Subsidy Windfall: How Governors Claim to Spend Rising FAAC Allocations
SINCE the removal of fuel subsidy in May 2023 and the introduction of new tax measures, monthly statutory allocations to Nigerian states have surged to record levels. Between January and June 2025 alone, the Federation Account Allocation Committee (FAAC) disbursed trillions of naira across the six geo-political zones, with the South-South leading at ₦1.56 trillion, followed by the South-West with ₦1.14 trillion and the North-West with ₦1.13 trillion. Other zones — North-Central (₦799.05 billion), North-East (₦745.11 billion), and South-East (₦650.02 billion) — also received significant boosts.
Despite the windfall, Nigeria’s poverty numbers continue to rise. A World Bank and National Bureau of Statistics (NBS) report shows that 129 million citizens now live below the poverty line, up from 104 million in 2023 — an additional 25 million people falling into poverty within one year. Analysts argue that the surge in state allocations has not translated into proportional improvements in development or welfare.
State governments, however, insist otherwise.
In Nasarawa, officials point to Governor Abdullahi Sule’s infrastructure drive, citing completed flyovers, urban road projects, and electric vehicle schemes, all without recourse to borrowing. The administration says peace and security have attracted investors, including a planned lithium processing plant.
Kaduna’s government highlights over 82 road contracts, hundreds of classrooms, dozens of new secondary schools, and free fertiliser distribution to farmers. Governor Uba Sani, officials argue, is balancing inherited debt obligations with social investments.
In Kebbi, spending details remain closely guarded. Officials confirmed that allocations flow monthly but emphasised that Governor Nasir Idris alone decides priorities, with directives given to local government councils to execute development projects.
Akwa Ibom, by contrast, faces criticism from residents and civil society groups who accuse Governor Umo Eno of prioritising cash donations and tourism ventures over core infrastructure. Observers point to stalled rural electrification and ecological challenges, alleging misuse of funds to consolidate political support ahead of 2027.
Delta State touts major infrastructure under Governor Sheriff Oborevwori’s “MORE Agenda,” including flyovers, bridges, and roads to riverine communities, alongside healthcare upgrades and youth empowerment programmes.
In Imo, Governor Hope Uzodimma’s administration highlights worker welfare, with a new ₦104,000 minimum wage, consistent gratuity payments, and investments in digital economy projects. Officials describe the state as undergoing an unprecedented transformation across health, education, infrastructure, and ICT.
Abia claims that Governor Alex Otti’s ambitious ₦750.3 billion budget, later expanded with a ₦150.3 billion supplementary allocation, reflects the administration’s aggressive rollout of infrastructure and development projects.
Gombe officials say Governor Inuwa Yahaya prioritises citizens through accountable spending, with investments in healthcare, education, and infrastructure, backed by strict monitoring systems and public procurement reforms.
Benue reports that Governor Hyacinth Alia has prioritised grassroots development — from timely salary and pension payments to housing projects and agricultural initiatives.
Enugu’s Governor Peter Mbah has tied increased revenue to ambitious projects, including 7,000 classrooms, 3,300 hospital beds, and farm estates across all wards.
Niger State says Governor Mohammed Umaru Bago is using allocations to drive agribusiness, build 1,000km of roads, expand healthcare, and strengthen education, with the aim of creating a “New Niger.”
Across the board, governors insist subsidy savings are being prudently utilised. But with poverty deepening and inflation rising, many Nigerians remain unconvinced. For analysts, the real test lies not in government press releases but in tangible improvements in living standards — a reality still elusive for millions.
