Nigeria’s fiscal landscape remains heavily concentrated around a handful of states, although their dominance eased slightly in the first quarter of 2026 as allocations grew across much of the federation.

An analysis of Federation Account Allocation Committee (FAAC) disbursements to the 36 states shows that total allocations rose to approximately N2.49 trillion between January and March 2026, compared with about N1.98 trillion during the corresponding period of 2025.

Despite the higher revenues, just 10 states received N998.65 billion, representing 40.1% of total allocations to states.

This compares with N842.77 billion, or 42.5%, received by the same states in Q1 2025.

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The figures suggest that while federal allocations remain concentrated among economically significant and oil-producing states, growth in distributable revenues was spread more broadly across the federation during the quarter.

A breakdown of the January-March 2026 FAAC schedules also points to a significant structural shift in Nigeria’s fiscal architecture. States shared more than N1.28 trillion from Value Added Tax (VAT) during the quarter, far exceeding the approximately N811.97 billion distributed through statutory allocation.

In addition, states benefited from a N26 billion augmentation from non-oil revenue distributed in February, alongside more than N30 billion from the Electronic Money Transfer Levy (EMTL) and about N16.4 billion from ecology funds.

The figures indicate that consumption taxes and electronic transactions are becoming increasingly important drivers of state revenues, reducing dependence on traditional oil-based statutory allocations.

Below is a breakdown of how the top-performing states fared.

Lagos – N200.21 billion

Lagos remained Nigeria’s largest FAAC beneficiary after receiving N200.21 billion in Q1 2026, up sharply from N123.72 billion in Q1 2025.

The 61.8% increase—the largest recorded by any state—was driven almost entirely by VAT receipts.

The state received approximately N193.50 billion from VAT during the quarter, comprising N50.12 billion in January, N101.34 billion in February and N42.05 billion in March. Lagos also received N3.31 billion from EMTL, N918.51 million from the February non-oil revenue augmentation and N778.12 million from ecology funds.

Interestingly, Lagos recorded a negative statutory allocation of N2.50 billion in February, leaving its cumulative statutory allocation for the quarter at just N1.70 billion. This means nearly all of the state’s FAAC receipts were driven by consumption-related revenues, reflecting Lagos’ status as Nigeria’s commercial and financial capital.

Delta – N143.42 billion

Delta retained second position with N143.42 billion, compared with N138.06 billion during the same period of 2025.

The state’s 3.9% increase reflects relatively stable derivation revenues despite fluctuations in oil receipts.

Unlike Lagos, Delta’s allocations remained heavily supported by statutory revenues. The state received approximately N108.12 billion in statutory allocation during the quarter, while VAT contributed about N33.79 billion. EMTL, ecology funds and the February non-oil revenue augmentation accounted for the balance.

Rivers – N123.96 billion

Rivers received N123.96 billion, down from N135.38 billion in Q1 2025.

The 8.4% decline made Rivers one of only two states to record a year-on-year fall in allocations, although it remained the country’s third-largest recipient.

VAT contributed approximately N69.68 billion, exceeding the state’s statutory allocation of N52.66 billion, while EMTL, ecology funds and non-oil revenue provided additional inflows. The figures highlight Rivers’ dual dependence on both oil revenues and strong commercial activity.

Bayelsa – N114.47 billion

Bayelsa received N114.47 billion, marginally higher than the N112.81 billion received in Q1 2025.

The oil-producing state derived about N79.44 billion from statutory allocation during the quarter, while VAT contributed approximately N33.82 billion. The remainder came from EMTL, ecology funds and the February non-oil revenue distribution.

Akwa Ibom – N109.76 billion

Akwa Ibom received N109.76 billion, virtually unchanged from N109.46 billion a year earlier.

Statutory allocation remained the state’s largest revenue source at approximately N77.89 billion, while VAT contributed N30.43 billion. EMTL, ecology funds and non-oil revenue made up the balance.

Kano – N75.03 billion

Kano remained the highest-ranked northern state after receiving N75.03 billion, compared with N59.63 billion in Q1 2025.

The state’s allocation increased by 25.8%, reflecting its large population and commercial significance.

VAT accounted for the largest share of receipts at approximately N45.25 billion, comfortably exceeding statutory allocation of N27.06 billion. Kano also received more than N710 million from EMTL during January, underlining its vibrant trading economy.

Oyo – N68.98 billion

Oyo emerged as one of the strongest performers during the quarter.

