In the 2025 fiscal cycle, several Nigerian states received comparatively lower shares from the Federation Account Allocation Committee (FAAC) due largely to limited economic activity, small VAT bases, and little or no oil derivation revenue.
Here are the bottom 10 states by FAAC receipts in 2025 (ranked from 10th lowest to lowest):
1. Yobe State — ₦155.20 billion
2. Taraba State — ₦153.33 billion
3. Nasarawa State — ₦149.67 billion
4. Kwara State — ₦145.93 billion
5. Osun State — ₦144.94 billion
6. Ebonyi State — ₦139.10 billion
7. Gombe State — ₦136.44 billion
8. Cross River State — ₦130.84 billion
9. Ekiti State — ₦130.30 billion
10. Ogun State — ₦124.19 billion (lowest in 2025)
Why these states rank lowest:Most of these states lack significant oil production, which eliminates the 13% derivation benefit that boosts allocations for oil-producing states.
They also tend to have smaller economic and commercial activities, limiting Value Added Tax (VAT) and Electronic Money Transfer Levy (EMTL) contributions — key components of FAAC distribution.
What this means:States with lower FAAC allocations often face greater fiscal stress and higher dependence on federal transfers to fund recurrent expenditures and capital projects.
The disparity underscores ongoing challenges in diversifying state revenues and boosting internally generated revenue (IGR) across the federation.
FAAC allocations are derived from statutory federal revenues, VAT, EMTL, and oil derivation and are shared monthly among the Federal Government, states, and local governments per constitutional formula.
Image Credit: Nairametrics
Source: Nairametrics
