Zamfara, the lowest contributor, received over 5× its input, while Kano, the highest contributor, had the lowest relative gain

Key Takeaways

  • The North-West region received ₦66.55 billion, more than double its remittance (₦28.31B), showing a heavy reliance on federal VAT sharing.
  • Zamfara, the lowest contributor (₦1.45B), received the highest percentage gain (+433%), getting ₦7.72B, while Kano, the highest contributor (₦9.59B), had the smallest relative gain (+41.5%).
  • Kaduna and Katsina, despite remitting ₦3.50B and ₦3.86B, received ₦10.18B and ₦10.01B, respectively, nearly tripling their remittance.
  • Kano remitted 34% of the zone’s VAT but received only 20.4% of the total allocation, reinforcing that VAT is distributed based on equality and not economic strength.

The VAT distribution in the North-West geopolitical zone of Nigeria highlights a major fiscal imbalance, where states receive far more than they remitted. The region generated ₦28.31 billion in VAT but received ₦66.55 billion, a 135% increase, showing a system where VAT is redistributed to ensure financial balance across states.

Kano, the economic powerhouse of the region, remitted ₦9.59 billion, accounting for 34% of the zone’s total VAT. Yet, it received only ₦13.57 billion, a 41.5% increase. This is the lowest percentage gain in the region, despite Kano being the highest revenue-generating state. In contrast, Zamfara, the lowest contributor at ₦1.45 billion, received ₦7.72 billion, an astonishing 5.3× its remittance (+433%), the highest relative gain in the zone.

Similarly, Kaduna (₦3.50B → ₦10.18B) and Katsina (₦3.86B → ₦10.01B) nearly tripled their VAT remittance in allocation, further emphasising the redistribution formula. The entire region received ₦2.35 for every ₦1 it contributed, confirming that VAT sharing favours equalisation over economic output.

Source:

Federal account allocation committee (FAAC)

Period:

January 2025
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