***Revenue may hit N150trn by year end

***Civil society groups raise alarm, call for outcome-driven approach to public spending

By Emma Ujah, Abuja Bureau Chief

Recent findings from the Revenue Mobilization, Allocation and Fiscal Commission, RMAFC, has indicated that the three tiers of governments in Nigeria have received about N53.3 trillion from the Federation Account Allocation Committee, FAAC, over the past three years (2023 – May 2026).

Also their independently generated revenues over the same period is estimated at about NN65.5 trillion bringing the total revenue they may have spent within the period to about N118.8 trillion. 

Experts expect further rise in revenue to about N150 trillion by end of this year.

The amount spent, however, may be far higher as loans are not included in the money available for spending.

Further breakdown of the revenue figure indicates that the growth rate in revenue is far higher than the pre-economic reform year of 2022.

For instance, revenue distributed to the three tiers of government by Federation Accounts Allocation Committee, FAAC, in 2022, the year preceding the present administration’s reforms averaged N758 billion monthly.

By 2023, monthly average distribution to the three tiers of government moved to about ¦ 845 billion.

But by 2024, the present government’s first full fiscal year, average monthly distribution jumped to about N1. 3 trillion.

In 2025, monthly FAAC distribution rose to about N1.93 trillion. In the first five months of 2026, monthly revenue shared by FAAC averaged about ¦ 2.083 trillion.

The figures above exclude the federal government’s independent revenues and the internally generated revenues of states and local governments.

The massive revenue growth since 2023, according to Financial Vanguard findings, was driven by the key reform programmes of the federal government, mainly the removal of petrol subsidy and foreign exchange market liberalisation.

Public affairs analysts who spoke to Financial Vanguard, have expressed concern over the impact of such spending on the economy and livelihood of average Nigerians.

Contrary to expectations, recent reports available to Financial Vanguard indicates that governments at all levels are defaulting in several financial obligations, including payments to contractors for jobs done and verified; payment of pension arrears, both at federal level, while many states are yet to implement the minimum wage standard as agreed within the period of the rapid rise in government revenue.

The situation is now raising fresh concerns over transparency, accountability and the effectiveness of public spending across the tiers of government.

Civil society groups which spoke to Financial Vanguard on the issue, noted that while the citizens have endured hardship as sacrifice for the reforms, the surge in revenues has not yet translated into significant improvements in infrastructure, public services or living standards of average Nigerians.

The federal government, in particular, has struggled with mounting debt service obligations and other liabilities to contractors and pension arrears.

The affected contractors have mounted several protests at the Federal Ministry of Finance headquarters in Abuja, especially while former Minister Wale Edun was in office.

Even the new Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, has been visited with a protest by the contractors since his assumption of office.

Local contractors claim

The ministry was not specific on the amount to be paid in the immediate but revealed that N700 billion had been processed in the last few months.

But the local contractors, who occupied the entrance of the ministry, claimed no such money was received by them.

Last week, the spokesman of the All Indigenous Contractors Association of Nigeria, AICAN, Mr Rotimi Raheem, said only N40 billion had been paid to members of the association, out of the about N280 billion they were expecting.

Poor capital funding

The federal government has also recorded poor capital budget performance over the period.

For instance, the 2023 budget performance report by the Budget Office of the Federation (BoF) showed that out of the aggregate expenditure of N21.83 trillion, the prorata spending target of N12.29 trillion was set for end of July. 

However, the actual spending was N8.60 trillion. Of this amount, N3.94 trillion was for debt service, and N2.68 trillion for personnel cost, including pensions. 

Only about N857.08 billion (25% of the pro-rata budget) had been released for Ministries, Departments and Agencies, MDAs, capital expenditure as of July 2023.

In 2024 a total of ¦ 35.055 trillion was appropriated for expenditure in the 2024 amended budget. Of this amount, N13.773 trillion was earmarked for capital budget (about 39.29 percent) in 2024.

However, the Budget Performance Report of the BoF showed that actual capital expenditure of ¦ 6.17 trillion was spent in the 2024 fiscal year.

