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Revenues disbursed to the federal, state, and local governments from the federation account have seen a sharp rise since the inception of the President Tinubu-led administration in 2023, with a total disbursement of over N15.247 trillion in the 2024 fiscal year alone. Despite this humongous amount, the cost-of-living crisis persists, with a rising number of Nigerians facing acute hunger.

According to BusinessDay’s analysis, the total amount disbursed by the Federation Account Allocation Committee (FAAC) in 2024 was about 23.3 percent higher than the N11.69 trillion disbursed in 2022 and also above N14.93 trillion shared in 2023.

During this period, total revenues accruing to FAAC reached over N22 trillion.

This windfall has failed to solve the cost-of-living crisis , as living conditions in Nigerians remain challenging due to the ongoing economic hardships.

Nigeria’s economy fell short of the government growth projection of 3.76 percent for 2024. The economy expanded by 3.1 percent, according to the latest World Economic Outlook of the International Monetary Fund (IMF).

Although unemployment eased to 4.3 percent, by the second quarter of 2024, underemployment remains high, and many Nigerians are engaged in informal or non-paid jobs.

Experts who spoke with BusinessDay said that despite the increase in revenues, factors such as high inflation and exchange rate instability have continued to deny Nigerians of the revenue gains.

Authorities had projected inflation to ease to 21.40 percent but reached 34.8 percent by December 2024. It fell to 24.48 percent in January 2025 after the Consumer Price Index rebasing exercise.

Paul Alaje, a senior economist and partner at SPM Professionals, told BusinessDay that high inflation has continued to take a toll on the purchasing power of most Nigerians, noting that the exchange rate also reduces the value of the government’s revenue when converted to dollars.

“The depreciation of the naira has significantly impacted inflation.

“As the naira weakens, imports become more expensive, leading to higher costs for goods and services, and is particularly pronounced in the country heavily reliant on imported goods,” Alaje noted.

He explained that the instability in the Nigerian economy has continued to deny the citizens of the impact of the surplus revenues generated by the government, reducing what the government can deliver to the citizens.

“What the people are suffering from, and why it’s not evident in their lives, is the issue of instability around the economy. And of the parameters that we use, exchange rate stability takes a centre point, as well as price stability.

“If the exchange rate is high, inflation will be induced and if inflation is induced, poverty will be encouraged. So we need to know this, to have the kind of improvement that we expect.”

According to the World Bank’s Nigerian Development Update report for October 2024, in-work poverty is common in Nigeria as many jobs do not generate earnings that are high enough to escape poverty.

The report indicates that poverty is high and rising in Nigeria, with more than half of the population living in poverty.’

This partly reflects the modest overall pace of economic growth, which is insufficient to compensate for the erosion of purchasing power brought about by inflation.

“The government has seen a significant increase in its revenue lately but that would mean nothing to the people because of the high cost of living currently being experienced across the country. The truth is that the exchange rate is everything,” Alaje added.

Also speaking with BusinessDay, Iniobong Usen, head of Research and policy advisory at BudgIT Nigeria, said that without a significant decrease in inflation, the government may continue to record increases in its revenue and spending – without any impact on the economy.

According to Usen, naira has been devalued four times when compared to 2022. This, he said, means that the current value of the government’s revenue cannot equate to what it was two years ago.

“As of 2022, the dollar was pegged at about N380, the dollar now is about N1,500, meaning at the very least, your currency has devalued or has been devalued by four times.

“Together with that, there is inflation. Services and workers have changed. What it would have cost you to build a 1km road in 2022 is not the same as what it would cost you now.

“What it would have cost you to purchase, whether it is vehicles or bikes or minibuses as palliatives or as environmental equipment, is not the same as what it would cost you now. What it would have cost you to purchase sewing machines, to purchase agricultural inputs in 2022 is not the same as what it would cost you now.

“It’s not just enough to see an increase in FAAC allocations but we have to consider other parameters like rising costs,” he said.

Auwal Musa Rafsanjani, executive Director of Civil Society Legislative Advocacy Centre (CISLAC), decried the weak economic framework in Nigeria which, according to him, is built on looting, consumption and reckless spending of public funds.

This, he said, will not allow the government to make a meaningful impact on society.

While blaming the level of corruption in government, he however called on Nigerians to actively engage government, to drive accountability and transparency in the side of government.

He said, “If you have an economic framework that is based on only looting and stealing and consumption and recklessness and waste, there’s no way you can reduce poverty, unemployment, insecurity.

“So, we must be able to hold them accountable, otherwise, no matter how high the government’s revenue gets, it may not impact the common man.”