Lagos leads by a wide margin while smaller states also record steady gains amid sustained economic activity…..
Revenue flowing to Nigerian states from Value Added Tax (VAT) continued its upward climb in February 2026, with total disbursement jumping sharply to N551.77 billion, signaling sustained fiscal momentum at the subnational level.
According to data compiled from the Office of the Accountant General of the Federation, the latest figures represent a 30.36 percent increase from the N423.25 billion shared in January. Net disbursement followed a similar trajectory, rising 31.41 percent to N541.89 billion.
The latest uptick suggests that the strong rebound recorded at the start of the year was not a one-off event, but part of a broader trend driven by improving tax collection and steady economic activity.
Lagos Dominates as Top States Pull Ahead
Lagos State once again stood far ahead of the pack, receiving N111.22 billion in gross VAT allocation, an 82 percent jump from January’s figure. After deductions, the state retained N101.34 billion, underlining its position as Nigeria’s economic powerhouse and largest VAT contributor.
Oyo State moved into second place with N24.04 billion, recording a strong 52 percent increase, while Rivers State followed closely with N23.57 billion.
Kano State posted a more modest rise to N17.37 billion, while the Federal Capital Territory made a notable return to the top five with N15.76 billion.
Bayelsa State also stood out, recording one of the fastest growth rates among leading states, with allocations rising by over 60 percent to N15.07 billion.
Broad Gains Across the Board
Beyond the top performers, mid-tier states such as Katsina State, Jigawa State, Delta State, and Kaduna State also posted increases, with allocations ranging between N12.73 billion and N13.82 billion.
Growth in this category was more moderate, suggesting that January’s surge had already raised the baseline for subsequent distributions.
At the lower end, states continued to benefit from incremental increases. Taraba State, Ebonyi State, Yobe State, Nasarawa State, and Ekiti State all recorded allocations in the N9 billion range, with steady growth rates.
Other states including Cross River State, Abia State, Gombe State, Kogi State, and Plateau State also saw gains, reinforcing the nationwide spread of the revenue increase.
Momentum Builds After January Rebound
The February performance builds on January’s remarkable surge, when VAT allocations jumped by 74 percent following a dip in December 2025. That earlier rebound appears to have set a stronger foundation, with February’s figures confirming continued resilience in government revenue streams.
Notably, Lagos remained the only state with deductions in both months, reflecting its unique position within Nigeria’s VAT structure.
What It Means
The sustained rise in VAT disbursements points to improving fiscal flows for state governments at a time when many are seeking to boost spending on infrastructure and public services.
While top economic hubs continue to dominate allocations, the consistent gains across smaller states suggest a more balanced distribution of revenue growth, an encouraging sign for broader economic stability.
If the current trend holds, 2026 could mark a period of stronger financial footing for Nigeria’s states, driven by more efficient tax systems and a gradually stabilising economy.
