The Federal Government and other tiers of government set aside a combined ₦3.56tn as savings from Federation Account revenue between January and September 2026.
This came even as the Federal Government increasingly relied on borrowing to finance its budget deficit.
The amount is a 95 per cent increase from the ₦1.83tn recorded in the corresponding period of 2025. It raises questions about the country’s fiscal priorities amid mounting public debt and rising debt-servicing obligations.
A report by Agora Policy, titled Ten Insights from FAAC Disbursements for January-September 2026, was analysed by The PUNCH on Friday. It showed that savings and interventions accounted for ₦8.34tn of deductions from Federation Account revenue during the nine-month period.
The report put deductions for interventions at ₦4.78tn, making it the largest category, while savings stood at ₦3.56tn. Together, the two categories represented 75.1 per cent of total deductions, compared with 39.9 per cent in the corresponding period of 2025.
The report read, “Interventions accounted for the largest deduction, at ₦4.78tn, followed by savings at ₦3.56tn. In nine months, refunds amounted to ₦1.21tn and collection costs to ₦1.09tn. Transfers, at ₦469.06bn, were the smallest category.”
The sharp rise in savings came against the backdrop of the Federal Government’s expanded borrowing plan for 2026. The government raised its borrowing target by ₦11.31tn to ₦29.20tn, from the earlier projection of ₦17.89tn, while the budget deficit stood at ₦31.46tn.
Under the 2026 budget, total expenditure is projected at ₦68.32tn against expected revenue of ₦36.87tn. This leaves a substantial financing gap to be covered largely through borrowing.
The Agora report, however, showed that total deductions from Federation Account revenue fell slightly by 3.5 per cent, from ₦11.50tn in the first nine months of 2025 to ₦11.10tn in the same period of 2026.
The share of deductions in gross revenue also dropped from 41.1 per cent to 35.3 per cent. This allowed distributable revenue before augmentation to rise by 23.8 per cent to ₦20.36tn.
Gross Federation Account revenue grew by 12.6 per cent during the period, from ₦27.95tn to ₦31.46tn.
According to the report, the ₦3.91tn increase in distributable revenue exceeded the ₦3.51tn growth in gross receipts because deductions declined by about ₦400bn.
It stated, “The modest fall in total deductions conceals a substantial change in their composition. Refunds fell by approximately ₦3.99tn, moving from the largest deduction category to the third-largest.
“Meanwhile, interventions and savings increased by approximately ₦3.75tn, from ₦4.59tn to ₦8.34tn. Together, interventions and savings accounted for 75.1 per cent of deductions in nine months in 2026, compared with 39.9 per cent in the corresponding period in 2025.”
A further breakdown showed that refunds declined by 77 per cent, from ₦5.20tn in the first nine months of 2025 to ₦1.21tn in 2026.
Collection costs rose by four per cent to ₦1.09tn, while transfers fell by 29 per cent to ₦469.06bn.
The increase in savings and interventions raises questions about the relationship between the resources set aside from Federation Account revenue and the government’s continued borrowing to fund expenditure.
However, the deductions cover the Federation Account and should not be read as savings retained solely by the Federal Government. The revenue is shared among the Federal Government, states and local governments under the existing allocation arrangements.
The Federal Government has defended its borrowing strategy. It argues that expenditure pressures have outpaced additional non-borrowed resources and that borrowing is necessary to finance infrastructure and other development priorities.
In its fiscal defence, the government has also pointed to rising personnel costs, debt-service obligations, electricity support and infrastructure commitments as major pressures on public finances.
A statement by the Presidency on its infrastructure investment strategy said borrowing was being redirected towards productive assets rather than short-term consumption.
The statement also acknowledged the pressure of debt service, which stood at about 65 per cent of revenue in the first half of 2026.
