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Big money, small impact: Non-Performing Govs on fire over N9tn FAAC windfall
FAAC allocations to states surged by over N2tn in one year, according to an analysis of Federation Account disbursement data published by the National Bureau of Statistics highlighting the scale of the revenue windfall that flowed to subnational governments in 2025 amid higher federation inflows.
The sharp rise has triggered criticism from organised labour and opposition political parties, with the Nigeria Labour Congress warning that higher allocations have failed to deliver meaningful improvements in citizens’ welfare due to weak governance, misplaced priorities, and corruption at the state level.
Civil society organisations have also faulted state governments, accusing them of mismanaging the inflows and failing to translate increased revenues into visible development outcomes, while calling for stronger accountability and oversight.
Economists, meanwhile, say the surge has expanded states’ fiscal space but caution that heavy dependence on federally shared revenue and poor revenue management continue to undermine sustainable development at the subnational level.
The Federation Account disbursement data show that state governments received a total of N7.315tn from the Federation Account Allocation Committee in 2025, compared with N5.186tn in 2024. The year-on-year increase of roughly N2.13tn represents a jump of about 41 per cent in direct FAAC allocations to states.
When the constitutionally mandated 13 per cent derivation revenue is added, total inflows attributable to states climbed to N8.934tn (about N9tn) in 2025, up from N6.533tn in 2024, a rise of N2.4tn or 36.74 per cent.
This surge came against the backdrop of a sharp expansion in total FAAC distributions. Aggregate allocations to the three tiers of government, including derivation, rose from N15.259tn in 2024 to N21.897tn in 2025.
States therefore captured a substantial share of the overall increase, both in absolute terms and as a proportion of total federation revenues. Without the 13 per cent derivation component, states’ N7.315tn allocation in 2025 accounted for about 33.4 per cent of the N21.897tn total FAAC disbursement for the year, compared with roughly 34.0 per cent in 2024.
When derivation revenue is included, total state-linked receipts of N8.934tn represented about 40.8 per cent of total FAAC disbursements in 2025, down from around 42.8 per cent in 2024, indicating that while inflows grew in nominal terms, their relative share declined as allocations to all tiers expanded.
A closer look at monthly disbursements shows that state allocations improved steadily throughout 2025. States received N498.50bn in January, well above the N396.69bn recorded in January 2024.
Monthly allocations continued to trend higher, peaking at N727.17bn in October before easing to N601.73bn in December. By contrast, only two months in 2024 recorded allocations above N500bn, with the highest monthly figure being N549.79bn in December.
By the end of June 2025, states had already received over N3.32tn, compared with about N2.33tn in the first half of 2024, easing short-term liquidity pressures, particularly for states with heavy wage bills and debt service obligations.
Derivation revenue also played a critical role. In 2025, derivation payments rose to N1.619tn from N1.347tn in 2024, an increase of about N272bn or just over 20 per cent. Monthly derivation inflows were especially strong in September 2025, when oil-producing states shared N183.01bn, compared with N99.47bn in September 2024.
Despite the surge, states did not disproportionately outpace other tiers. Federal Government allocations rose from N4.951tn in 2024 to N7.613tn in 2025, while local government allocations increased from N3.774tn to N5.351tn.
Nevertheless, the impact on states is particularly significant given their responsibility for delivering education, healthcare, and infrastructure. The additional N2.4tn received in 2025 alone is equivalent to nearly half of what states received from FAAC in total in 2024.
The 10th edition of the BudgIT State of States Report, titled ‘A Decade of Subnational Fiscal Analysis: Growth, Decline and Middling Performance’, revealed that over 30 states rely heavily on FAAC allocations.
An executive of BudgIT said on Channels Television’s Politics Today programme, “At least thirty states, excluding Lagos, Ogun, and Enugu, relied on FAAC for more than sixty per cent of their recurrent revenue. Lagos remains an outlier, but Ogun and Enugu also seem to be performing quite well.
“In total, 31 states depended on FAAC for at least 80 per cent of their current revenue, which shows just how challenging the fiscal situation has become for many of them.
“For example, Lagos’s FAAC allocation rose from N4.24bn to N11.38bn, a massive increase that highlights how significant federation account transfers have become within a single fiscal year. Still, credit should go to the states that recorded strong year-on-year growth, as well as those that grew consistently over the ten-year period we reviewed.”
