The Federal Government and various levels of government allocated a total of N3.56tn as savings from Federation Account revenue from January to September 2026, even as the Federal Government increasingly depended on borrowing to cover its budget deficit.
The figure shows a 95 percent rise from the N1.83tn noted in the same period of 2025, prompting inquiries regarding the nation’s fiscal priorities in light of growing public debt and increasing debt-servicing responsibilities.
A report by Agora Policy, named Ten Insights from FAAC Disbursements for January-September 2026, reviewed on Friday, indicated that savings and interventions made up N8.34tn of deductions from Federation Account revenue within the nine-month timeframe.
The report listed interventions deductions at N4.78tn, marking it the largest category, while savings totaled N3.56tn. Combined, the two categories accounted for 75.1 percent of overall deductions, in contrast to 39.9 percent during the similar timeframe of 2025.
The report stated, “Interventions made up the biggest reduction, totaling N4.78tn, followed by savings at N3.56tn.” Over nine months, refunds reached N1.21tn while collection expenses totaled N1.09tn. Transfers, totaling N469.06bn, represented the least category.
The significant rise in savings occurred amid the Federal Government’s broader borrowing initiative for 2026. The government increased its borrowing goal by N11.31tn to N29.20tn from the previous N17.89tn estimate, and the budget deficit reached N31.46tn.
In the 2026 budget, total spending is estimated at N68.32tn compared to anticipated revenue of N36.87tn, resulting in a significant financing deficit that will be primarily addressed through loans.
The Agora report indicated that total deductions from the Federation Account revenue experienced a minor decrease of 3.5 percent, falling from N11.50tn in the first three quarters of 2025 to N11.10tn in the equivalent timeframe of 2026.
Their portion of total revenue declined from 41.1 percent to 35.3 percent, enabling distributable revenue prior to augmentation to increase by 23.8 percent to N20.36tn.
Total revenue in the Federation Account rose by 12.6 percent, from N27.95 trillion to N31.46 trillion, over the period.
The report indicates that the N3.91tn rise in distributable revenue surpassed the N3.51tn increase in gross receipts due to a reduction of about N400bn in deductions.
It indicated, “The slight decrease in overall deductions hides a significant shift in their makeup. Refunds declined by around N3.99tn, shifting from the top deduction category to the third-largest.
“At the same time, interventions and savings grew by about N3.75tn, rising from N4.59tn to N8.34tn.” Combined, interventions and savings made up 75.1 percent of deductions over nine months in 2026, in contrast to 39.9 percent during the same timeframe in 2025.
A more detailed analysis revealed that refunds fell by 77 percent, decreasing from N5.20tn in the initial nine months of 2025 to N1.21tn in 2026.
Nonetheless, the deductions pertain to the Federation Account and must not be viewed as savings kept exclusively by the Federal Government. The income is distributed among the Federal Government, states, and local governments according to the current allocation agreements.
The Federal Government has justified its borrowing approach, contending that rising expenditure demands have surpassed extra non-borrowed funds and that borrowing is essential to support infrastructure and various development goals.
In its financial defense, the government has highlighted increasing personnel expenses, debt obligations, electricity aid, and infrastructure duties as significant strains on public finances.
A declaration from the Presidency regarding its infrastructure investment approach indicated that borrowing is now focused on productive assets instead of immediate consumption. It also recognized the burden of debt service, which reached approximately 65 percent of revenue in the first half of 2026.
