Since President Bola Tinubu took office, state allocations have increased due to the removal of subsidies and exchange rate reforms. The Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that the federal government withheld a significant N800 billion from state allocations in 2024 to service foreign debts and fulfill other contractual obligations. Lagos state lost the most money in the most recent arrangement, followed by Rivers, Delta, and Bauchi state.
This deduction, which was revealed in NEITI’s quarterly analysis published on Tuesday, March 18, 2025, demonstrated the financial burden that states were under even while the Federation Accounts Allocation Committee (FAAC) was disbursing record-high amounts. The FAAC allocations jumped to N15.26 trillion in 2024, a notable 43% rise from the year before, according to Obiageli Onuorah, acting director of communication and stakeholders management.
Fiscal policies including the elimination of gasoline subsidies and exchange rate modifications were blamed for this spike.