Data from the Office of the Accountant General of the Federation, OAGF, on 2024 capital budget performance for MDAs as at June 30, 2024, showed that only a total of ¦ 211.81 billion (inclusive of capital supplementation and AIE service wide) was released to MDAs and cash-backed for 2024 capital projects and programmes in the first half of 2024.

This includes the sum of ¦ 39.17 billion released as first tranche and 37 ¦ 173.27 billion released as AIEs service wide and capital supplementation in the first half of 2024

Data from the OAGF on 2024 capital performance for MDAs as at September 30, 2024, showed that a total of ¦ 4,253.11 billion was released to and cash-backed for MDAs’ 2024 capital projects and programmes. 

The sum of ¦ 615.45 billion was released as first tranche, ¦ 237.30 billion was released as second tranche, and ¦ 6.25 billion was released as third tranche. A total of ¦ 610.10 billion was released as AIEs Service Wide.

The 2025 FG capital budget performance was most abysmal, as government officials admitted that only about 30 per cent was achieved at the end of the year. 

In its Budget 2026 call circular, the government had to roll-over 70 per cent of the 2025 capital to the 2026 fiscal year. 

The poor capital budget implementation from year to year shows the challenges of the federal government’s finances.

Analysts’ insight

Accountability is imperative – Yusuf

Commenting on the fiscal policy situation, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, CPPE, Dr. Muda Yufus, noted the improvement in revenue at all levels of government as an upside of the current administration’s economic reforms.

However, he said: “The critical issue is no longer just revenue growth, but how these resources are managed, disclosed, prioritised and accounted for.

“The accountability framework at the sub-national level remains weak. While FG finances attract some level of scrutiny from civil society, the National Assembly, analysts, the media and the general public, the same cannot be said of many states and local governments. 

‘’Budget information at these levels is often sketchy, poorly detailed and inadequately disclosed. In many cases, citizens have limited access to revenue figures, expenditure breakdowns, procurement details and project implementation reports. This opacity weakens public scrutiny and undermines fiscal accountability.

“There is, therefore, an urgent need to strengthen transparency in state and local government finances. Budget allocations, internally generated revenue, federation account receipts, expenditure details, audit reports and project implementation updates should be made public in accessible formats.

‘‘Citizens cannot demand accountability where information is either unavailable, incomplete or deliberately obscured.

“Beyond disclosure, citizen participation in governance must be deepened. For many citizens, democracy begins and ends with elections. This should not be the case.

‘‘Citizens must engage their councillors, local government chairmen, state legislators and governors on budget priorities, project execution and service delivery.

‘‘The culture of reducing governance engagement to pre-election ‘empowerment’ gestures must give way to a stronger demand for accountability, performance and inclusion.

High revenues have yet to improve Nigerians’ lives – Activist, Baiyewu

Also commenting on the volume of revenue accruing to government without commensurate impact, the Country Director, Global Rights Nigeria, Abiodun Baiyewu, said what would be of interest is how these incomes have stacked against state and federal budgets and also the human development indicators for each state over time and to allow the numbers speak for themselves.

She stated: “From what we know, it has not improved the lives of Nigerians nor significantly improved infrastructure. Mal-governance is palpable on the face of things.”

Baiyewu, who said she didn’t believe most Nigerians were aware of these funds, stated further: “We must commend organizations like BudgIT for bringing them to the fore and creating awareness among citizens. 

‘‘Citizens have to develop a culture of organising themselves to collectively demand accountability of their elected officials and to develop agendas of their own on how they believe that public resources should be expended – that’s participatory governance.”

While calling for greater transparency in government spending, she said: “Government revenue and spending are still very opaque, with little room for engagement at both the federal and state levels. You would hope that with the digitisation of most things that the government would make access easier. ‘’Citizens should be more explicit and vocal in their demands for transparency, accountability and inclusion.”

Integrity, efficiency in deploying revenue needed – ActionAid

Commenting on the sharp increase in monthly FAAC allocations to the three tiers of government in the recent times, the Country Director, ActionAid Nigeria, Dr. Andrew Mamedu, said what was critical was not just the volume of funds but integrity and efficiency in deploying those funds for the development of the nation.

