The Federal Government, states, and local governments shared a historic ₦6 trillion from the Federation Account Allocation Committee (FAAC) in the third quarter of 2025, marking the highest quarterly disbursement on record.
Okay News reports that the Nigeria Extractive Industries Transparency Initiative (NEITI) disclosed this in its analysis of the Q3 allocation released on Tuesday in Abuja.
A breakdown shows the federal government received ₦2.19 trillion, states ₦1.97 trillion, and local governments ₦1.45 trillion.
NEITI Director of Communication & Stakeholders Management Obiageli Onuorah described the allocation as a significant rise in federation account receipts and distributions, more than doubling over two years.
The report noted that year-on-year quarterly FAAC allocations in 2025 grew by 55.6 per cent compared with Q3 2024.
Statutory revenues accounted for 62 per cent of shared receipts, Value Added Tax (VAT) 34 per cent, while Electronic Money Transfer Levy (EMTL) and augmentation from non-oil excess revenue each contributed 2 per cent.
Allocations to the 36 states included revenues from statutory sources, VAT, EMTL, and ecological funds, with an additional ₦100 billion augmentation from the non-oil excess revenue account.
Lagos State recorded the highest allocation at ₦179.3 billion for the quarter, averaging ₦59.76 billion monthly. Kano followed with ₦79.2 billion, and Rivers with ₦78.8 billion.
Nasarawa State received the lowest at ₦42.5 billion, followed by Ebonyi (₦42.9 billion) and Ekiti (₦43 billion), with an average monthly allocation of ₦14.1 billion to Nasarawa.
The gap between the highest and lowest state allocations stood at ₦136.8 billion.
Nine oil-producing states received ₦424 billion as 13 per cent derivation revenue, significantly altering state rankings.
Delta State led among derivative states with ₦180.68 billion, followed by Akwa Ibom, Bayelsa, and Rivers.
Deductions from states’ allocations for debt servicing and other obligations totalled ₦225.89 billion, a 6.5 per cent decline from the previous quarter.
The average debt service ratio across states was 9.4 per cent, ranging from 1.5 per cent to 26.8 per cent, with Ogun (26.8 per cent), Lagos (26.5 per cent), and Cross River topping the list.
NEITI Executive Secretary Dr Ogbonnaya Orji welcomed the strong remittance performance and reduced debt burden but cautioned about volatility in oil markets and optimistic budget benchmarks that may pose risks to fiscal sustainability.
NEITI recommended publishing up-to-date balances and liabilities for key federation accounts, including the non-oil Excess Account, Domestic Excess Crude Account, Stabilisation Fund, Ecology Fund, and mineral resource-linked accounts.
It called for clear notes explaining FAAC transactions, refunds, net-offs, and priority project entries to enhance transparency.
The agency urged consistent application of Appropriation Act benchmarks, greater use of the Stabilisation Account for monthly smoothing, and transfers of exchange gains to stabilisation buffers.
NEITI advised accelerating revenue diversification through mining sector reforms, modernising the Mineral and Mining Act, advancing downstream petroleum reforms, and fully implementing the Petroleum Industry Act (PIA) to expand domestic refining and value addition.
The Q3 2025 results, while encouraging, highlight the need for disciplined management of windfalls to protect gains and reduce vulnerability to commodity shocks.
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