Since President Bola Ahmed Tinubu assumed office in May 2023, revenues and federal government interventions to Nigeria’s 36 states and the Federal Capital Territory (FCT) have surged by over 90%, compared to allocations during President Muhammadu Buhari’s administration. This significant increase stems from the removal of the subsidy on Premium Motor Spirit (PMS), redirecting funds previously used for subsidies into the Federation Account Allocation Committee (FAAC) for distribution.
Between June 2023 and December 2024, federal, state, and local governments have collectively received over ₦25 trillion through monthly FAAC disbursements. The most recent allocation of ₦1.727 trillion in November 2024 marks a 22.5% increase compared to October’s ₦1.41 trillion.
Additionally, the Tinubu administration has disbursed more than ₦500 billion in palliatives over the past 18 months to mitigate the impact of the subsidy removal on Nigerians. These interventions include direct cash support, food supplies, and agricultural inputs such as fertilizers. States affected by natural disasters—such as flooding, terrorist attacks, and fires—have also benefited from targeted federal aid.
In August 2024, states received ₦573 billion from a World Bank zero-interest loan to fund infrastructural projects. Despite these substantial financial inflows, many state governors claim they face challenges in meeting fiscal demands, including implementing the newly approved ₦70,000 minimum wage. Strikes and protests have erupted in some states where workers have accused their governments of failing to prioritize this commitment.
Governance Under Scrutiny
President Tinubu has called for increased accountability and prudent management of resources at the state level. While some governors have demonstrated effective use of funds through innovative governance and tangible projects, widespread concerns persist about underperformance in many states. The President emphasized that the growing FAAC allocations must translate into improved infrastructure, economic development, and quality of life for citizens.
“State governors must step up in 2025,” a presidency source noted. “We need visible evidence of good governance that goes beyond political slogans and ceremonial photo opportunities.”
Tinubu has also advocated for greater autonomy for local governments to drive grassroots development. He urged Nigerians to hold state governors accountable, reminding citizens that governance responsibilities are clearly delineated between federal, state, and local authorities.
Internal Revenue Generation (IGR) Challenges
Most states continue to underperform in generating internally sourced revenues. While Lagos State leads with ₦815 billion in IGR in 2023, other states lag far behind, with Kano—a major commercial hub—ranking sixth despite its strategic importance. States like Rivers and the FCT follow Lagos, generating ₦195 billion and ₦217 billion, respectively.
Experts highlight that effective IGR utilization is crucial for complementing federal allocations. “Governors must focus on blocking leakages, fostering public-private partnerships (PPPs), and creating innovative revenue streams without overburdening citizens,” noted a fiscal policy analyst.
A Call for Structural Reforms
The Tinubu administration’s Fiscal Policy and Tax Reform Bill is expected to serve as a game changer for sub-national governance, pushing states to harness their resources effectively. “Nigeria is sitting on immense wealth, from human capital to agricultural and mineral resources. The question is how state governments will leverage these assets to drive sustainable development,” the analyst added.
As 2025 approaches, the focus will increasingly shift to state governors’ performance. Citizens are urged to demand greater accountability to ensure that the unprecedented financial interventions of the Tinubu administration translate into tangible benefits across the nation.
