VAT allocations to states rise 74% to N423 billion in January 2026

VAT allocations to Nigerian states surged by 74% month-on-month to N423.25 billion in January 2026, marking a sharp rebound from the N242.92 billion recorded in December 2025 and signaling stronger revenue flows to subnational governments.

The figures are based on data compiled by the Nairametrics Research Team from the Office of the Accountant General, which also shows that net VAT allocation increased by 77.72% to N412.37 billion during the period.

The increase reflects a broad-based rise in VAT distributions across all states, with both top-performing and lower-ranked states recording significant gains, amid improved tax collection, and a rebound from lower December allocations.

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**What the data is saying **

All states benefited from higher VAT allocations in January, with leading economic hubs maintaining their dominance.

• Lagos State remained the highest recipient, with gross allocation rising to N61.00 billion from N36.10 billion, a 68.98% increase. After a N10.89 billion deduction, net allocation stood at N50.12 billion, solidifying its position as the largest VAT contributor.
• Rivers State followed with N16.89 billion, up from N10.02 billion, reflecting a 68.62% increase.
• Kano State recorded N16.32 billion, rising from N9.31 billion, representing a 75.23% increase.
• Oyo State posted N15.80 billion, up from N9.45 billion, marking a 67.29% increase, maintaining its position among the top recipients.
• Kaduna State saw its allocation rise to N11.99 billion from N7.98 billion, representing a 50.17% increase, one of the more moderate growth rates among the top states.

The next group of states, Katsina, Jigawa, Delta, Niger, and Akwa Ibom, also recorded strong gains, each posting growth between 74% and 96%, with allocations ranging between N10.82 billion and N11.90 billion.

At the lower end, allocations remained smaller but still showed strong growth.

• Taraba State recorded the lowest allocation at N8.10 billion, up from N4.84 billion, representing a 67.42% increase.
• Yobe State followed with N8.21 billion, rising from N5.23 billion, marking a 57.09% increase, one of the slower growth rates in the group.
• Ebonyi State recorded N8.32 billion, up from N4.96 billion, reflecting a 67.77% increase.
• Gombe State posted N8.38 billion, rising from N4.69 billion, representing a 78.73% increase.
• Cross River State recorded N8.73 billion, up from N4.93 billion, marking a 76.99% increase, closing out the bottom tier with solid growth.

Other states such as Nasarawa, Abia, Ekiti, Kwara, and Kebbi recorded allocations ranging from N8.92 billion to N9.09 billion, with growth rates between 71% and over 90%, indicating consistent upward movement nationwide.

What this means

The January VAT data highlights a strong rebound in revenue distribution across states. The increase suggests improved revenue performance, likely supported by better tax compliance, and stronger economic activity.

• The strong growth across both top and bottom states indicates that the increase was widespread, rather than concentrated in a few major economic hubs.
• However, the gap between top and lower-ranked states remains significant, reflecting differences in economic scale and consumption patterns.
• The sharp month-on-month increase also suggests a recovery from weaker December allocations, which may have been affected by seasonal or timing factors.

What you should know

A recent report by Nairametrics revealed that Nigeria’s Federation Account Allocation Committee (FAAC) disbursed a total net allocation of N703.26 billion to states in January 2026, representing a 7.18% increase compared to December 2025.

• The total gross distributable revenue stood at N2.59 trillion, with N546.14 billion allocated to the Federal Government and N511.17 billion to Local Government Councils (LGCs), making states the largest recipients among the three tiers of government.
• The increase in allocations was driven by improved statutory revenues, VAT inflows, and electronic transaction levies, reflecting stronger revenue generation across the economy.

Year-on-year, allocations rose by 32.06% and remained concentrated among top-performing states, with the top 10 accounting for nearly 45% of total disbursements, highlighting a widening fiscal gap.

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