Lagos Gets 17% of N4.54tn FAAC Allocations in H1 2026

In the first half of 2026, Lagos State emerged as the leading recipient of Federation Account allocations, surpassing Nigeria’s primary oil-producing states by securing the largest share of the total ₦4.54 trillion distributed among the states.

This significant achievement occurred despite Lagos not receiving any derivation-based revenue.

According to data from the Federation Account Disbursement Committee (FAAC), states collectively received ₦4.54 trillion in net allocations between January and June 2026. This represents a substantial increase of ₦930 billion, or 25.77 per cent, compared to the ₦3.61 trillion distributed in the same period of 2025.

Lagos accounted for ₦365.78 billion of this total, representing 16.96 per cent of all net FAAC disbursements to states. Its allocation rose by ₦128.86 billion, or 54.39 per cent, from the ₦236.92 billion it received in the first half of 2025, propelling it from third to first place in the rankings.

The primary driver for this shift was Lagos’s exceptional performance in Value Added Tax (VAT) collections. The state recorded ₦344.06 billion in net VAT, far exceeding its ₦10.91 billion in net statutory revenue. Additionally, Lagos benefited from ₦3.31 billion from the Electronic Money Transfer Levy (EMTL) and ₦5.05 billion from non-oil revenue augmentation.

This performance highlights how a state’s commercial and consumption-driven economy can significantly influence its FAAC receipts, even in the absence of derivation earnings, positioning Lagos ahead of traditional oil revenue leaders.

Top 10 States by Net FAAC Allocation:

The ten largest beneficiaries collectively received ₦2.16 trillion, constituting 47.47 per cent of the total ₦4.54 trillion distributed among the states.

1. Lagos— ₦365.78 billion: Topped the list primarily due to its ₦344.06 billion VAT allocation, with no derivation revenue. Its gross allocation reached ₦476.59 billion.

2. Delta— ₦331.43 billion: Benefited from ₦229.71 billion in derivation revenue and ₦262.54 billion in net statutory allocation, with a net VAT allocation of ₦63.39 billion.

3. Rivers — ₦295.99 billion: Combined ₦117.33 billion in derivation revenue with a robust ₦145.49 billion VAT allocation, the second-highest VAT receipt among the leading states.

4. Akwa Ibom — ₦270.27 billion: Received ₦169.29 billion in derivation revenue, alongside ₦207.73 billion in net statutory allocation and ₦57.13 billion in VAT.

5. Bayelsa — ₦266.72 billion: Its allocation was substantially boosted by ₦169.26 billion in derivation revenue, with net statutory and VAT allocations at ₦203.91 billion and ₦58.13 billion, respectively.

6. Kano — ₦152.57 billion: Demonstrated the strength of its non-oil economic activities, receiving ₦79.42 billion in VAT (the highest among northern states in the top 10) and ₦5.98 billion in non-oil revenue augmentation (the largest among the top 10).

7. Oyo — ₦139.09 billion: Showcased one of the strongest year-on-year growth rates, increasing by 45.99 percent. This surge was largely driven by a ₦97.09 billion VAT allocation, second only to Lagos among the top 10.

8. Ondo — ₦113.04 billion: Moved up from 10th to eighth position, supported by ₦21.73 billion in derivation revenue, ₦57.12 billion in net statutory allocation, and ₦50.58 billion in VAT.

9. Jigawa— ₦111.61 billion: Experienced the most significant upward movement in the rankings, climbing from 13th to ninth. Its allocation grew by 30.36 percent to ₦111.61 billion, supported by ₦49.01 billion in statutory allocation and ₦55.89 billion in VAT.

10. Borno — ₦109.65 billion: Entered the top 10 from 11th position, with its allocation increasing by 24.69 percent to ₦109.65 billion. It received ₦48.69 billion in statutory allocation and ₦53.57 billion in VAT.

The combined allocations for the top 10 states increased from ₦1.74 trillion in the first half of 2025 to ₦2.16 trillion, marking a growth of ₦416.83 billion or 23.97 percent. However, the growth rate for the top 10 was slower than the overall increase across all 36 states. Consequently, their share of the total FAAC disbursements slightly decreased from 48.16 percent in the first half of 2025 to 47.47 per cent in the first half of 2026, indicating a broader distribution of the additional revenue.

While Lagos led the overall rankings, oil-producing states continued to dominate the derivation component of FAAC.

Delta, Akwa Ibom, Bayelsa, Rivers, and Ondo collectively received over ₦707.32 billion in derivation revenue, representing almost the entirety of derivation funds distributed to the leading states during this period.

Delta received the largest derivation allocation among the top 10 at ₦229.71 billion, followed by Akwa Ibom (₦169.29 billion), Bayelsa (₦169.26 billion), Rivers (₦117.33 billion), and Ondo (₦21.73 billion).

Delta remained the second-largest beneficiary overall with ₦331.43 billion, despite relinquishing its top spot from the first half of 2025. Its allocation comprised ₦262.54 billion in net statutory revenue, ₦63.39 billion in VAT, and ₦3.83 billion in non-oil revenue augmentation. Rivers secured third place with ₦295.99 billion, bolstered by ₦117.33 billion in derivation revenue and ₦145.49 billion in VAT. Akwa Ibom received ₦270.27 billion, including ₦169.29 billion in derivation revenue, while Bayelsa ranked fifth with ₦266.72 billion, significantly boosted by its ₦169.26 billion derivation revenue.

The breakdown of FAAC components reveals that VAT is increasingly becoming a key differentiator for states outside the oil-producing bloc. The top 10 states accounted for 44.02 percent of total net VAT disbursements, compared to 53.25 percent of net statutory disbursements and a dominant 92.66 percent of derivation revenue. Lagos was the undisputed leader in VAT receipts with ₦344.06 billion, followed by Rivers (₦145.49 billion) and Oyo (₦97.09 billion). Kano also recorded a substantial ₦79.42 billion in VAT, contributing to its sixth-place position, along with ₦5.98 billion in non-oil revenue augmentation, the highest among the top 10.

Oyo experienced one of the most significant increases among the leading states, with its allocation rising 45.99 percent to ₦139.09 billion from ₦95.28 billion in the first half of 2025, driven primarily by its ₦97.09 billion VAT receipt. Jigawa made a notable leap from 13th to ninth place, with its net allocation increasing 30.36 percent to ₦111.61 billion. Borno also entered the top 10, moving from 11th position as its allocation rose 24.69 percent to ₦109.65 billion.

The distribution patterns suggest that the increase in revenue accruing to states was not solely concentrated among the largest beneficiaries. While the top 10 states received ₦2.16 trillion, their share of the total revenue saw a slight decrease from 48.16 percent to 47.47 percent year-on-year. This implies that approximately ₦48 out of every ₦100 distributed went to the top 10 beneficiaries, leaving a slightly larger portion of the increased revenue for the remaining 26 states.

Furthermore, the data highlights the emergence of distinct revenue models across the country. Oil-producing states continue to leverage the 13 percent derivation mechanism, while states with large commercial and consumer economies are increasingly securing substantial allocations through VAT. With total state FAAC disbursements experiencing a 25.77 percent increase to ₦4.54 trillion, the figures for the first half of 2026 indicate that Nigeria’s intergovernmental revenue landscape is now shaped not only by oil production but also by consumption, business activity, and the overall size of states’ taxable economies.