States with the lowest Federation Account Allocation Committee (FAAC) receipts in 2025 were largely those with smaller economic bases, limited industrial activity, and little or no exposure to oil-related derivation revenue.
Unlike oil-producing or heavily commercialized states, these states depend more heavily on federally shared inflows to finance recurrent expenditure and capital projects.
The figures are based on FAAC data reviewed by Nairametrics Research across all 36 states, covering statutory allocations, net VAT receipts, Electronic Money Transfer Levy (EMTL), and derivation where applicable, regardless of the underlying revenue generation period.
Overall, the pattern reinforces how population size, consumption intensity, and access to oil revenue continue to shape the lower end of Nigeria’s fiscal distribution table.
What the data is sayingÂ
FAAC allocations are determined by a blend of four major revenue components:
- Net Statutory Allocation
- 13% Derivation Revenue (oil-linked)
- Net VAT Allocation
- Electronic Money Transfer Levy (EMTL)
States at the bottom of the ranking are typically those without oil production and with relatively modest internally generated consumption bases. As a result, VAT and statutory inflows form the bulk of their FAAC receipts, while EMTL contributes a smaller but steadily growing share.
Top 10 States with the least FAAC Net Allocation in 2025Â
Ogun recorded the lowest net FAAC allocation in 2025 at N124.19 billion, rising from N83.32 billion in 2024, an increase of N40.87 billion or 49.06%.
- Net Statutory Allocation:Â N18.99bn
- Net VAT Allocation:Â N90.01bn
- EMTL:Â N5.40bn
Ogun’s allocation structure was heavily skewed toward VAT, which accounted for the overwhelming share of its total receipts.
More InsightÂ
While the states with the lowest FAAC allocations generally exhibit limited industrial development and a reliance on federal transfers, the Total Gross Amount reveals more nuanced patterns in fiscal dynamics for some of these states, particularly Ogun, Ekiti, Cross River, and Gombe.
- Despite the lowest net allocation of N124.19 billion, Ogun posted a high gross amount of N175.30 billion, largely driven by VAT inflows of N90.01 billion, showing strong reliance on consumption-based revenue.
- Ekiti recorded a gross allocation of N158.96 billion and a net of N130.30 billion, with VAT (N78.35 billion) forming the largest share, highlighting continued dependence on VAT and statutory transfers.
- Cross River received N170.18 billion gross and N130.84 billion net, mainly supported by VAT and statutory allocations due to limited oil-related revenue.
- Gombe posted N161.91 billion gross and N136.44 billion net, with VAT dominating its revenue mix, underscoring steady consumption growth but ongoing reliance on federal inflows.
For the other states in the bottom rankings (such as Yobe, Taraba, and Nasarawa), the year-on-year growth in FAAC receipts is notable but largely driven by improvements in VAT and statutory allocations.
These states, however, remain among the least fiscally endowed in Nigeria, with limited industrial development and a continued reliance on federally shared funds.
Why this mattersÂ
The Total Gross Amount figures show that even the least-funded states can see a substantial increase in their total receipts if consumption-driven taxes like VAT continue to perform well. However, this also means that states with limited diversification into oil, gas, or industry remain at the mercy of federal revenue streams. If federal revenues dip or if consumption slows, these states will be disproportionately affected.
- States like Ogun and Ekiti that see the bulk of their funds come from VAT are less vulnerable to oil price volatility but face challenges tied to national economic trends and consumer behavior.
- On the other hand, states like Cross River and Gombe face more structural vulnerabilities due to their reliance on both VAT and statutory allocations, which are subject to political and economic changes at the federal level.
What You Should KnowÂ
Understanding the dynamics behind FAAC allocations reveals a lot about the underlying economic and fiscal health of Nigeria’s states.
The differences in allocation amounts reflect more than just oil reserves or population size; they point to broader trends in economic activity and how states are positioning themselves for the future:
- While oil-rich states like Delta and Rivers continue to dominate in FAAC allocation, non-oil states such as Lagos and Kano are increasingly benefiting from the growth of commercial activities and population-driven revenue sources like VAT.
- States that heavily rely on oil-derived revenue (e.g., Akwa Ibom and Bayelsa) are at risk of being impacted by fluctuating oil prices, which could affect their ability to fund key services and infrastructure. On the other hand, states with stronger VAT performance, like Lagos, are more insulated from such fluctuations.
- The rise of digital transactions, urbanization, and commercial activity in states like Oyo and Anambra shows that economic diversification into taxable activities like VAT can provide a substantial financial cushion, reshaping Nigeria’s fiscal landscape for the future.
