FAAC allocations now above N2trn monthly, up from N300bn under past administrations, says Oyedele

Finance Minister Taiwo Oyedele says Nigeria’s monthly Federal Account Allocation Committee (FAAC) disbursements have risen above N2 trillion, compared with an average of N300 billion in previous administrations. He spoke on Monday in Owerri at the opening of the 2026 National Council on Finance and Economic Development retreat.

Reforms triggered revenue surge

Oyedele attributed the jump to President Bola Tinubu’s economic reforms, including fuel subsidy removal and foreign exchange unification. He said the changes pushed revenue up to a record N2.8 trillion disbursement in June 2026.

“For nearly 30 years, it was common for many states to struggle to pay salaries,” Oyedele said. He added that no state currently struggles with salary obligations under the new arrangement.

The minister, however, warned that higher revenues alone do not guarantee prosperity. He said states must invest strategically in local productivity, infrastructure, human capital, and basic public services.

States urged to boost internally generated revenue

Oyedele challenged state and local governments to look beyond monthly oil allocations and aggressively expand their internally generated revenue bases. He said this would help them withstand volatile global economic pressures.

“Ultimately, the federation cannot share its way into prosperity,” he said. He advised states to transform into active economic platforms that attract investment, support business, and drive job creation.

The minister also called for an urgent review of Nigeria’s allocation formulas to ensure equity across all 774 local government areas. He stressed the need for fiscal responsibility and debt sustainability frameworks.

Interventions and stakeholder position

Oyedele said the Federal Government has expanded targeted interventions, including cash transfers to 15 million vulnerable households and the NG-CARES programme, to cushion the impact of the reforms on poor Nigerians.

In his speech, Imo State Governor Hope Uzodimma, represented by Deputy Governor Chinyere Ekomaru, commended the president for his leadership and commitment to fiscal reforms.

“Economies are under immense pressure. In Nigeria, states and local governments bear the direct responsibility of serving the people,” Uzodimma said. “Yet, we face challenges in revenue mobilisation and rising demands from citizens in many critical sectors. Solution, however, lies in strengthening physical federalism. States must be empowered to generate revenue. Allocations must be equitable and must be built with resilience through diversification and prudent management of available resources.”

Earlier, Permanent Secretary of the Federal Ministry of Finance, Raymond Omachi, said the retreat was designed to generate practical solutions to Nigeria’s fiscal and economic challenges. The forum brought together the Revenue Mobilisation Allocation and Fiscal Commission, the Office of the Accountant-General of the Federation, state ministries of finance, the Central Bank of Nigeria, and NNPC Ltd., among others.

What it means for state finances

The three-day retreat, themed “Strengthening Fiscal Federalism for Equity, Sustainable Development and Economic Resilience in a Volatile Global Economy,” is expected to produce recommendations on revenue mobilisation, fiscal responsibility, debt sustainability, economic diversification, and improved resource allocation. For states, the new revenue level eases salary pressure, but the minister’s warning is clear: without productivity and diversified revenue, the current windfall may not translate into lasting development.