Big Money, Small Impact: Governors Under Fire Over N9tn FAAC Windfall
Nigerian state governors are facing intense scrutiny and mounting criticism from labor unions, civil society groups, and opposition parties following reports that they received an estimated N9 trillion in Federation Account Allocation Committee (FAAC) inflows in 2025.
Despite the record-breaking “windfall”, driven by policy shifts such as subsidy removal and exchange rate unification, critics argue that the surge in revenue has not translated into visible development or improved living standards for citizens grappling with economic hardship.
Analysis of data from the National Bureau of Statistics (NBS) and the FAAC disbursement reports reveals a dramatic increase in allocations.
Direct FAAC allocations to states jumped by approximately 41% year-on-year, rising from N5.186 trillion in 2024 to N7.315 trillion in 2025.
When the 13% derivation fund for oil-producing states is included, the total inflow to subnational governments hit N8.934 trillion (approximately N9 trillion), up from N6.533 trillion the previous year.
The widening gap between these soaring revenues and the reality on the ground has drawn the ire of the Nigeria Labour Congress (NLC). “Very few states are doing well in terms of how they deploy what they receive.
“The idea behind federal allocations is to bring the government closer to the grassroots, but unfortunately, in many states, this has not translated into the desired results.
“Once people know there are no consequences, they will continue to steal public funds,” said Onyeka Christopher, Assistant Secretary-General of the NLC.
Civil society organizations have echoed these sentiments. Debo Adeniran, Chairman of the Centre for Accountability and Open Leadership (CACOL), described the governors as “meddlesome interlopers” who view the increased funds as a “financial opportunity” for themselves rather than for the people.
“There’s no physical, verifiable, tangible evidence to show that the monies the governments are receiving are touching lives in terms of healthcare, electricity, physical infrastructure, or even agriculture,” added Auwal Musa Rafsanjani, Executive Director of CISLAC.
Across various states, opposition figures have rated their governors poorly. In Sokoto, the PDP spokesman Hassan Sahabi Sanyinnawal accused the APC-led government of concentrating development on “beautification projects” like roundabouts in the metropolis while neglecting 21 other local government areas.
In Lagos, George Ashiru of the African Democratic Congress (ADC) noted that infrastructure development still focuses on legacy projects rather than alleviating the suffering in overcrowded inner-city areas, even as rents skyrocket by up to 400%.
Economists warn that the heavy reliance on FAAC discourages states from developing internal revenue streams.
“These revenues are volatile and largely outside state control, making budgets vulnerable to oil price shocks. Over time, this approach also discourages ingenuity noted Dr. Ayodeji Ebo, Managing Director of Optimus by Afrinvest.
According to BudgIT’s 2025 State of States Report, over 30 states relied on FAAC for more than 60% of their recurrent revenue, with Lagos being a notable outlier.
The report highlighted a concern that as federal handouts increase, states have less incentive to boost their Internally Generated Revenue (IGR), which dipped slightly as a percentage of total revenue in 2024.
As the 2027 election cycle approaches, the pressure is mounting on governors to justify the trillions in their coffers with tangible results, rather than what critics describe as “strategizing for re-election.”
