FRESH data from the Federation Account Allocation Committee (FAAC) and TheCable Index have highlighted sharp disparities in Value Added Tax (VAT) contributions and receipts across Nigeria’s geopolitical zones for the first half of 2026, sparking renewed debate on fiscal federalism and the country’s revenue redistribution model.
The South-West zone emerged as the dominant contributor, injecting N2.16 trillion into the national VAT pool between January and June 2026. Despite this massive input, the zone received only N691.56 billion in allocations – equivalent to 31.99 percent of its contribution
The South-South followed with N880.58 billion contributed and N429.99 billion received (48.83 percent).
In contrast, northern zones and the South-East received significantly more than they generated. The North-Central contributed N302.81 billion but received N350.17 billion (115.64 percent). The NorthWest paid in N205.52 billion and got back N384.56 billion (187.11 percent), while the North-East contributed N152.82 billion and received N285.70 billion (186.95 percent). The South-East recorded the lowest contribution at N79.27 billion yet received N230.89 billion — a staggering 291.28 percent of its input.
The figures underscore a deliberate redistribution strategy embedded in Nigeria’s fiscal framework.
Analysts say the pattern is neither accidental nor surprising given the existing revenue-sharing formula, which heavily weights equality, population, and derivation.
Mr. Benjamin Akinsoto, Senior Researcher at BAA Consult, expressed no surprise at the data. “This has fundamentally been like that in Nigeria,
“he said.
“Actual distribution is not based primarily on what was contributed per se, but it’s more like a redistribution mechanism. About 50 percent is proportional to equality, around 30 percent considers population and we all know that the Northern region has the most population. Also, about 20 percent is for derivation.” Akinsoto, noted that while the South-West, driven by economic hubs like Lagos, contributed roughly 57 percent of the total VAT pool, it received just about 29 percent of distributions.
At the other extreme, the South-East received nearly three times its contribution.