The report added that 29 states relied on FAAC receipts for at least half of their total revenue, 28 relied on it for at least 55 per cent, and 21 relied on it for over 70 per cent.
The BudgIT executives expressed concern that rising FAAC inflows were discouraging states from expanding internally generated revenue. This is “concerning because the more FAAC money states receive, the less incentive some of them have to develop their own internal revenue sources”.
They noted that “the proportion of IGR within total recurrent revenue declined slightly from 25.27 per cent in 2023 to 20.27 per cent in 2024, indicating continued dependence on federal transfers”.
The Managing Director of Optimus by Afrinvest, Dr Ayodeji Ebo, said, “These revenues are volatile and largely outside state control, making budgets vulnerable to oil price shocks. Over time, this approach also discourages ingenuity, as states become dependent on external inflows rather than building durable local revenue sources.”
A development economist and Chief Executive Officer of CSA Advisory, Dr Aliyu Ilias, said subnational governments are creating challenges for the federation through how they manage FAAC allocations.
He suggested “counterpart funding,” where states that increase their IGR receive proportional benefits, warning that without incentives, states would continue to rely heavily on Abuja. Ilias said, “While FAAC allocations are at unprecedented levels, they are not necessarily translating into improved living standards.”
NLC speaks
The country’s biggest labour union said rising FAAC allocations have failed to deliver meaningful benefits to citizens, blaming weak governance, misplaced priorities, and persistent corruption at the state level.
“Very few states are doing well in terms of how they deploy what they receive,” Assistant Secretary-General of the NLC, Onyeka Christopher, said. “The idea behind federal allocations is to bring the government closer to the grassroots, but unfortunately, in many states, this has not translated into the desired results for well-known reasons.”
The NLC added that, “Once people know there are no consequences, they will continue to steal public funds,” warning that kleptocracy continues to undermine development. “For FAAC to truly benefit the people, the issue of kleptocracy must be addressed. What are the EFCC and ICPC doing?” it asked.
News
Ozekhome’s SAN Title Suspended Pending Ethics Investigation
The Legal Practitioners’ Privileges Committee (LPPC) has suspended renowned lawyer, Chief Mike Ozekhome, from the rank of Senior Advocate of Nigeria (SAN) pending the conclusion of disciplinary proceedings against him.
The decision was announced in a statement issued on Wednesday by the Chief Registrar of the Supreme Court and Secretary of the LPPC, Hajo Sarki-Bello, following the committee’s 173rd General Meeting held on June 23, 2026.
According to the statement, the suspension was approved pursuant to Paragraph 26(6) of the Guidelines for the Conferment of the Rank of Senior Advocate of Nigeria and all matters relating to the rank.
The committee explained that the suspension would remain in effect pending the determination of disciplinary proceedings before the LPPC’s Disciplinary and Ethics Sub-Committee, as well as the conclusion of other related proceedings.
While the committee did not disclose details of the allegations against the senior lawyer, it noted that the action was taken in line with its regulatory powers over holders of the prestigious SAN title.
The rank of Senior Advocate of Nigeria is the highest distinction in the legal profession and is conferred on lawyers who have demonstrated exceptional professional excellence and integrity.
News
BREAKING: Senate passes Bill to Establish State Police in Nigeria
The Senate on Wednesday passed the constitutional amendment bill seeking the establishment of state police across the country, marking a major step in ongoing efforts to reform Nigeria’s security architecture.
The approval followed extensive consideration of the proposal by lawmakers during plenary.
Before the vote, senators abandoned plans to use the electronic voting system after the device developed technical issues, raising concerns about the possibility of some lawmakers being excluded from the exercise.
To ensure full participation, the Senate resolved to adopt a manual voting process in which senators openly declared their positions on the bill.
The motion for the adoption of manual voting was moved by the Senate Leader, Senator Opeyemi Bamidele, and received the support of the chamber.
The passage of the bill represents one of the most significant constitutional reforms considered by the National Assembly in recent years, as advocates argue that state policing will enhance local security and improve responses to criminal activities.
The constitutional amendment will, however, require further legislative processes before it becomes fully operational.
