The Federal Government and other tiers of government recorded N3.56tn in savings from Federation Account revenue between January and September 2026, even as the Federal Government raised its borrowing target for the year to N29.2tn.
The savings figure was nearly double the N1.83tn recorded in the corresponding period of 2025, according to an Agora Policy report titled Ten Insights from FAAC Disbursements for January-September 2026.
The report showed that total deductions from Federation Account revenue fell by 3.5 per cent to N11.1tn during the nine-month period, from N11.5tn a year earlier. However, the composition of the deductions changed significantly, with savings and interventions rising to a combined N8.34tn.
Interventions accounted for N4.78tn, while savings stood at N3.56tn. Together, they represented 75.1 per cent of total deductions, compared with 39.9 per cent in the same period of 2025.
Refunds dropped from N5.2tn to N1.21tn, a decline of 77 per cent. Collection costs rose by four per cent to N1.09tn, while transfers fell by 29 per cent to N469.06bn.
Despite the deductions, gross Federation Account revenue increased by 12.6 per cent to N31.46tn from N27.95tn. Distributable revenue before augmentation rose by 23.8 per cent to N20.36tn, as the reduction in total deductions helped make more revenue available for distribution.
The figures come as the Federal Government faces a substantial budget financing gap. Its 2026 budget projects expenditure of N68.32tn against expected revenue of N36.87tn, leaving a deficit of N31.46tn.
The government increased its borrowing target by N11.31tn, from N17.89tn to N29.2tn.
The savings figures cover the Federation Account and are not funds retained solely by the Federal Government. Revenue from the account is distributed among the federal, state and local governments under existing allocation arrangements.
The contrast between rising savings and increased borrowing highlights the different demands on public finances, including the need to finance budgeted expenditure while setting aside funds through Federation Account deductions.
The Federal Government has defended its borrowing strategy as necessary to meet spending pressures and fund infrastructure and other development priorities. It has also cited personnel costs, debt servicing, electricity support and infrastructure commitments as demands on public revenue.
The Presidency has argued that borrowing is being directed towards productive assets, while acknowledging that debt servicing accounted for about 65 per cent of revenue in the first half of 2026.