The state received N68.98 billion, up from N46.60 billion in the first quarter of 2025, representing a 48.0% increase.

VAT generated approximately N52.81 billion, accounting for more than three-quarters of total receipts, while statutory allocation stood at about N14.18 billion. February alone delivered over N24 billion in VAT receipts, reflecting expanding commercial and service-sector activities across the state.

Jigawa – N55.75 billion

Jigawa received N55.75 billion, compared with N42.58 billion in the corresponding period of 2025.

The state’s allocation increased by 30.9%, placing it among the fastest-growing recipients nationwide.

VAT contributed approximately N32.47 billion, exceeding the statutory allocation of N21.41 billion, while EMTL, ecology funds and the February non-oil revenue augmentation accounted for the remainder.

Ondo – N53.50 billion

Ondo’s allocation rose from N42.82 billion to N53.50 billion, representing a 24.9% increase.

The oil-producing state received about N24.02 billion in statutory allocation and N28.13 billion from VAT, indicating an increasingly balanced revenue structure despite its status as a major oil-producing state.

Katsina – N52.58 billion

Katsina completed the top 10 after receiving N52.58 billion, up from N43.70 billion in Q1 2025.

The 20.3% increase reflects stronger federal distributions during the quarter.

VAT accounted for approximately N33.43 billion, significantly higher than the state’s N17.06 billion statutory allocation. Katsina also benefited from N842.82 million from the February non-oil revenue augmentation.

Other states

Among the remaining states, Borno received N52.38 billion, up from N43.69 billion, while Anambra received N52.17 billion, compared with N43.74 billion.

  • Benue received N50.67 billion, up from N42.76 billion, while Imo received N50.31 billion, compared with N40.94 billion.
  • Niger received N48.37 billion, compared with N38.26 billion, while Sokoto received N48.31 billion, up from N38.28 billion.
  • Adamawa received N47.92 billion, compared with N35.42 billion, while Abia received N47.91 billion, up from N38.55 billion.
  • Edo received N47.88 billion, compared with N43.63 billion, while Kebbi received N47.53 billion, up from N37.67 billion.
  • Zamfara received N46.18 billion, compared with N35.11 billion, while Kogi received N45.95 billion, up from N38.02 billion.
  • Enugu received N45.67 billion, compared with N36.52 billion.
  • Plateau received N43.63 billion, up from N33.19 billion, while Nasarawa received N43.56 billion, compared with N33.00 billion.
  • Yobe received N42.92 billion, compared with N33.64 billion, while Taraba received N42.62 billion, compared with N33.62 billion.
  • Kwara received N42.30 billion, compared with N32.64 billion.
  • Kaduna received N41.80 billion, up from N37.26 billion, while Bauchi received N41.17 billion, compared with N34.42 billion.
  • Osun received N40.54 billion, compared with N31.66 billion.
  • Ebonyi received N39.45 billion, up from N31.67 billion, while Gombe received N37.90 billion, compared with N29.48 billion.
  • Ogun received N36.13 billion, up from N27.31 billion, while Cross River received N35.14 billion, compared with N29.59 billion.

The two exceptions to the nationwide growth trend were Rivers and Ekiti.

  • Ekiti recorded the steepest decline among all states, with allocations dropping to N17.12 billion from N28.29 billion in Q1 2025, representing a 39.5% decline. The sharp reduction was largely attributable to a negative statutory allocation of N16.19 billion in January, followed by another negative statutory adjustment of N1.68 billion in February, indicating substantial reconciliation deductions during the period.

VAT reshapes Nigeria’s fiscal landscape

The first-quarter data shows that 34 of Nigeria’s 36 states recorded higher FAAC allocations than in the corresponding period of 2025, reflecting stronger distributable revenues across the federation.

  • However, the composition of those allocations reveals an even more significant trend. While oil-producing states such as Delta, Bayelsa and Akwa Ibom continue to rely heavily on statutory and derivation revenues, VAT has become the dominant source of FAAC receipts for many other states, including Lagos, Rivers, Kano, Oyo, Jigawa and Katsina.
  • Overall, states received more than N1.28 trillion from VAT during the quarter compared with approximately N811.97 billion from statutory allocation, underscoring the growing importance of consumer spending and commercial activity in Nigeria’s revenue-sharing formula.

Although the share of the top 10 states declined from 42.5% in Q1 2025 to 40.1% in Q1 2026, the data points to a deeper transformation in Nigeria’s fiscal architecture, with consumption-driven revenues increasingly shaping how federal resources are distributed across the federation.