Nigerians Lament Rising Hardship as FG, States, and LGs Enjoy Record FAAC Allocations

Despite a surge in federal allocations to Nigeria’s three tiers of government since mid-2023, citizens continue to grapple with worsening economic hardship marked by inflation, poverty, and rising living costs.

Data from the Federation Account Allocation Committee (FAAC) show that from January 2023 to September 2025, the Federal Government, states, and local governments shared a total of ₦41.848 trillion, up sharply from ₦8.2 trillion in 2022. The distribution rose from ₦10.23 trillion in 2023 to ₦15.26 trillion in 2024, and further to ₦16.45 trillion within the first nine months of 2025.

However, economists warn that while the figures appear impressive, inflation and the devaluation of the naira have eroded much of the real value.
“Government may appear to be smiling to the bank, but the value of these allocations has depreciated drastically,” one analyst told Vanguard.

According to the NEITI FAAC Quarterly Review, state governments saw a 62% increase in allocations in 2024, while local governments rose by 47% and the federal share by 24%. Minister of Budget and Economic Planning, Sen. Abubakar Bagudu, also revealed that total allocations to states and LGs jumped from ₦458.81 billion in May 2023 to ₦991.81 billion in June 2025, excluding FX gains and other augmentations.

Rising revenue, deeper poverty

President Bola Tinubu’s fuel subsidy removal and naira floatation in May 2023 sharply increased government revenue but triggered inflation and a cost-of-living crisis. Fuel prices surged from ₦197 to over ₦1,000 per litre, while inflation peaked at 34.8% in December 2024 before moderating to 18.02% by September 2025, according to the NBS.

Despite the revenue boom, poverty has deepened. The World Bank estimates that 46% of Nigerians—around 110 million people—now live below the national poverty line.

Tinubu to governors: “Wet the grass”

Worried about rising hardship, President Tinubu recently urged state governors to ensure visible development at the grassroots.
“Nigerians are still complaining. You, the governors, must wet the ground and deliver more dividends of democracy,” Tinubu told APC leaders.

Experts fault fiscal discipline

Economists have criticized poor fund utilization, arguing that nominal growth in revenue does not equate to improved welfare.
“Revenue growth is misleading—it creates an illusion that states are richer,” said Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise.
Dr. Samson Simon of ARKK Economics added, “In real terms, allocations have not increased when adjusted for inflation and exchange rate depreciation.”

Dele Oye, Chairman of the Alliance for Economic Research, said the revenue surge has come with “economic distress,” urging governments to focus on job creation, production, and transparency in social welfare spending.

David Adonri of Highcap Securities lamented that only a few states, like Abia, have efficiently utilized increased allocations to improve living standards.
“The efficiency in the management of these funds is in doubt, as social goods remain largely elusive,” he said.

Governors defend utilization

Ekiti State Governor, Biodun Oyebanji, praised President Tinubu for increasing state revenues, saying the funds have enabled his administration to complete key projects without borrowing.
“For once in our history, we are receiving more than our fair share,” Oyebanji said while commissioning the Ekiti Revenue House.

Despite record federal allocations, economists insist that Nigerians are not feeling the impact, citing the need for fiscal discipline, transparency, and people-centered governance at all levels.

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