectors.

Inflation also remained elevated during the period. Headline inflation increased to 15.93 per cent in May from 15.69 per cent in April, which the CBN attributed to persistent cost pressures and higher energy prices. However, month-on-month inflation slowed to 1.75 per cent from 2.13 per cent.

The combination of rising consumer credit and weak consumer spending suggests that households were increasingly accessing credit at a time when living and operating costs remained under pressure.

A recent report Enhancing Financial Inclusion & Advancement noted that four in every 10 Nigerians borrowing from formal financial institutions now take loans mainly for consumption and coping needs, as rising financial pressures increasingly push credit away from productive activities.

The 2026 Access to Financial Services in Nigeria Survey revealed that 40.8 per cent of formal borrowers used loans for coping and consumption, up sharply from 31.7 per cent in 2023.

The 9.1 percentage-point increase made coping and consumption the largest purpose of formal credit, overtaking productive enterprise borrowing, which fell from 40.2 per cent to 34.3 per cent during the same period.

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Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent. The report warned, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”

Formal credit use increased from six per cent of adults in 2023 to 10 per cent in 2026, with about 11.9 million Nigerians borrowing from regulated providers. When informal sources were included, 36 per cent of adults had access to some form of credit.

Credit use among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among people aged 18 to 35 rose from four per cent to 10 per cent. Business owners recorded an increase from four per cent to 10 per cent, while farmers rose from two per cent to six per cent.

However, the report found significant distress among borrowers. About 45.8 per cent of formal-credit users reported some or serious repayment stress, while 83.8 per cent experienced ongoing financial stress.

Source: punchng.com

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NAFDAC seizes N300m banned drinks in Lagos

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The National Agency for Food and Drug Administration and Control has seized alcoholic beverages worth an estimated N300m packaged in sachets and PET bottles below 200ml during enforcement operations in Lagos State.

NAFDAC disclosed this in a statement shared on its Facebook page on Sunday, adding that some distributors and retailers involved in the sale of the prohibited products were arrested.

The agency said the enforcement operations were carried out at Ile-Epo Market, Ojuwoye Market in Mushin and Oke-Arin Market on Lagos Island.

“Officials evacuated several cartons of alcoholic beverages packaged in sachets and PET bottles below 200ml from these locations.

“Distributors and retailers were arrested during operations at Ile-Epo Market, while raids were also conducted at Ojuwoye Market, Mushin, and Oke-Arin Market, Lagos Island,” the statement said.

NAFDAC said investigations revealed that some distributors and retailers were hoarding the prohibited products amid increased demand and rising prices.

The agency said the enforcement was part of efforts to ensure compliance with the ban on the sale and distribution of alcoholic beverages packaged in sachets and PET bottles below 200ml.

It warned distributors, retailers and other operators against selling, distributing or hoarding the prohibited products.

“NAFDAC emphasises that the ban remains in force and warns distributors, retailers and other operators against the sale, distribution or hoarding of the prohibited products.

“The value of the seized products is estimated at N300m,” it stated.

PUNCH Metro reported on August 25 that NAFDAC ordered manufacturers of banned alcoholic beverages packaged in sachets and polyethylene terephthalate bottles below 200ml to recall the products nationwide or risk closure of their facilities.

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NAFDAC had also vowed to fully enforce the Federal Government-approved prohibition of alcoholic beverages packaged in sachets and PET or plastic bottles below 200ml, warning that the ban was irrevocable.

The agency had stated that the years of grace given to manufacturers by the Federal Government to stop producing the products had expired.

Source: punchng.com

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