Nigeria's fiscal landscape continues to show a concentration of revenues among a few states, although their dominance eased slightly in the first quarter of 2026. This period saw an overall increase in allocations across most of the federation.

An analysis of FAAC disbursements to the 36 states reveals that total allocations reached approximately N2.49 trillion between January and March 2026. This marks a significant rise from about N1.98 trillion recorded during the corresponding period of 2025.

Despite the higher revenues, just 10 states collectively received N998.65 billion, representing 40.1% of the total allocations to states. This figure is down from N842.77 billion, or 42.5%, received by the same states in Q1 2025.

The data suggests that while federal allocations remain concentrated among economically significant and oil-producing states, the growth in distributable revenues was spread more broadly. This indicates a structural shift in Nigeria’s fiscal architecture.

States shared more than N1.28 trillion from Value Added Tax (VAT) during the quarter, which far exceeded the approximately N811.97 billion distributed through statutory allocation. Additionally, states benefited from a N26 billion augmentation from non-oil revenue in February, over N30 billion from the Electronic Money Transfer Levy (EMTL), and about N16.4 billion from ecology funds.

These figures underscore the increasing importance of consumption taxes and electronic transactions as drivers of state revenues. This trend reduces dependence on traditional oil-based statutory allocations.

Top Performing States in Q1 2026

Lagos – N200.21 billion: Lagos remained Nigeria’s largest FAAC beneficiary, receiving N200.21 billion in Q1 2026, a sharp increase from N123.72 billion in Q1 2025. This 61.8% increase was almost entirely driven by VAT receipts, which contributed approximately N193.50 billion. Lagos recorded a negative statutory allocation of N2.50 billion in February, leaving its cumulative statutory allocation for the quarter at just N1.70 billion.

Delta – N143.42 billion: Delta retained second position with N143.42 billion, compared with N138.06 billion in Q1 2025. The state’s 3.9% increase was supported by approximately N108.12 billion in statutory allocation, while VAT contributed about N33.79 billion.

Rivers – N123.96 billion: Rivers received N123.96 billion, a decline from N135.38 billion in Q1 2025, making it one of only two states to record a year-on-year fall. VAT contributed approximately N69.68 billion, exceeding the state’s statutory allocation of N52.66 billion.

Bayelsa – N114.47 billion: Bayelsa received N114.47 billion, marginally higher than the N112.81 billion received in Q1 2025. The oil-producing state derived about N79.44 billion from statutory allocation, with VAT contributing approximately N33.82 billion.

Akwa Ibom – N109.76 billion: Akwa Ibom received N109.76 billion, virtually unchanged from N109.46 billion a year earlier. Statutory allocation remained the state’s largest revenue source.

Kano – N75.03 billion: Kano remained the highest-ranked northern state, receiving N75.03 billion, up from N59.63 billion in Q1 2025. The state’s allocation increased by 25.8%, with VAT accounting for N45.25 billion, comfortably exceeding the statutory allocation of N27.06 billion.

Oyo – N68.98 billion: Oyo was a strong performer, receiving N68.98 billion, up from N46.60 billion in Q1 2025, representing a 48.0% increase. VAT generated approximately N52.81 billion, accounting for over three-quarters of total receipts.

Jigawa – N55.75 billion: Jigawa received N55.75 billion, compared with N42.58 billion in Q1 2025, an increase of 30.9%. VAT contributed approximately N32.47 billion, exceeding the statutory allocation of N21.41 billion.

Ondo – N53.50 billion: Ondo’s allocation rose from N42.82 billion to N53.50 billion, a 24.9% increase. The state received about N24.02 billion in statutory allocation and N28.13 billion from VAT.

Katsina – N52.58 billion: Katsina completed the top 10, receiving N52.58 billion, up from N43.70 billion in Q1 2025. The 20.3% increase saw VAT account for approximately N33.43 billion, significantly higher than the state’s N17.06 billion statutory allocation.

Other States' Allocations and Trends

Among the remaining states, Borno received N52.38 billion (up from N43.69 billion), while Anambra received N52.17 billion (compared with N43.74 billion). Benue received N50.67 billion (up from N42.76 billion), and Imo received N50.31 billion (compared with N40.94 billion).

Niger received N48.37 billion (compared with N38.26 billion), Sokoto received N48.31 billion (up from N38.28 billion), Adamawa received N47.92 billion (compared with N35.42 billion), and Abia received N47.91 billion (up from N38.55 billion).

Edo received N47.88 billion (compared with N43.63 billion), Kebbi received N47.53 billion (up from N37.67 billion), Zamfara received N46.18 billion (compared with N35.11 billion), and Kogi received N45.95 billion (up from N38.02 billion). Enugu received N45.67 billion (compared with N36.52 billion).

Plateau received N43.63 billion (up from N33.19 billion), Nasarawa received N43.56 billion (compared with N33.00 billion), Yobe received N42.92 billion (compared with N33.64 billion), and Taraba received N42.62 billion (compared with N33.62 billion). Kwara received N42.30 billion (compared with N32.64 billion).

Kaduna received N41.80 billion (up from N37.26 billion), Bauchi received N41.17 billion (compared with N34.42 billion), and Osun received N40.54 billion (compared with N31.66 billion). Ebonyi received N39.45 billion (up from N31.67 billion), and Gombe received N37.90 billion (compared with N29.48 billion).

Ogun received N36.13 billion (up from N27.31 billion), while Cross River received N35.14 billion (compared with N29.59 billion). The two exceptions to the nationwide growth trend were Rivers and Ekiti.

Ekiti recorded the steepest decline among all states, with allocations dropping to N17.12 billion from N28.29 billion in Q1 2025, representing a 39.5% decline. This sharp reduction was largely attributable to a negative statutory allocation of N16.19 billion in January, followed by another negative statutory adjustment of N1.68 billion in February, indicating substantial reconciliation deductions during the period.

The first-quarter data highlights that 34 of Nigeria’s 36 states recorded higher FAAC allocations than in Q1 2025, reflecting stronger distributable revenues. The composition of these allocations reveals an even more significant trend: VAT has become the dominant revenue source for many states.

Overall, states received more than N1.28 trillion from VAT during the quarter compared with approximately N811.97 billion from statutory allocation. This underscores the growing importance of consumer spending and commercial activity in Nigeria’s revenue-sharing formula. While the share of the top 10 states declined from 42.5% in Q1 2025 to 40.1% in Q1 2026, the data points to a deeper transformation in Nigeria’s fiscal architecture, with consumption-driven revenues increasingly shaping how federal resources are distributed across the federation.