Business
FAAC disbursements hit N10.45 trillion in five months
Allocations from the Federation Account Allocation Committee (FAAC) surged to N10.45 trillion in the first five months of 2026, representing a 25.85 per cent increase compared with the corresponding period of 2025, providing a significant revenue boost to the federal, state and local governments. However, economists and public finance experts are warning that the impressive growth masks deeper structural weaknesses in Nigeria’s fiscal framework that could pose risks to long-term economic stability.
The strong revenue performance has been driven by a combination of higher tax collections, improved oil receipts, foreign exchange reforms, increased customs revenues and gains from ongoing fiscal reforms aimed at expanding government income.
The development has provided much-needed relief for governments grappling with rising expenditure demands, infrastructure deficits and growing public expectations for improved social services.
Data from FAAC allocations show that the federation has recorded one of its strongest revenue performances in recent years, with monthly distributions consistently exceeding levels recorded during the same period last year.
The increase has translated into larger allocations for states and local governments, many of which depend heavily on FAAC receipts to fund recurrent expenditures, capital projects and debt obligations.
For state governments, the higher allocations have helped improve cash flow positions, support salary payments and fund ongoing infrastructure projects.
Several governors have credited recent fiscal reforms for strengthening revenue inflows and creating greater financial stability at the sub-national level.
The Federal Government has also benefited from increased revenues, providing additional fiscal space for implementing budget priorities, servicing debt and financing strategic development initiatives.
A major contributor to the growth in allocations has been the significant improvement in non-oil revenue collection.
Recent tax administration reforms, digital compliance measures and expanded efforts to plug leakages have boosted collections from corporate taxes, value-added tax and customs duties.
Revenue-generating agencies have reported stronger performance as government intensifies efforts to diversify income sources away from oil dependence.
Analysts note that the increasing contribution of non-oil revenue reflects a gradual shift toward a more diversified fiscal structure, reducing some of the vulnerabilities associated with fluctuations in crude oil prices.
The oil and gas sector has also contributed to improved federation revenues.
Higher production levels, improved security in some oil-producing areas and stronger export earnings have helped enhance government receipts from petroleum-related sources.
In addition, foreign exchange reforms have increased the naira value of dollar-denominated oil revenues, resulting in larger allocations when converted into local currency.
The commencement of domestic refining activities and improvements in energy-sector operations have also contributed to broader optimism regarding future revenue growth.
Despite the positive headline figures, economists caution that rising FAAC allocations do not necessarily indicate a fundamentally stronger fiscal position.
Many analysts argue that a significant portion of the revenue growth reflects inflationary pressures, exchange-rate adjustments and temporary factors rather than sustainable expansion in economic productivity.
They warn that government revenues remain highly vulnerable to external shocks, including fluctuations in global oil prices, exchange-rate volatility and changing international economic conditions.
According to public finance experts, Nigeria’s fiscal structure continues to face challenges related to narrow tax coverage, heavy dependence on a limited pool of taxpayers and persistent weaknesses in revenue mobilization across several sectors.
One of the major concerns raised by analysts is the continued dependence of many states on FAAC distributions.
Despite receiving larger allocations, numerous states still generate relatively low levels of internally generated revenue (IGR), leaving them exposed to potential disruptions in federal revenue flows.
Experts argue that without significant improvements in domestic revenue generation, states may struggle to sustain development spending if federation revenues decline in the future.
The reliance on monthly allocations has also raised questions about fiscal discipline and the effectiveness of public expenditure management across different tiers of government.
Fiscal experts further note that stronger allocations have not eliminated concerns surrounding Nigeria’s growing debt obligations.
Although revenue collections have improved, debt servicing continues to consume a substantial portion of government income.
Analysts warn that unless revenue growth is matched by prudent expenditure management and sustained economic expansion, higher allocations alone may not significantly improve fiscal sustainability.
There are also concerns that increased revenues could encourage additional borrowing rather than promote fiscal consolidation.
Economic stakeholders are urging governments at all levels to utilize the current revenue windfall to implement structural reforms capable of strengthening long-term fiscal resilience.
Such reforms include expanding the tax base, improving expenditure efficiency, investing in productive infrastructure and supporting sectors capable of generating sustainable economic growth.
Experts also advocate greater transparency in public spending, arguing that higher allocations should translate into measurable improvements in healthcare, education, transportation and other critical sectors.
They caution against using the revenue gains primarily for recurrent expenditures, warning that such an approach could limit the long-term benefits of the current fiscal improvement.
While the N10.45 trillion distributed through FAAC during the first five months of 2026 highlights the impact of ongoing fiscal reforms and stronger revenue collection efforts, analysts believe the true test will be whether governments can convert the revenue surge into sustainable economic development.
The consensus among experts is that the current increase in allocations provides an opportunity to strengthen public finances, diversify revenue sources and reduce structural vulnerabilities. However, failure to address longstanding fiscal challenges could leave Nigeria exposed to future revenue shocks despite today’s encouraging numbers.
As governments enjoy higher allocations and stronger cash flows, attention is increasingly shifting from the size of revenues to how effectively those resources are managed and whether they can deliver lasting economic transformation for the country.
By Philippine Duru
philippineobetoduru@gmail.com
08034905774
Nigeria has warned EgyptAir to modernise the aircraft deployed on its Nigerian routes, stressing that continued use of ageing planes could affect the airline’s operations in the country.
