FAAC disbursements hit N6tn in three months as national revenue jumps 56%

A new report by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed a sharp rise in national revenue, with a total of N6 trillion shared among the Federal, State and Local Governments within just three months.

The figure was disclosed in NEITI’s latest Quarterly Review of the Federation Account Allocation Committee (FAAC) Disbursements and represents a 55.6 per cent year-on-year increase compared with allocations for the same period in 2024.

According to the transparency watchdog, allocations in the third quarter (Q3) of 2025 have more than doubled over a two-year period, underscoring a major shift in Nigeria’s fiscal outlook and revenue performance.

A breakdown of the Q3 allocations shows a relatively balanced distribution across the three tiers of government. The Federal Government received N2.19 trillion, while State Governments collectively shared N1.97 trillion. Local Governments accounted for N1.45 trillion of the total disbursement.

NEITI noted that statutory revenue remained the dominant source of funds, contributing 62 per cent of the total allocation. Value Added Tax (VAT) followed closely, accounting for 34 per cent, while other revenue streams included the Electronic Money Transfer Levy (EMTL) and non-oil excess revenue augmentations.

At the state level, Lagos State retained its position as the highest recipient of FAAC allocations, receiving N179.3 billion during the quarter—an average of nearly N60 billion per month. Kano State followed with N79.2 billion, while Rivers State received N78.8 billion.

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On the lower end of the scale, Nasarawa State recorded N42.5 billion, Ebonyi received N42.9 billion, and Ekiti State got N43 billion, making them the least recipients in the period under review.

However, the introduction of the 13 per cent derivation fund significantly altered the overall rankings for oil-producing states. NEITI disclosed that nine oil-producing states shared N424 billion from derivation revenue alone during the quarter.

When derivation receipts were added to statutory allocations, Delta State emerged as the highest overall beneficiary with N180.68 billion, followed by Akwa Ibom, Bayelsa and Rivers states.

Despite the surge in revenue, NEITI noted that debt servicing continues to weigh heavily on state finances. A total of N225.89 billion was deducted from state allocations during the quarter to meet various debt obligations.

Ogun State recorded the highest debt service ratio at 26.8 per cent, closely followed by Lagos State at 26.5 per cent, highlighting the persistent pressure of debt repayment on subnational governments.