States struggle with IGR as FAAC allocations account for over 70% of H1 revenue 

Generating substantial revenue in states have remained a struggle, as revenues from federal account continue to dominate their revenue stream, accounting for over 70 percent of their income in the first half of the year.

According to ‘Agora policy’ states revenue performance report analysed by BusinessDay, the total revenue posted by 30 out of 36 states stood at N6.05 trillion, representing 87 percent of the total revenue (N6.95 trillion) target for the period.

Of the total N6.05 trillion realised in the period, FAAC allocations accounted for N4.46 trillion (73.8 percent) while the internally generated revenue was N1.59 trillion (26.2 percent).

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The report showed that of the 30 states reviewed in the report, FAAC disbursement accounted for 70 – 95 percent of the total revenues of 29 states. Only Lagos state had FAAC allocations representing 30 percent of its total revenue.

According to the report, Lagos state generated the highest revenue in the first half of 2025 at N1.28 trillion as against N1.46 trillion budgted. Of this revenue, 70.1 percent was internally generated and 28.9 was FAAC allocations.

Lagos State was followed by Akwa Ibom with a total revenue at N579 billion, higher than N415 billion budgeted in the period. 90 percent of the total revenue posted was from FAAC while only 10 was generated internally.

Bayelsa and Edo states followed as third and fourth state with highest total revenue in the period, as their revenues stood at N291 billion and N264 billion respectively.

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“Akwa Ibom, Lagos, and Edo topped the list of states that received more FAAC revenue than projected, while Osun, Zamfara, and Kaduna recorded the highest shortfalls compared to their FAAC projections.

“11 states generated by more IGR than projected in their budgets, while 19 fell short of their IGR targets. Among the 11 states that exceeded their IGR targets, Akwa Ibom, Cross River, and Ekiti ranked highest while Jigawa, Taraba, and Sokoto were the lowest performers among the 19 states that fell short of their targets,” the report stated.