News
Court Orders DSS Probe as Prosecutors Link VeryDarkMan to Alleged Leak of Coup Trial Evidence
The trial of six men accused of plotting to overthrow the administration of President Bola Tinubu took a dramatic turn on Tuesday after the Federal High Court in Abuja ordered the Department of State Services (DSS) to investigate the alleged leakage of sensitive court evidence to social media.
During proceedings, prosecuting counsel, Rotimi Oyedepo (SAN), informed the court that video recordings already tendered as evidence had surfaced online. He alleged that the materials were published by social media activist Martins Vincent Otse, popularly known as VeryDarkMan, and noted that the activist was present in court during the hearing.
Oyedepo urged the court to investigate how the videos were obtained and made public.
In response, Justice Joyce Abdulmalik directed the DSS to immediately probe the alleged leak. The judge ordered security operatives to determine whether any protected court materials were released in breach of existing witness-protection orders and to identify those responsible.
Justice Abdulmalik ruled that the investigation should proceed alongside the ongoing criminal trial, stressing that neither the defendants nor their legal representatives had admitted involvement in the alleged publication.
Counsel to the six defendants denied any connection to the leaked materials. Some members of the defence team argued that the prosecution should file a formal application supported by an affidavit if it wished to pursue the matter before the court.
The hearing also featured testimony from the prosecution’s fourth witness, identified only as “DDD,” who maintained that the defendants voluntarily made their statements and were neither tortured nor coerced during interrogation.
The witness dismissed claims that the accused were chained while giving statements, stating that they walked into the interview room unassisted. He further told the court that none of the defendants requested the presence of lawyers, family members, Legal Aid Council officials, or a Justice of the Peace before making their statements.
Following the testimony, the prosecution closed its case in the trial-within-trial after calling four witnesses.
The court adjourned proceedings to June 25 and June 30 for the first three defendants to open their defence, while the remaining defendants are scheduled to present theirs on July 1 and July 2.
Justice Abdulmalik also fixed July 20 for a ruling on the defendants’ bail applications.
The six men remain on trial over allegations of participating in a plot to topple the Tinubu administration—claims they have denied and which the court has yet to determine.
News
Good Governance: Nwoye Harps on Prudent Management of Public Funds, Engagement of Competent Hands
A Senior Lecturer at the Institute of Peace, Conflict and Development Studies (IPCDS), Enugu State University of Science and Technology (ESUT), Dr. Ben Nwoye, has emphasized the need for managers of public institutions, especially government-owned establishments, to prioritize prudent management of resources and the engagement of competent personnel.
Nwoye also stressed that placing qualified and capable individuals in positions of responsibility remains one of the surest ways to achieve good governance and sustainable development in any society.
The former Chairman of the All Progressives Congress (APC) in Enugu State and current Deputy National Chairman (South) of the party made the remarks on Monday during a good governance facility tour to the remodeled Government Technical College (GTC), Enugu, alongside PhD students of IPCDS.
He commended Enugu State Governor, Dr. Peter Mbah, for the transformation of GTC Enugu under the leadership of Dr. Amaka Ngene, Chairman of the Science, Technical and Vocational Schools Management Board (STVSMB), noting that the institution has been transformed from a dilapidated facility into a modern learning centre.
According to Nwoye, the visit was aimed at assessing the progress made since a similar tour of the school in 2025.
He described education as the bedrock of national development and stressed the need for governments to continue investing heavily in the sector.
“The massive transformation that has taken place at GTC Enugu would not have been possible without prudent management of resources and the appointment of capable leadership,” he said.
“When we first visited, what we saw were merely buildings and classrooms without teachers or students. We were also shown videos and photographs depicting the terrible state of the institution before the intervention of the Enugu State Government.
“Today, barely a year later, we have returned to see whether the state-of-the-art facilities have become functional, and we are impressed by what we have seen. There are teachers, students, and fully operational departments.
“This success is largely due to the quality of leadership driving the school board. The desired transformation has truly taken place, and this goes beyond politics. It is about commitment, competence, and prudent management of public funds.”
Nwoye noted that the beneficiaries of the reforms are young people whose lives are being positively impacted through quality education and vocational training.