His words: “The scale of monthly allocations from the Federation Account in recent years should, in theory, be transformative for Nigeria’s development trajectory. When you aggregate the flows over time, they represent one of the largest pools of public resources available to drive human development outcomes.

‘‘However, the critical issue is not the volume of funds, but the efficiency, prioritisation and integrity of their use.

“First, there is a structural imbalance in how these funds are deployed. A large proportion of allocations, especially at the state level, is absorbed by recurrent expenditure. This includes salaries, political office costs, overheads and debt servicing.

“The planning framework within which these funds are used is often weak. Budgets are not always tied to credible development plans or measurable outcomes.

‘‘There is often a disconnect between national or state development strategies and actual budget implementation. Projects are sometimes selected based on political considerations, rather than evidence of need or potential impact. This leads to fragmentation, duplication and abandoned projects.

“Macroeconomic conditions significantly dilute the impact of increased allocations. Inflation, exchange rate volatility, and rising costs of materials and services mean that the real value of these funds is far lower than nominal figures suggest. A state that receives double the allocation in naira terms may not be able to deliver double the infrastructure or services.

“Governance constraints remain a major bottleneck. Weak procurement systems, leakages, and in some cases outright corruption reduce the effectiveness of public spending. Even where funds are available, they do not consistently translate into improved service delivery.”

The country director urged public awareness of the allocations, which can guide members of the society to demand accountability.

Mamedu said further: “Public awareness of federation account allocations is limited both in depth and in practical utility. While figures are sometimes reported in the media, they are often presented in aggregate terms without sufficient context or breakdown.

“Most citizens do not know how much their specific state or local government receives, what proportion is expected to go to key sectors, or how to track whether funds are used appropriately.

“To change this, citizens need both access to information and the capacity to use it. CSOs have largely made progress in simplifying budget data, but this needs to be scaled significantly.

“Citizens can also play a more active role in several ways. They can track monthly allocations to their states and local governments and compare these with approved budgets.

“They can demand explanations for discrepancies between planned and actual spending. They can engage elected representatives through constituency offices, town hall meetings, and public hearings.

‘‘Community-based monitoring is particularly powerful. When citizens track specific projects such as schools, roads, or health centers and publicly question delays or poor quality, it creates pressure for better performance.

“The media also has a critical role in translating fiscal data into relatable stories that connect government spending to everyday realities.

‘‘Civil society organisations need to continue to bridge the gap between technical data and citizen action by building awareness, training communities, and facilitating engagement platforms.

“Given the scale of available resources, governments should adopt a more disciplined and outcome-driven approach to public spending.

“The first priority is to rebalance expenditure toward capital and social investment. Governments need to deliberately reduce the share of funds going to non-productive recurrent costs. This does not mean ignoring salaries, but it requires addressing inefficiencies such as ghost workers, inflated contracts, and excessive administrative overheads.

“There must be a stronger alignment between budgets and development priorities. Governments should anchor their spending in clear, medium term development plans with measurable targets.

“Governments should prioritise sectors with high multiplier effects. Investments in agriculture, for instance, can improve food security, create jobs, and reduce inflationary pressures. Investments in infrastructure can stimulate economic activity and attract private sector participation.

“There should be a focus on equity. Increased allocations should be used to reduce regional and social disparities. Vulnerable populations, including women, children, and rural communities, should benefit directly from public spending through targeted programmes.

“Whistleblower protections must be strengthened to encourage reporting of misuse of funds without fear of retaliation. In recent times, there have been worrying instances of whistleblowers facing intimidation or arrest, discouraging others from coming forward.

“Transparency in Nigeria’s public finance system remains inconsistent and generally weak, particularly at the subnational level.

“At the federal level, there has been some progress in publishing budget documents, fiscal reports, and procurement information. However, challenges remain in terms of accessibility, timeliness, and completeness. Data is often fragmented across multiple platforms, making it difficult for citizens to get a comprehensive picture.’’