By Ade Adesokan
The Federation Account Allocation Committee, under the chairmanship of Honourable Minister of Finance and Coordinating Minister of the Economy Wale Edun, has distributed ₦1.659 trillion to Nigeria’s three tiers of government as Federation Allocation for May 2025, drawn from a gross total of ₦2.942 trillion. This distribution to the federal government, 36 state governments, and 774 local government councils represents a decrease of ₦22 billion from the ₦1.681 trillion shared in April, according to the Office of the Accountant General of the Federation disclosed through director of press and public relations, Bawa Mokwa. The total revenue was shared among the three tiers of government in line with the established revenue-sharing formula, with the Federal Government receiving ₦538.004 billion, states getting ₦577.841 billion, local government councils obtaining ₦419.968 billion, while oil-producing states received ₦124.076 billion as derivation revenue representing 13% of mineral revenue.
The allocation breakdown reveals significant increases in key revenue streams, with Value Added Tax rising from ₦642.265 billion in the previous month to ₦742.820 billion in May 2025, representing an increase of ₦100.555 billion. Gross Statutory Revenue also improved from ₦2.084 trillion to ₦2.094 trillion, marking a ₦10.023 billion increase. These improvements were driven by significant increases in Companies Income Tax, Value Added Tax, and Import Duty, though Petroleum Profit Tax, oil and gas royalty, and Electronic Money Transfer Levy recorded decreases.
Yet despite these substantial and growing allocations, ordinary Nigerians continue to grapple with deteriorating infrastructure, inadequate public services, and persistent poverty that affects over 133 million citizens. The fundamental challenge lies not in the quantum of resources available, but in the systemic failures that prevent these funds from translating into tangible improvements in citizens’ lives. This disconnect between allocation and impact demands urgent examination and reform.
Nigeria’s infrastructure deficit remains glaring despite increased revenue flows. Roads across the federation continue to deteriorate, with many becoming impassable during rainy seasons. Climate change impacts have intensified these challenges, with devastating flooding in Kogi State rendering major transportation routes unusable and displacing thousands of residents. The situation is further compounded by incessant terrorist group attacks in various parts of the country, particularly affecting states like Enugu and Benue, where farmers have been forced to abandon their lands and communities have been cut off from essential services. Public hospitals operate with outdated equipment and insufficient supplies, forcing citizens to seek expensive private alternatives or travel abroad for medical care. Schools lack basic facilities, contributing to educational outcomes that fail to prepare young Nigerians for a competitive global economy. These mounting challenges directly impact ordinary Nigerians’ access to good roads, adequate housing, food security, and sustainable agriculture, as resources that should address these fundamental needs are either misallocated or fail to reach the communities most in needs.
The ₦1.659 trillion allocation theoretically provides sufficient resources to begin addressing these challenges systematically, particularly given the consistent growth in revenue streams. The total distributable revenue comprised ₦863.895 billion from Statutory Revenue, ₦691.714 billion from Value Added Tax, ₦27.667 billion from Electronic Money Transfer Levy, and ₦76.614 billion from Exchange Difference. However, the persistent gap between resource availability and service delivery suggests fundamental problems in how these funds are managed and deployed, with ₦111.908 billion allocated for collection costs and ₦1.171 trillion designated for transfers, intervention and refunds.
Evidence increasingly points to widespread mismanagement and diversion of public funds, particularly at state and local government levels. The lack of transparency in budget implementation creates an environment where resources intended for public benefit often end up serving private interests. Many local government areas operate without functional websites or accessible public records, making it virtually impossible for citizens to track how their money is being spent.
This opacity is compounded by the practice of state governors allegedly interfering with local government allocations, undermining the constitutional principle of local government autonomy. When funds meant for grassroots development are diverted or misused, the communities that need these resources most are left without essential services.
The impact of poor resource utilization is most pronounced in rural areas, where multidimensional poverty remains entrenched. Despite Nigeria’s status as Africa’s largest economy, rural communities often lack access to clean water, reliable electricity, quality healthcare, and educational opportunities. These are precisely the areas where effective deployment of FAAC allocations could make the most significant difference.