“We must commend Governor Peter Mbah for providing the enabling environment and resources needed to achieve this. More importantly, we must acknowledge the efforts of the Board Chairman, Dr. Amaka Ngene, who has driven the entire process.”
He added that practical examples such as GTC Enugu provide valuable learning opportunities for students studying governance and leadership.
“The challenge in our country is not the absence of laws but our failure to implement them. Previous boards allowed this institution to remain in a deplorable condition. What we are seeing today demonstrates what is possible when competent individuals are entrusted with leadership responsibilities.”
Nwoye expressed satisfaction with the outcome of the tour, stating that his students were impressed by the level of transformation witnessed across the institution.
“It is gratifying because when we teach governance principles in the classroom, we can now point to practical examples where those principles are being applied successfully. Sustainable development can only be achieved when education is treated as a priority,” he said.
Speaking during the tour, Dr. Ngene attributed the board’s achievements to a fortified database system, zero tolerance for corruption, truancy, and absenteeism, as well as a commitment to accountability and efficiency.
She also praised Governor Mbah for his commitment to education, describing the ongoing reforms as an education revolution in Enugu State.
According to her, the state’s investment in education has surpassed the UNESCO recommendation of 15 to 20 per cent budgetary allocation to the sector.
“Over the last three years, Enugu State has consistently allocated an average of 23 per cent of its budget to education, reflecting the governor’s commitment to human capital development,” she disclosed.
During the facility tour, the visiting students inspected several functional departments, including the automobile repair workshop, welding and fabrication unit, computer laboratory, garment-making section, and hospitality and catering department.
The facilities provide practical vocational training for senior students, equipping them with employable skills and entrepreneurial opportunities for the future.
Dr. Ngene maintained that Governor Mbah’s administration has demonstrated the impact of good governance through strategic investments in education and human capital development, adding that the results are already evident across the state.
News
Post-Election Cleanup: Enugu Cracks Down on Unauthorized Outdoor Advertising
With the successful conclusion of the Enugu North Senatorial District by-election, the Enugu State Structures for Signage and Advertisement Agency (ENSSAA) has announced plans to commence a statewide enforcement exercise against unauthorized outdoor advertisements across the state.
The Agency said the operation would target illegally displayed posters, billboards, political campaign materials, banners, and other outdoor advertisements erected without the approval and requisite permits of ENSSAA.
In a statement issued on Monday by the General Manager of the Agency, Mr. Francis Aninwike, ENSSAA said the enforcement exercise would be carried out across Enugu metropolis and all the local government areas of the state in accordance with the provisions of the ENSSAA Law 2016, which regulates outdoor advertising and signage in Enugu State.
Aninwike explained that the Agency deliberately suspended the enforcement exercise in recent weeks to allow the Enugu North Senatorial District by-election to be concluded and to avoid giving political coloration to what is essentially a long-overdue regulatory exercise aimed at restoring order, sanity, and environmental aesthetics within the state’s outdoor advertising space.
He stressed that no individual, political party, candidate, organization, or business is permitted to erect, display, or paste advertisements, including political campaign materials, without first obtaining the approval of the Agency.
According to him, political parties, candidates, and other stakeholders are advised to immediately regularize their advertisements and obtain the necessary permits before displaying campaign materials or other outdoor advertisements in any part of the state.
The General Manager noted that the proliferation of unauthorized advertisements constitutes a violation of the law, contributes to visual pollution, defaces public infrastructure, and undermines the beauty of the environment.
He emphasized that the enforcement exercise is neither targeted at any individual nor directed against any political group.
“This enforcement exercise is not targeted at any individual or political group. It is a routine regulatory action aimed at ensuring compliance with the law and maintaining a clean, orderly, and aesthetically pleasing environment across the state,” Aninwike stated.
To ensure a smooth and peaceful operation, ENSSAA said it has secured armed police escorts for its enforcement teams. The exercise will be conducted daily between 8:00 a.m. and 6:00 p.m.
The Agency urged members of the public to comply with extant regulations and refrain from obstructing officials carrying out their lawful duties.
Aninwike reiterated ENSSAA’s commitment to sanitizing the outdoor advertising sector, enforcing compliance with relevant laws, and ensuring that outdoor advertisements across Enugu State conform to approved standards.
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