FAAC allocations rise to N2.49tn in Q1 2026, VAT overtakes statutory allocation
FAAC disbursements to Nigeria’s 36 states rose to approximately N2.49 trillion in the first quarter of 2026, up from about N1.98 trillion in the same period of 2025. The ten biggest beneficiaries received N998.65 billion, representing 40.1% of the total, down from 42.5% a year earlier. Lagos led the pack with N200.21 billion—a 61.8% jump driven mainly by N193.50 billion in VAT receipts. In contrast, Rivers and Ekiti saw declines, with Ekiti falling 39.5% to N17.12 billion. Notably, states collected more than N1.28 trillion from VAT during the quarter, surpassing the roughly N811.97 billion from statutory allocation, while EMTL, ecology funds and the February non‑oil revenue boost added further inflows.
This shift shows that consumption‑based taxes are becoming the core of state finances, reducing reliance on oil‑derived statutory allocations and reflecting growing commercial activity across the federation. The changing revenue mix influences how states plan budgets and may affect the stability of federal transfers.
For businesses, the rise in VAT collections signals stronger consumer spending—consider expanding in high‑VAT states like Lagos, Oyo or Kano. Policymakers should monitor VAT efficiency and explore additional non‑oil revenue streams. Citizens can expect budget allocations to increasingly mirror consumption patterns rather than oil output. How might a greater reliance on VAT shape state spending priorities and affect your business or household financial planning?