The Federal Government and other tiers of government have set aside N3.56tn in savings from Federation Account revenue between January and September 2026, despite the country’s increasing reliance on borrowing to finance its budget deficit.
The figure represents a 95 per cent increase compared with the N1.83tn recorded during the corresponding period in 2025.
According to a report by Agora Policy titled Ten Insights from FAAC Disbursements for January-September 2026, savings and interventions accounted for N8.34tn of deductions from Federation Account revenue within the nine-month period.
Interventions accounted for N4.78tn, while savings stood at N3.56tn. Together, the two categories represented 75.1 per cent of total deductions, compared with 39.9 per cent in the same period last year.
The development comes amid the Federal Government’s expanded borrowing plan for 2026, with its borrowing target increased by N11.31tn to N29.20tn from the earlier N17.89tn projection. The 2026 budget also carries a deficit of N31.46tn.
Under the budget, total expenditure is projected at N68.32tn, against expected revenue of N36.87tn, leaving a substantial financing gap.
The Agora Policy report further revealed that gross Federation Account revenue increased by 12.6 per cent, rising from N27.95tn in the first nine months of 2025 to N31.46tn in the corresponding period of 2026.
Despite the increase in savings and interventions, total deductions from the Federation Account declined by 3.5 per cent, from N11.50tn to N11.10tn, allowing distributable revenue before augmentation to rise by 23.8 per cent to N20.36tn.
The report also showed that refunds dropped by 77 per cent, from N5.20tn to N1.21tn, while collection costs increased by four per cent to N1.09tn.
The figures have raised questions about the relationship between government savings, interventions and continued borrowing to finance public expenditure.
However, the report clarified that the deductions cover the entire Federation Account and should not be interpreted as savings belonging exclusively to the Federal Government, as revenue is shared among the federal, state and local governments.
The Federal Government has defended its borrowing strategy, maintaining that rising expenditure obligations, infrastructure commitments and other development priorities have outpaced available non-borrowed revenue.
The Presidency has also argued that borrowing is being channelled towards productive infrastructure, while acknowledging the pressure of debt servicing, which reportedly accounted for about 65 per cent of revenue in the first half of 2026.