The Minister of Aviation and Aerospace Development, Festus Keyamo, gave the warning during a bilateral meeting with his Egyptian counterpart, Sameh El-Hefny, on the sidelines of the ongoing El-Alamein International Airshow (EIAS 2026) in Egypt.
According to a statement issued by Keyamo’s media aide, Tunde Moshood, the meeting focused on improving air connectivity between Nigeria and Egypt and strengthening cooperation between the two countries’ civil aviation authorities.
The discussions also covered the expansion of technical and professional capacity, as well as opportunities for greater collaboration among airlines, airports, regulators and other aviation stakeholders.
Keyamo specifically urged EgyptAir to deploy newer-generation aircraft on its Nigerian routes, rather than continuing with what Nigeria considers ageing aircraft.
“The minister also used the engagement to emphasise the need for a stronger and more modern fleet deployment by EgyptAir on its Nigerian routes,” Moshood said.
He said Keyamo urged the airline’s management to move away from the continued deployment of ageing aircraft and prioritise newer-generation aircraft in the Nigerian market.
According to the minister, fleet modernisation was essential to improving passenger experience, operational efficiency and the airline’s competitiveness.
Keyamo further stressed the strategic importance of Nigeria-Egypt aviation relations, noting that both countries occupy important positions within Africa’s aviation ecosystem.
He reaffirmed Nigeria’s commitment to expanding strategic international partnerships to improve air connectivity, promote tourism and trade, support airline growth and deliver greater value to passengers and the aviation industry.
The Nigerian delegation also expressed the country’s readiness to work with Egypt’s Ministry of Civil Aviation to identify areas of mutual cooperation, particularly within the framework of the Single African Air Transport Market (SAATM).
Responding, El-Hefny welcomed the engagement and reaffirmed Egypt’s commitment to deepening aviation cooperation with Nigeria.
He called for closer collaboration between the two countries to advance air transport development and strengthen links between their aviation industries.
The Egyptian minister also advocated stronger institutional cooperation between the African Civil Aviation Commission (AFCAC) and the League of Arab Civil Aviation (LACA).
“Enhanced collaboration between the two regional aviation bodies could promote stronger partnerships and facilitate greater cooperation among African and Arab States,” El-Hefny said.
The meeting ended with both ministers reaffirming their commitment to sustained dialogue, stronger institutional cooperation and initiatives aimed at delivering tangible benefits to the aviation sectors of Nigeria and Egypt.
Philippine Duru
philippineobetoduru@gmail.com
08034905774
Akwa Ibom State Governor, Umo Eno, has recounted his early experience in entrepreneurship, revealing that he once made not less than ₦10 million in a month from selling akara and bread.
Eno, who spoke while reflecting on his journey before entering public service, said the business experience played an important role in shaping his understanding of enterprise, hard work and wealth creation.
According to the governor, he started from a modest venture involving the sale of akara and bread before gradually expanding his business activities.
“I started selling akara and bread. I made not less than ₦10m in a month,” Eno said.
The governor’s account highlights the entrepreneurial path he pursued before rising through the ranks in business and eventually becoming governor of Akwa Ibom State.
Eno has frequently emphasised the importance of entrepreneurship and economic empowerment, particularly as a means of creating opportunities for young people and reducing dependence on government employment.
His recollection of the akara and bread business also underscored his view that small businesses, when properly managed and supported, can grow into significant sources of income and employment.
The governor’s comments come amid growing conversations around entrepreneurship, youth empowerment and the need to create sustainable livelihoods in Nigeria, where many young people are turning to small and medium-scale enterprises to earn a living.
Eno has continued to advocate policies and initiatives aimed at expanding economic opportunities and encouraging residents to become self-reliant through productive ventures.
His story of moving from selling akara and bread to occupying the highest political office in Akwa Ibom has also been presented as an example of how entrepreneurship, persistence and business experience can shape an individual’s journey to leadership.
The Nigerian Exchange Limited (NGX) rebounded last week, with the All-Share Index (ASI) gaining about 0.81 per cent to close at 241,298.47 points, as renewed investor interest in oil and gas and banking stocks lifted market sentiment.
The week’s gain translated into an estimated ₦1.29 trillion increase in market capitalisation, pushing the value of listed equities to about ₦155.83 trillion.
With the latest appreciation, the NGX’s year-to-date return remained strong at approximately 55 per cent, underscoring the market’s substantial gains despite intermittent periods of profit-taking and volatility.
The recovery was largely driven by buying interest in oil and gas and banking stocks, with Seplat Energy among the notable gainers during the week.
Market sentiment also received a boost from developments in Nigeria’s international financial-market standing. FTSE Russell confirmed the country’s reclassification to Frontier Market status, effective September 21, 2026, a move expected to influence international investor positioning toward Nigerian equities.
Further support came from Moody’s decision to revise Nigeria’s outlook to positive, reinforcing expectations that ongoing economic and fiscal reforms could improve the country’s credit profile.
Despite the positive performance, trading activity was relatively subdued, partly reflecting the shortened trading week. Market volume declined as investors adopted a more cautious approach amid prevailing economic uncertainties and profit-taking pressures.
Analysts said the latest rebound highlights continued investor appetite for fundamentally strong sectors, although the sustainability of the market’s upward trajectory will depend on macroeconomic conditions, corporate earnings, foreign investor participation and policy developments.
As investors enter a new trading week, attention is expected to remain on the performance of banking and energy stocks, while the implications of Nigeria’s forthcoming Frontier Market reclassification could further shape sentiment and capital flows into the equities market.
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