June 26 (THEWILL) — Lagos retained its position as Nigeria’s largest recipient of Federation Account Allocation Committee (FAAC) disbursements in the first quarter of 2026, as the 10 highest-earning states accounted for 40.1 percent of total allocations shared during the period.
An analysis of the January–March 2026 FAAC schedules shows that while oil-producing and economically active states continued to dominate federal allocations, Value Added Tax (VAT) emerged as the single largest revenue source for many states.
States collectively received more than N1.28 trillion from VAT during the quarter, significantly exceeding the approximately N811.97 billion distributed through statutory allocations.
They also shared about N30 billion from the Electronic Money Transfer Levy (EMTL), N26 billion in non-oil revenue augmentation, and roughly N16.4 billion from ecology funds.
Lagos led the rankings with N200.21 billion, a 61.8 per cent increase from N123.72 billion recorded in the corresponding period of 2025.
The state’s allocation was overwhelmingly driven by VAT receipts of about N193.5 billion, underscoring its position as Nigeria’s commercial and financial hub.
Delta followed with N143.42 billion, while Rivers ranked third with N123.96 billion despite recording an 8.4 percent year-on-year decline. Bayelsa received N114.47 billion, closely followed by Akwa Ibom with N109.76 billion.
Kano remained the highest-ranked northern state, receiving N75.03 billion, ahead of Oyo (N68.98 billion), Jigawa (N55.75 billion), Ondo (N53.50 billion), and Katsina (N52.58 billion).
The data shows that VAT exceeded statutory allocations in several states, including Lagos, Rivers, Kano, Oyo, Jigawa, and Katsina, reflecting the growing importance of consumption and commercial activity in state finances.
Overall, 34 of Nigeria’s 36 states recorded higher FAAC allocations than a year earlier.
Rivers and Ekiti were the only exceptions, with Ekiti posting the steepest decline due to significant statutory allocation adjustments.
Although the top 10 states accounted for a slightly smaller share of total allocations than in the first quarter of 2025, the figures point to an evolving revenue-sharing framework in which consumption taxes are becoming increasingly important alongside traditional oil-derived revenues.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
