Lagos State has emerged as the highest recipient of federal allocations from the Federation Account Allocation Committee (FAAC) in the first half of 2026, receiving a total of N365.78 billion. This figure surpasses the allocations of major oil-producing states, marking a significant shift in revenue distribution patterns.
Report Highlights Lagos' Dominance
According to a report by Nairalytics, Lagos State's FAAC allocation for January to June 2026 stood at N365.78 billion, the highest among all 36 states and the Federal Capital Territory. This amount represents a substantial portion of the total allocations distributed during the period.
The report indicates that the top five states with the highest FAAC allocations include Lagos (N365.78bn), Delta (N294.35bn), Rivers (N279.12bn), Akwa Ibom (N246.89bn), and Bayelsa (N201.45bn). These figures highlight the continued reliance of states on federal allocations, despite efforts to boost internally generated revenue.
Oil States Follow Behind
Delta State, an oil-rich state, received N294.35 billion, positioning it as the second-highest recipient. Rivers State followed closely with N279.12 billion, while Akwa Ibom and Bayelsa received N246.89 billion and N201.45 billion respectively. These states, known for their crude oil production, have traditionally been top earners from FAAC, but Lagos' rise to the top reflects its growing economic significance.
The report also showed that the total FAAC allocations to all states and the FCT amounted to N4.56 trillion in the first half of 2026. This represents an increase of 15.2% compared to the same period in 2025, according to the Nairalytics report.
Implications for Revenue Sharing
Lagos' top position underscores the impact of its large population and economic activities, which contribute to higher derivation and other revenue-sharing formulas. However, oil-producing states still benefit from the 13% derivation fund, which is a significant source of revenue for them.
Financial analysts have noted that the rise in Lagos' allocation could be attributed to increased collections from Value Added Tax (VAT) and other non-oil revenues. The federal government continues to distribute funds from the Federation Account based on the constitutional revenue allocation formula.
The report's findings are expected to spark discussions on fiscal federalism and the need for states to diversify their revenue sources. As the federal government seeks to reduce dependence on oil, states with robust economic bases like Lagos are likely to continue leading in FAAC allocations.
