Despite a massive surge in federal allocations to states following subsidy removals and global oil price hikes, millions of Nigerians continue to grapple with record poverty levels and a biting cost-of-living crisis.
Monthly revenue shared by the Federation Account Allocation Committee (FAAC) has experienced a remarkable surge, with states now receiving nearly triple the allocations recorded prior to the removal of fuel subsidies in 2023. Recent data reveals that while the 36 states received a combined sum of N3.35 trillion in 2022, that figure skyrocketed to N8.19 trillion by 2025. This fiscal windfall has been further bolstered by the ongoing war in Iran, which blocked the Strait of Hormuz and pushed crude oil prices above $100 per barrel. Additionally, new tax laws and Executive Order 9—which mandates direct remittances from oil companies to the FAAC account—pushed the total shared revenue to a record N2.04 trillion in March 2026.
Despite this explosion in government revenue, citizens across states like Kano, Lagos, and Akwa Ibom report a deteriorating quality of life as inflation erodes purchasing power. In Kano, where allocations jumped from N99.31bn in 2022 to N279.69bn in 2025, and Lagos, which saw a rise from N161.29bn to N531.51bn, residents and civil servants complain of a crushing cost of living. Although a N70,000 minimum wage was approved in 2024, workers lament that the devaluation of the naira and rising costs of fuel, food, and transportation have rendered the increase ineffective. Experts maintain that states now possess significantly more liquid assets without delivering commensurate impacts on the living standards of their constituents.
The disconnect between rising state wealth and public welfare is highlighted by a grim April 2026 World Bank report, which indicates that poverty in Nigeria rose to approximately 140 million people in 2025, representing 63 per cent of the population. This marks a steady decline from 56 per cent in 2023, according to the report titled “Nigeria’s Tomorrow Must Start Today: The Case for Early Childhood Development.” While the National Bureau of Statistics had previously identified 133 million people as multidimensionally poor in 2022, the current economic trajectory suggests that the influx of federation funds has failed to bridge the gap for those lacking adequate access to healthcare, food, and housing.
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