Federation Account savings reached ₦3.56 trillion between January and September 2026, marking a 95 per cent increase from the amount recorded during the same period last year, even as the Federal Government continues to expand its borrowing plans to finance public expenditure.
The figure comes from a report by Agora Policy titled Ten Insights from FAAC Disbursements for January-September 2026. The report examined revenue generation, deductions and allocations from the Federation Account during the first nine months of the year.
According to the findings, the three tiers of government saved ₦3.56 trillion, compared with ₦1.83 trillion recorded between January and September 2025. The increase highlights a significant change in how Federation Account revenue was distributed and managed during the period.
The development also comes amid concerns about Nigeria’s rising public debt, budget deficit and increasing cost of government borrowing.
Federation Account Savings Increase as Revenue Grows
Agora Policy reported that gross revenue generated through the Federation Account increased by 12.6 per cent during the period, rising from ₦27.95 trillion in the first nine months of 2025 to ₦31.46 trillion in 2026.
At the same time, total deductions from the account declined by 3.5 per cent, falling from ₦11.50 trillion to ₦11.10 trillion. This allowed a larger share of the revenue to remain available for distribution among the three tiers of government.
The report identified interventions as the largest deduction category, accounting for ₦4.78 trillion, while Federation Account savings stood at ₦3.56 trillion. Other deductions included ₦1.21 trillion in refunds, ₦1.09 trillion in revenue collection costs and ₦469.06 billion in transfers.
Together, savings and interventions accounted for 75.1 per cent of total deductions during the nine-month period. This represented a considerable increase from 39.9 per cent recorded during the corresponding period in 2025.
The report also showed that distributable revenue before augmentation increased by 23.8 per cent to ₦20.36 trillion, compared with the previous year’s figure.
However, the ₦3.56 trillion should not be mistaken for savings belonging exclusively to the Federal Government. The amount covers funds set aside from Federation Account revenue involving the federal, state and local governments.
Federal Government Increases Borrowing Target to ₦29.20 Trillion
Despite the increase in Federation Account savings, the Federal Government has continued to depend on borrowing to meet its financial obligations and fund major projects.
The government’s borrowing target for 2026 increased by ₦11.31 trillion, moving from the earlier projection of ₦17.89 trillion to ₦29.20 trillion.
The 2026 national budget provides for total expenditure of ₦68.32 trillion against projected revenue of ₦36.87 trillion, leaving a budget deficit of ₦31.46 trillion. Borrowing remains a major part of the government’s plan to finance this gap.
Debt servicing also continues to place pressure on public finances, as a substantial portion of government revenue goes towards meeting existing loan obligations.
The Presidency has defended the borrowing strategy, pointing to rising personnel costs, electricity support, infrastructure commitments and other expenditure pressures. It has also argued that borrowing supports investments in productive assets and long-term development.
Meanwhile, the increase in savings raises questions about how governments can balance setting aside funds with the need to finance public services and development projects.
The Agora Policy findings provide a closer look at Nigeria’s revenue management during the first nine months of 2026. They also highlight the contrast between increased Federation Account savings and the Federal Government’s growing borrowing requirements.
As Nigeria continues to manage its budget deficit and debt obligations, the effective use of available revenue will remain important to the country’s public finances.