The concentration of development activities in urban centers, while rural areas remain neglected, perpetuates inequality and drives continued rural-urban migration that strains city infrastructure and services.
Civil society organizations and concerned citizens are increasingly vocal in demanding accountability measures that would ensure public funds serve their intended purpose. These demands include mandatory publication of detailed expenditure reports, direct disbursement mechanisms that bypass potential state-level interference, and strengthened oversight functions by state assemblies and citizens’ groups.
The call for transparency is not merely about good governance principles; it represents a practical necessity for ensuring that public resources generate measurable improvements in citizens’ quality of life.
The solution requires a comprehensive yet practical approach that addresses both structural and procedural challenges through achievable reforms. Establishing a Special Three-Tier Monitoring Committee represents the most viable pathway forward, comprising representatives from civil society organizations, the judiciary, media representatives coordinated through the Federal Ministry of Information, and professional accounting bodies including the Institute of Chartered Accountants of Nigeria and the Association of National Accountants of Nigeria. This committee would work alongside regular oversight functions by the National Assembly to monitor how these challenges are being addressed by federal, state, and local government authorities across Nigeria.
This monitoring framework would operate through quarterly assessment cycles, requiring each tier of government to submit detailed expenditure reports and performance metrics tied to specific development outcomes. The committee would have constitutional backing to access government financial records, conduct field inspections of projects, and publish public scorecards rating government performance in key areas including infrastructure development, healthcare delivery, education provision, and security enhancement. Professional accounting bodies would provide technical expertise in financial auditing, while civil society representatives would ensure community perspectives are captured and grassroots concerns addressed.
The media component, coordinated through the Federal Ministry of Information, would ensure transparent communication of findings to the public through quarterly town hall meetings, radio programs in local languages, and digital platforms accessible to rural communities. Judicial representatives would provide legal oversight to ensure due process in investigations and enforcement of recommendations. The National Assembly’s oversight function would be strengthened through mandatory bi-annual hearings where government officials must account for allocation utilization and demonstrate measurable progress in addressing identified challenges.
Implementation would begin with pilot programs in severely affected states like Kogi, Enugu, and Benue, focusing on immediate challenges such as flood recovery, security infrastructure, and agricultural support systems. Success metrics would include completion rates of budgeted projects, improvement in service delivery indicators, and citizen satisfaction surveys conducted by independent polling organizations. Governments demonstrating consistent improvement would receive additional federal support, while those showing persistent poor performance would face graduated sanctions including direct federal intervention in specific sectors.
Nigeria stands at a critical juncture where the resources for transformation are available, but the systems for effective utilization remain inadequate. The ₦1.659 trillion FAAC allocation represents more than just numbers on a ledger; it embodies the hopes and expectations of millions of Nigerians who deserve better roads, schools, hospitals, and opportunities.
The choice before Nigeria’s leaders is clear: continue with business as usual and watch these resources disappear into the familiar black hole of mismanagement, or embrace the transparency and accountability measures that would unlock the transformational potential of these substantial and growing allocations. With revenue streams like VAT showing remarkable growth of over ₦100 billion month-on-month, the resource base exists to drive meaningful development.
The path forward requires political will, citizen engagement, and systemic reforms that prioritize results over rhetoric. Only through such comprehensive changes can Nigeria ensure that its substantial resource endowment translates into genuine improvements in citizens’ lives rather than missed opportunities for development.
The time for excuses has passed. With ₦1.659 trillion in public resources at stake, Nigeria cannot afford another cycle of allocation without corresponding impact. The nation’s development trajectory depends on getting this fundamental equation right: public resources must serve public purposes, and citizens must see tangible returns on their collective investment in governance.
Without these changes, even larger allocations in the future will fail to address the basic needs that define quality of life for ordinary Nigerians. The choice is not whether Nigeria has the resources for development, but whether it has the commitment to use them effectively.
Ade Adesokan is a public affairs commentator
