Nigeria’s fiscal architecture is designed to spread federally collected revenue across the Federation, but its outcomes are far from uniform. In the first half (H1) of 2026, FAAC distributed N10.96 trillion across the Federal Government, 36 states, the FCT, and 774 local government areas, within that distribution, yet the money did not spread evenly, just five states Lagos, Delta, Rivers, Akwa Ibom, and Bayelsa received 32.92 percent of the N4.65 trillion allocated to states and the FCT.
How the money was shared …
In H1 2026, state governments received the largest portion of FAAC allocations, N4.65 trillion, or 42.41 percent of the total. The Federal Government received N3.28 trillion, representing 29.90 percent, while local governments received N3.04 trillion, or 27.69 percent.
Together, states and local governments received N7.69 trillion 70.10 percent of all FAAC distributions. This makes the distribution among states and local government especially important, because these are the governments closest to the people. schools, primary healthcare centres, local roads, sanitation, everyday services.
Lagos received the highest state allocation at N365.78 billion, representing 7.87 percent of the total distributed to states and the FCT. Delta followed with N331.43 billion, or 7.13 percent, while Rivers received N295.99 billion, representing 6.37 percent. Akwa Ibom received N270.27 billion, or 5.81 percent, and Bayelsa received N266.72 billion, representing 5.74 percent.
Together, these five states received 32.92 percent of the state allocation pool. practically, five governments received nearly one of every three naira distributed to Nigeria’s 36 states and the FCT.
At the other end of the distribution, Ekiti received the lowest allocation at N56.37 billion, or 1.21 percent of the state pool. Cross River received N72.56 billion, representing 1.56 percent, while Gombe received N78.54 billion, or 1.69 percent.
The contrast is stark. Lagos alone received about 6.5 times Ekiti’s allocation. More broadly, the five highest recipients received roughly 27 times the combined allocation of the three lowest recipients.
Why these states lead …
This is not accidental as Nigeria’s revenue allocation formula weighs several factors, including derivation, population, landmass, internal revenue generation, and equality among states. States with substantial oil production, large populations, or stronger revenue bases tend to receive more.
Delta, Rivers, Akwa Ibom, and Bayelsa are major oil-producing states, and derivation is a major reason they rank near the top. Lagos, meanwhile, combines a large population with one of the country’s strongest internal revenue bases, giving it a powerful position in the allocation system.
Lagos also carries exceptional service-delivery pressures as a densely populated commercial hub. But the scale of concentration still raises a fairness question: can states receiving a fraction of these allocations meet comparable obligations?
The local governments …
The concentration continues below the state level. Lagos received the highest total LGA allocation at N311.20 billion, followed by Kano at N148.41 billion, Rivers at N139.42 billion, Oyo at N132.96 billion, and Katsina at N116.66 billion.
Lagos led is especially striking because it has only 20 LGAs, compared with Kano’s 44, Rivers’ 23, Oyo’s 33, and Katsina’s 34. Lagos received more than twice Kano’s total LGA allocation despite having less than half as many councils.
On average, each Lagos LGA received N15.56 billion in H1 2026. That is more than twice Rivers’ N6.06 billion per LGA and more than five times Osun’s N2.87 billion per LGA, the lowest average in the country.
Fiscal concentration can create a vicious cycle. States with larger allocations can invest more in infrastructure, public services, and revenue-generation capacity. States with smaller allocations may struggle to fund basic services, maintain assets, or invest in the economic foundations that would improve their own revenue performance.
This is particularly important for local governments. A council receiving N2.36 billion over six months has a very different capacity to maintain roads, support primary healthcare, manage waste, or invest in local economic infrastructure than one receiving N20.38 billion.
Nigeria’s constitution, chapter II in section 162 of the 1999 constitution of Federal republic of Nigeria aims to promote even development, but FAAC’s H1 2026 distribution shows how uneven the fiscal starting point remains. Five states received nearly one third of state allocations, while the lowest recipients received little more than 1 percent each.
Unless revenue sharing is paired with stronger data, transparent needs assessment, and measurable service delivery standards, fiscal federalism will continue to produce a country where some governments have abundant resources to build and deliver, while others are left managing scarcity.
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